Business Law Ch 7

Bail

the amount of money defendants pay the court to release them from custody, as security that they will return for trial

Mistake of Fact

the defendant made an honest and reasonable mistake, that negates the guilty mind element of the crime (negates intent)- Ex- that a drug fact is public knowledge and not insider info • Mistake must be reasonable; may be hard to prove Mistake of law is NOT a general defence

Robbery

the forceful and unlawful taking of personal property • Must have the element of fear, or else it's just theft

False Pretenses

the illegal obtaining of property belonging to another through materially false representations of an existing fact, with knowledge of their falsity and intent to defraud.

Arson

the intentional burning of another's dwelling • The definition is expanded to include other real property besides homes

Bribery

the offering, giving, soliciting, or receiving of money or any object of value for the purpose of influencing the judgment or conduct of a person in a position of trust.

Larceny

the secretive and wrongful taking and carrying away of the personal property of another with the intent to permanently deprive the rightful owner of its use or possession.

Elements of Bribery of a public official

Government must show • 1. Something of value was offered, given or promised to • 2. A federal public official with (members of congress, government officers and employees, anyone acting on behalf of the federal government, private employees carrying out a federal government function) • 3. The intent to influence that persons judgement or conduct

Petit Jury

If the defendant pleads not guilty, the case will be heard by a petit jury- a fact finding jury

M'Naghten test

"right/wrong test"- defendant is not guilty if they did not understand the nature of the Act

Sentencing hearing

(if defendant is found guilty) • Judges use sentencing guidelines, that provide a range, or (sometimes mandatory sentences) • Judges usually may consider a number of factors when sentencing • State and federal sentencing guidelines may be similar or very different

Nolo contendere

(no contest)- not admitting guilt but agreeing not to contest the charges; the advantage is that this plea cannot be used against you in a civil trial

Fourth Amendment

- 2 important safeguards: o 1. Protects citizens from unreasonable searches and seizures (must have a warrant or sufficient probable cause) o 2. It also places restrictions on how warrants may be obtained and used • They must be specific about who is to be arrested, what is being sought, and in which locations

Plea Bargain

- an agreement in which the prosecutor agrees to reduce charges, drop charges, or recommend a certain sentence if the defendant pleads guilty • This can happen at any time in the process • Often white collar/business people plea out to avoid publicity and a risk of a severe sentence.

Indictment/Information

A formal written accusation stating the facts and specifying the violation of the criminal law. • Once a prosecutor chooses to proceed with the case, they must demonstrate that the defendants actions and intent meet the elements of the crime by charging them with an indictment or information • Felony- must get an indictment from a grand jury (Constitutional right)- they must show evidence adequate to justify bringing the defendant to trial • Grand jury does not determine guilt, just considers evidence and determines if there is enough to try.

RICO

1970 Act- responds to racketeering or organized crime o Its effect is to prevent legitimate businesses from serving as covers for organized crime o Remedy is treble (triple) damages and attorney fees in a civil action o Includes many charges such as violence, fraud, bribery, and securities fraud- very effective tool in fighting white collar crime o May be held civilly or criminally liable under RICO

Fifth Amendment

3 main protections: o 1. Prohibits double jeopardy- a person cannot be tried for the same offense twice, after being found not- guilty, Only applies to criminal offences; a person can still face civil charges - EX: OJ case, 2. Provides a right against self-incrimination, - by "pleading the 5th" a person invokes their right not to testify against yourself, Only applies to persons, not corporations (but may apply to sole proprietors), Applies to criminal defendants o 3. Ensures a right to due process- ensures that a defendant may not be stricken of "life, liberty, or property" without first going through the appropriate legal actions (Ex: trial or plea bargaining), This right does apply to corporations

M'Naghten test, Irresistible-impulse test, Model Penal Code Test

3 tests of insanity

Criminal Procedure

A prosecutor bring the case on behalf of the government (vs. civil case where another party brings the case)

Felonies, Misdemeanors, Petty offenses

Classification of Crimes

Bribery, Extortion, Fraud

Common white-collar crimes

Liability of Corporate Officers

Corporate officers and managers can be held liable for crimes committed on behalf of the corporation.

Knowingly

D can commit a wrongful act, if the person knows its wrongful

Health Care Fraud

Department of Justice recently named it a top priority after violent crime • Ex- submitting false claims to Medicare or Medicaid • Or prescribing unneeded equipment to patients for kickbacks from the manufacturers

Telemarketing Fraud

Elderly are prime targets for these schemes. • Cramming - scheme in which companies bill consumers for optional services they did not order • Slamming- where consumers are tricked into changing their phone service to another carrier

Irresistible-impulse test

Even if the person knew right from wrong, so long as some "irresistible impulse" resulting from mental deficiency drove the person to commit the crime

Jury deliberations

Jury will deliberate to reach a verdict

Computer Crimes

Not a type of crime, but a new way of committing traditional crimes; refers broadly to any wrongful act that • 1. Is directed against computers • 2. Uses computers to commit the crime- online scams • 3. Or involves computers

Regulatory Statutes

One example is selling alcohol or cigarettes to a minor. o Mens Rea doesn't matter- liability will still be assessed

Arrest, Probable Cause, Miranda Rights, Booking, First appearance, Should case be prosecuted, Indictment/Information, Arraignment,

Pre-trial procedure includes:

Should case be prosecuted

Prosecutor must decide • 1.Whether evidence is sufficient to gain a conviction • 2. Whether prosecuting the case serves a federal interest

Eighth Amendment

Protects from: o 1. Ensures freedom from excessive bail o 2. Excessive fines o 3. Cruel and unusual punishment.

Insider Trading

Securities Fraud- generally is the buying and selling of a security, in a breach of fiduciary duty or other relationship of trust or confidence, while in possession of material, non-public information about the security.

Strict Liability

Some crimes are strict liability crimes, which means liability without fault, regardless of care taken

Embezzlement

The wrongful conversion of another's property by one lawfully in possession of it • Ex- lawyers takes money from a client escrow account • Different from larceny, the _____________ doesn't take the property from another, they are in rightful possession of it.

RICO, False Claims Act, The Sarbanes-Oxley Act

Tool for Fighting Business Crime- 3 Federal Crime fighting laws enacted to combat white collar crime

Bench Trial, Jury selection, Trial, Jury deliberations, Jury verdict, Sentencing hearing

Trial Procedure includes:

Property crimes

______________ against business include: these crimes can occur in a personal context as well, usually committed by non-employees, against the business, may also provoke violence: Robbery, Burglary, Larceny, Arson

Purpose

____________of criminal law is to punish an offender for causing harm to public health, safety and morals

Commercial Bribery

a bribe in exchange for information or payoffs (ex- payoff, in order to obtain a contract for goods or services, or to gain information for a market advantage)

Responsible Corporate Officer Doctrine

a court may assess criminal liability even on a corporate executive or officer that did not engage in, direct, or know about a specific criminal violation. • Rational- it is a failure to meet their responsibility

double jeopardy

a person cannot be tried for the same offense twice, after being found not- guilty • Only applies to criminal offences; a person can still face civil charges - EX: OJ case

Hacker

a person who illegally accesses a computer system to obtain information or steal money

First appearance

after the prosecutor files the complaint, the defendant makes a first appearance before a magistrate, who determine whether there was probable cause for the arrest • If no probable case the person is freed; if there is probable cause, bail is set, lawyer may be appointed too at this time

False Claims Act

allows employees to sue employers on behalf of the federal government for fraud against the government. o Ex- employee at a health care facility that sees the employer submitting false claims to Medicare, can bring suit for fraud against the employer

Miranda Rights

an officer must inform the individual they arrest of their ________________- applies once the person is in custody - "not free to leave" • Failure to give ________ rights, will make information from the defendants inadmissible at trial • ______ does not have to be word for word (Powell case)- they just must cover all the rights afforded to the defendant

Misdemeanors

are less serious crimes punishable by fines or imprisonment for less than one year.

Petty offenses

are minor misdemeanors punishable by small fines or short jail sentences (such a violating a building code)

Felonies

are serious crimes punishable by imprisonment for more than one year or death- such as murder

Actus rues, mens rea

basic elements of a crime

self-incrimination

by "pleading the 5th" a person invokes their right not to testify against yourself • Only applies to persons, not corporations (but may apply to sole proprietors) • Applies to criminal defendants

Model Penal Code Test

conduct is a result of mental disease or defect; lack the capacity to appreciate the wrongfulness of the conduct, or to conform his conduct to the requirements of the law. • Andrea Yates Case- killed her 5 children, insanity was a successful defense at the second trial

Jury selection

constitutional right to a jury • If the crime is punishable by 6 months or more jail/prison

Vicarious Liability

courts can hold employers liable for the wrongful acts of their employees if the employer directed, partook in, or authorized the wrongful act.

Arrest

criminal proceeding usually begin when the individual is arrested (by any police, FBI etc.)

Sixth Amendment

crucial elements to ensure fair proceedings in a criminal trial- 6 Protections: o 1. The right to a speedy and public trial o 2. The right to a trial by an impartial jury of peers o 3. The right to be informed of accusations against you o 4. The right to confront witnesses o 5. The right to have witnesses on your side o 6. The right to have counsel during various stages of legal proceedings

Negligent

if an individual does not meet the standard of care a reasonable person would use under the circumstances

Criminal Laws

define criminal behavior and set guidelines for punishment

Justifiable use of force

e.g., self-defense used to protect your own life • Can also apply to defense of your dwelling, defense of others, and to prevent crime. • Force used must be REASONABLE- no overkill • Deadly for cannot be used to protect property; deadly force must be used only in response to the threat of deadly force against you

Fraud

encompasses a variety of means by which an individual intentionally uses some sort of misrepresentation to gain advantage over another person.

Purposely

engaging in a specific wrongful behavior to bring about a specific wrongful result

due process

ensures that a defendant may not be stricken of "life, liberty, or property" without first going through the appropriate legal actions (Ex: trial or plea bargaining) • This right does apply to corporations

Affirmative Defenses

excuses for unlawful behavior

Punishment for white collar crimes

include: • Fines, Incarceration- Bernie Madoff 150 years, Mandated Community service, House arrest, Prohibition from the same occupation where the crime occurred- loss of a license

White-collar crimes

include: Usually committed by employees, in a business context, committed against society, not usually violent • Consequences of _________________ are costly and wide spread-Bernie Madoff Video

Infancy

individuals who have not reached the age of majority/adulthood • May be able to partially defuse the guilty-mind (mens rea) requirement of a crime • In some cases, a minor may be tried as an adult, determined by a judge

Intoxication

involuntarily (forced) ingesting an intoxicating substance can be used as a defense • If the intoxicated person was unable to understand that the act committed was wrong • Doesn't apply if you knowingly became intoxicated

Cyber Terrorist

is a hacker who intends to exploit a target computer or network to create a serious impact

Probable Cause

is necessary in order to obtain an arrest warrant • Probable cause is the likelihood that a suspect committed or is planning to commit a crime. • Magistrate- lowest judicial ranking, will issue search and arrest warrants • Law enforcement may arrest in cases without a warrant where ________ exists, and there is not time to obtain a warrant

Exclusionary Rule

is not stated in any one amendment o Prevents prosecutors from using evidence obtained in violation of the Constitution • Good Faith Exception: evidence found when an official acts in good faith will be admissible (Ex: officer acts on a search warrant with a mistake in it- but in good faith believes it is correct and valid) • Inevitability Exception- illegally obtained evidence may be used at trial if it would have been obtained "inevitably" by law enforcement officials by lawful means.

Forgery

is the fraudulent making or altering of any writing in a way that changes the legal rights and liabilities of another. • Ex- signing someone else's check

Actus reus

means wrongful behavior/guilty act. • Government must prove the non-mental elements of the crime and show that the prohibited act or consequence resulted because of defendants actions

Mens rea

means wrongful state of mind/intent/guilty mind. • The government must prove that the defendant acted with purpose, knowledge, recklessness or negligence, depending on which of these states of mind is required by law defining the related offense.

Fourteenth Amendment

o 1. Extends the right of due process to all state matters, and o 2. Extends most constitutional rights to defendants at the state level.

Stock- Option Back Dating

occurs when an employee falsifies documents to make it appear as if the company had granted options on certain dates

Burglary

occurs when someone unlawfully enters a building with the intent to commit a felony • Occurs without consent to enter, with the intent to commit a wrongful act

Reckless

occurs when the individual consciously ignores a substantial risk

Booking

once a person is arrested, their name and alleged crimes are recorded in the investigating agency, or police department's records

The Sarbanes-Oxley Act

passed in 2002 in response to several business scandals, such as Enron, World Com etc. o Encourages accountability and transparency with new rules for Accounting firms o Increases punishments for several white collar crimes o Extended the Statute of Limitations regarding the discovery of fraud from 2 years from the date of discovery and 5 years from the actual criminal act

Trial

prosecution has the burden of proof • The prosecutor must persuade the jury of guilt beyond a reasonable doubt • Higher in criminal cases (civil is preponderance of the evidence)

Duress

relevant when a person is threatened with: 3 elements • 1. Serious bodily harm or loss of life • 2. The threat of harm must be more serious than the harm the crime caused, and • 3. The threat of harm must be immediate and inescapable.

Insanity

relevant when a person's mental condition at the time a crime was committed was so impaired that the person could not • 1. Understand the wrongful nature of the specific act, • 2. Or could not distinguish between right and wrong o Depends a lot on expert testimony

Entrapment

relevant when the idea for the crime originated with a government official who suggested it to the defendant; who would not have otherwise committed the crime • Purpose is to prevent law enforcement from instigating crimes; especially with white collar crime

Mail Fraud

the use of the mail to defraud the public • Federal Crime Under the Mail Fraud Act 1990- includes carriers FedEx and UPS • Elements: Government must prove 2 things o 1. An intent to defraud o 2. The use of or causing the use of _________ to further the fraudulent scheme

Aggravated Robbery

usually involves a weapon, carries a more severe penalty

Arraignment

when the defendant appears in court to answer an indictment

Bankruptcy Fraud

where a debtor may hide assets so that they won't be considered during the proceedings • Or a creditor may file a false claim against a debtor

Bench Trial

where a defendant waives a jury trial and the judge is the trier of fact

Necessity

—"relevant when the harm or evil sought to be avoided is greater than sought to be prevented" • The crime was necessary to prevent a more sever crime from occurring • Ex- breaking into a store to prevent an arson

Extortion

—(blackmail)—the making of threats for the purpose of obtaining money or property. • Ex- David Letterman- CBS producer was attempting to ________ $2 million from Letterman to keep quiet about an affair with a younger staff member

Elements of Fraud

• 1. A material false representation made with the intent to deceive (scienter-knowingly) • 2. A victims reasonable reliance on the false representation • 3. Damages

Jury verdict

• Can reach a unanimous verdict • Or it can be a "hung jury"

Corporate Criminal Liability

• Corporations as legal entities can be held liable for crimes committed on behalf of the corporation Except those crimes that are punishable only by prison A corporation may be held criminally liable for the acts of its employees or agents if: 3 Elements • 1. The individual was acting within the scope of his or her employment • 2. The individual was acting with the purpose of benefiting the corporation • 3. The act was imputed to the corporation