legal environment of business chapter 6 parker

Corporate Criminal Liability

-a corporate entity can be held liable for crimes (can't go to jail but fines, loss of license, etc.) Corporation can be held liable for crimes committed by their agents and employees within the cause and scope of their employing -corporate directors and officers are personally liable for crimes they commit even if they did the act only to benefit the corporation -Further corporate directors and officers may be held liable for the actions of employees under their supervision -Responsible corporate officers doctrine-a court may impose criminal liability on a corporate officer regardless of whether he/she participated in directed or even knew about a given criminal violation

Classifications of Crimes

1. Felony- crime that carries the most severe sanctions which range from one year in a state or federal prison to the death penalty. Ex-arson, murder, rape, robbery 2. Misdemeanor-lesser crimes than felonies punishable by a fine or incarceration in jail for up to one year. Ex-disorderly conduct, DUI, trespass 3. Petty offense the least serious kind of criminal offense such as a traffic or building code violation

Violent Crimes

1. Robbery- the act of forcefully and unlawfully taking personal property of any value of another; force of intimidation is usually necessary for any theft to be considered a robbery(ex-pick pocketing is not robbery).

Constitutional Safeguards and Criminal Procedures

1.) 4th Amendment Protections: - protects the "right of the people to be secure in their persons, house, papers, and effects." a.) Search Warrant: an order granted by a public authority (generally a judge) that authorizes law enforcement personnel to search a particular premises or property. - Probable Cause- to obtain a search warrant, the officers must convince a judge that they have reasonable grounds, or probable cause, to believe a search will reveal a specific illegality. - no general warrants (there must be a particular description of the items to be searched/seized). - if looking for a motorcycle, can't look in drawers - there are exceptions to the requirement of a search warrant- ex. When it is likely that the items sought will be removed before a warrant can be obtained. b.) Searches and Seizures in the Business Context: - 4th Amendment protections are important due to the increased frequency of government inspections which can be very disruptive. - U.S. Supreme Court: Government inspectors cannot enter business premises without a warrant but the standard is different than in non business cases. - the existence of a general and neutral enforcement plan will justify the issuance of a warrant. - warrant required to get records of a business held by lawyers, accountants, etc. - no warrant required to seize spoiled or contaminated food. - employers have to concern themselves with a balance of maintaining a safe and efficient workplace without violating the 4th Amendment rights of employees. 2.) 5th Amendment Protections: a.) Due Process of Law- the law must be carried out in a fair and orderly way. D. must have the opportunity to object to the charges against them before a fair, neutral decision maker (judge); must be given the opportunity to confront and cross examine witnesses; and to present their own witnesses. b.) Double Jeopardy- a person cannot be tried twice for the same criminal offense. Once a D. is acquitted (found not guilty) of a crime, he/she cannot be re-indicted and tried again. However: - a civil suit can be brought (O.J.) - states prosecution will not prevent a separate Federal prosecution relating to the same activity (Rodney King- Cops civil rights violations.) c.) Self Incrimination: (The giving of testimony that may subject you to criminal prosecution.) - no person "shall be compelled in any criminal case to be a witness against himself". - this right does not extend to corporations or partnerships, or their business records even if the records incriminate the business owners. - right to not self incriminate does extend to sole proprietorships that have not incorporated. 3.) 6th Amendment Protections: a.) right to a speedy trial b.) right to a trial by jury c.) right to a public trial d.) right to confront witnesses e.) right to counsel 4.) 8th Amendment Protections: a.) excessive bails or fines b.) cruel and unusual punishment - Federal Law- you must report a transport of money more than $10,000. Ex. Guy boards a plane w/ $350,000 to pay a legitimate debt. U.S. Supreme Court- a punitive forfeiture violates the excessive fines clause if it is grossly disproportionate to the gravity of a D. offense. 5.) 2 other procedural protections for criminal D. a.) Exclusionary Rule- any evidence obtained in violation of the accused 4th, 5th, or 6th Amendment rights, as well as any evidence derived from illegally obtained evidence will not be admissible in court (fruit of the poisonous tree). * purpose is to deter police misconduct * b.) Miranda Rule- individuals who are arrested must be informed of certain 5th and 6th Amendment rights. - If a person waives his/her rights, the burden is on the state to show the waiver was knowingly, intelligently, and voluntarily given. - Today the Miranda rule has been weakened and there are circumstances in which juries are able to hear confessions even if not voluntary

3 aspects of the criminal process

1.) Arrest- before warrant can be issued, there must be probable cause that a person has committed a crime. - warrantless arrests- routine officer observes a crime, potential flight by a suspect 2.) Indictment or Information: Indictment by a grand jury; felonies prosecutors can indict a ham sandwich. Information in GA is the accusation for misdemeanors. Indictment is a charge by the grand jury that a person has committed a crime. Grand jury- group of a county's best citizens * 3.) Trial - burden of proof on state - beyond a reasonable doubt 4.) Sentencing guidelines - Federal grid - 3 strike laws- both take away discretion of a judge- social and economic background of a D.

Criminal Liability

2 Elements 1 performance of a prohibited act 2 a specified state of mind or intent on the person performing them -most often acts of commission (doing a prohibited act) but can also be acts of omission (not doing a required act- ex. Failure to file a tax return) -thoughts of committing a crime are not enough -person can be guilty of attempted crimes but generally only if he/she took substantial steps toward the criminal act -a wrongful mental state is as necessary as a wrongfully act in establishing criminal liability -does not always mean having the mental state to commit act done

Property Crimes

2. Burglary- unlawful entry or breaking into a building with the intent to commit a felony (in some states any crime) therein. 3. Larceny- the wrongful taking and carrying away of another person's personal property with the intent to permanently deprive the owner of the property. a. Pick pocketing is this b. No fear here like in robbery c. Taking company supplies and products home for personal use with authorization is larceny. d. What is "property"?-Computer programs may be property. e. Computer time may be larceny; taking another cell phone and using it. 4. Obtaining goods by false pretenses a. Ex. Paying for groceries with a check knowing account does not have the funds to cover the check. 5. Receiving stolen goods- only requirement is that recipient knows or should have known that the goods were stolen. a. Recipient does not need to know the true identity of the owner or the thief. 6. Arson- the willful and malicious burning of a building (and in some states personal property) owned by another. Further, every state has a statute that covers a person's building for the purpose of collecting insurance. 7. Forgery- the fraudulent making or altering of any writing in a way that changes the legal rights and liabilities of another a. Also includes changing trademarks, falsifying public records, counterfeiting and altering a legal document.

Organized Crime

operates illegitimately by, among other things, providing illegal goods and services. Types of Organized Crime: 1. Money Laundering - falsely reporting income that has been attained through criminal activity as income obtained through a legitimate business enterprise. Illegal profits from drugs, racketeering, prostitution, gambling, etc. Banks are required to report any money transaction of over ten thousand dollars (unless a series of transactions) 2. Criminal RICO Violations - gambling, arson, extortion, security fraud, mail fraud, wire fraud, welfare fraud, embezzlement, etc. RICO-Racketeer influenced and Corrupt Organization Act. -Passed in 1970's as part of the Organized Crime Control Act. -Under RICO, it is a Federal crime to: 1. Use income obtained from racketeering activity to purchase any interest in an enterprise. 2. To acquire or maintain an interest in an enterprise through racketeering activity. 3. To conduct or participate in the affairs of an enterprise through racketeering activity, or 4. To conspire to do any of the preceding activities. Civil Liability under RICO -Penalties are harsh. -Civil penalties can include the divestiture of a D's interest in a business (called forfeiture). -P's can recover treble damages (3 times their actual damages) plus attorney fees for violations of the RICO statue. -Broad language of RICO has allowed it to be applied to cases that have nothing to do with organized crime. -Business fraud cases have in some instances been held to constitute "racketeering activity." -P's like to sue under this statue because of the treble damage clause. -Very bad statue-ex-abortion protestors were held to have violated RICO

Immunity-

*(side bar)* 5th Amend.- No person can be compelled to be a witness against himself.** - In cases in which the state wishes to obtain information from a person accused of a crime, the state can grant immunity from prosecution or agree to prosecute for a less serious offense in exchange for the information.

Key Differences between Civil Law and Criminal Law

-Civil cases-preponderance of the evidence standard of proof-anything over half that would tip the (unreadable) in P's behavior -Criminal cases beyond a reasonable doubt standard-if there is any reasonable doubt that a criminal D did not commit the crime with which he/she has been charged the verdict must be not guilty

-Crime

a wrong against society proclaimed in a statute and if committed punishable by society through fines, removal from public office, imprisonment, and in a few cases death

DEFENSES TO CRIMINAL LIABILITY

1. Infancy - Infant means any person that has not reached the age of maturity. Children that commit crimes generally will be tried for delinquents in a juvenile court. However, in some states a child will be tried as an adult in a regular court if he or she is above a certain age (usually 14) and is guilty of a felony (such as rape or murder). Children do not have the necessary intent to be convicted of crimes... 2. Intoxication A. Involuntary Intoxication - occurs when a person either is physically forced to ingest an intoxicating substance or is unaware that a substance containing drugs or alcohol is ingested. This is a defense to a crime if its effect was to make a person incapable of understanding that the act committed was wrong. B. Voluntary Intoxication - Maybe a defense if the D. was extremely intoxicated when committing the wrong. Case 6.3 - US. Supreme Court - The rule allowing the jury to consider evidence of D. 's voluntary intoxication is not a fundamental right under the due process clause; therefore a state law disallowing this defense is valid. 3. Insanity - The right and wrong test - person shall not be found guilty if at the time of the act omission or negligence constituting the crime, the person did not have mental capability to distinguish between right and wrong in relation to such act, omission, or negligence. 4. Mistake: -Mistake of law-May be a defense only if the D. did not know he or she was breaking the law and the law was not published or reasonably known to the public or the D. relied on an official statement of the law that was erroneous . -Mistake of Fact - Operates as a defense if it negates the mental state necessary to commit the crime. One student mistakenly walks off with another's book bag. 5. Consent - Voluntary agreement to a proposition or an act of another 1. Issue - Does a law forbid an act against the victims will or forbid an act without regard to the victim's wishes. 2. Most often a defense in crimes against property. (IE. You gave it to me) 3. Consent might be a defense if the law forbids and act against the victims will or the consent cancels a harm that the law is designed to present. 6. Duress - Harms 1. Unlawful pressure brought to bear on a person causing the person to perform and act that he or she would not otherwise perform. For Duress to an offense: A. Threat must be of serious bodily harm or death B. Harm threatened must be greater than the harm caused by the crime. C. Threat must be immediate and inescapable. D. D. must have been involved in the situation through no fault of their own. 7. Justifiable use of Force - Self Defense 1. the privilege to protect one's self or property against injury by another 2. in general people can use the amount of non deadly force that seems necessary to protect themselves, their dwellings, or other property or to prevent the commission of a crime. 3. Deadly force can be used in self-defense if there is a reasonable belief that immanent death or great bodily harm will otherwise result, if the attacker is using unlawful force, and if the defender has not initiated or provoked the attack. 4. Deadly Force in defense of a dwelling is valid only if the unlawful entry Is violent and the person reasonably believes deadly force is necessary to prevent immanent death or great bodily harm. 8.) Entrapment: - a defense in which the D. was induced by a public official (usually an undercover agent or police officer) to commit a crime that he/she otherwise would not have committed. *- For entrapment to be a defense, both the suggestion and the inducement must come from the police officer or undercover agent. Key issue- was the D. predisposed to commit the crime or did the agent induce it? 9.) Statute of Limitations: - with some exceptions (murder), this applies to criminal as well as civil cases. - GA capital crimes other than murder (life imprisonment)- 7 yrs from crime - other felonies- 4 yrs. from commission of crime - misdemeanors- 2 yrs from commission of crime Exceptions: Statutory period will not run if: - if person runs - if accused person is unknown - certain crimes such as child molestation, etc. statute will start to run at the earlier of victim reaching the age of 16 or crime being reported to a law enforcement or government agency.

White Collar Crimes

nonviolent crime committed by individuals or corporations to obtain a personal or business advantage. Types: 1. Embezzlement- the fraudulent appropriation of funds or other property by a person to whom the funds or property has been entrusted. -Generally, an employees that steals funds; not larceny because nothing is "physically" taken from another; not robbery because no force or fear is used. --not a defense if you "intend to return the money". Case 6.2- U.S. vs. Faulkner -truck driver on route to deliver a company's refrigerators to San Diego stopped to try and sell them himself in Las Vegas. Arrested and charged with embezzlement of an interstate shipment. He never sold any and none ever left the truck. Count: If a person has possession and control over the goods of another and has the intent of converting the goods to his/her own use, and then embezzlement occurs. Public Order Crime- Crimes contrary to public values and morals (today-public drunkenness, prostitution, gambling, illegal drug use) -viewed as crimes because these crimes lead to an environment...(The rest ran off the page.) 2. Mail and Wire Fraud- it is a federal crime to use the mail system to defraud the public. Criminal elements are: a. Mailing or causing someone else to mail a writing (anything written, printed, or photo copied) for the purpose of executing a scheme to defraud b. A contemplated or an organized scheme to defraud by false pretense c. Can also defraud by any means of mass communication i.e. Radio, tv 3. Computer crime- any act that is: A. Directed against computers or computer parts B. Uses computers as instruments of crime C. Involves computers and constitutes abuse: financial crimes done through use of computers; theft of computer equipment; theft of goods with aid of computers (manipulating inventory records); computer viruses; software piracy D. Other computer crime: 1. Identity theft - when a person steals another identifying information and uses it to gain access to the victim's financial records. 2. Cyber stalking - harassing a person and putting that person in reasonable fear for his or her safety or close family safety. 3. Hacking - using a computer to break into another computer. 4. Cyber Terrorism - a hacker who targets a computer for a serious impact such as impairing a businesses ability to conduct operations. 4. Bribery 1. Bribery of public officials - any attempt to influence a public official to act in a way that serves a private interest is a crime. Intent must be present and proved; bribe can be anything the recipient considers valuable; the crime occurs when the bribe is offered. 2. Commercial Bribery - generally people make commercial bribes to obtain information of another business. (Inside info); cover up an inferior product or secure new businesses. Kickbacks or payments to employee of a competing firm for insider info is an example. 3. Bribery of foreign officials - it is illegal for American business persons to use bribery in the securing of foreign contracts. This goes on all the time, has to in international business world. (You can bribe low but you can not bribe high). 5. Bankruptcy Fraud - Creditor may file a false claim against a debtor; debtor may fraudulently transfer assets to favored creditors or favored parties (family members for ex.) 6. Theft of Trade secrets - We discussed this in CH. 5 7. Insider Trading - The purchase or sale of securities on the bases of inside information (information that has not been made to the public) One that posses inside information and has a duty not to disclose it to outsiders may not profit from the purchase or sell of securities based on that information until it is available to the public. -White collar crime takes place within the confines of the legitimate business world.