Business Law Essays

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David P. Twomey – Boston College

Marianne M. Jennings – Arizona State University

Stephanie Greene – Boston College

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Twomey - Jennings, Anderson’s Business Law and the Legal Environment, 22nd Ed.

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

Chapter 7

Crimes

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

LEARNING OUTCOMES

Discuss the nature and classification of crimes

Describe the basis of criminal liability

Identify who is responsible for criminal acts

Explain the penalties for crimes and the sentencing for corporate crimes

List examples of white-collar crimes and their elements

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

LEARNING OUTCOMES

Describe the common law crimes

Discuss crimes related to computers

Describe the rights of businesses charged with crimes and the constitutional protections afforded them

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-1 General Principles

7-1a Nature and Classification of Crimes

A crime is conduct that is prohibited and punished by a government.

Classified as common law or statutory

Misdemeanors are punishable by less than one year in prison.

Felonies are punishable by more than one year in prison.

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-1 General Principles

7-1b Basis of Criminal Liability

Mental State

Act or Omission (actus reus)

7-1c Responsibility for Criminal Acts

Corporate liability: Corporations are held liable for the acts of their employees.

Officers and Agents of Corporations: Can be liable for employees’ conduct if they knew and failed to act.

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-1 General Principles

7-1c Responsibility for Criminal Acts, Continued

Federal Laws Targeting Officer and Director Criminal Responsibility: Penalties and jail terms have increased, but there must be proof of fraud.

Penalty for Crime: Forfeiture

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-1 General Principles

7-1c Responsibility for Criminal Acts, Continued

Penalties for Business/White-Collar Crimes

Computing New Penalties for Corporations

Corporate Integrity Agreements

Federal Sentencing Guidelines

Officer and Executive Banishment from Business Fields

Mandatory Sentences for Officers of Corporations Who Mastermind Crimes

Sarbanes-Oxley Reforms to Criminal Penalties

Creative Penalties for White-Collar Crime

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-1 General Principles

7-1d Indemnification of Crime Victims

Penalties are paid to the government, who may use fines to assist victims.

Defendants may be ordered to pay restitution.

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-2 White-Collar Crimes

7-2a Conspiracies

Agreements to commit an unlawful act

7-2b Money Laundering

Money Laundering Control Act prohibits knowingly participating in a financial transaction designed to conceal the source of the funds.

The Patriot Act expands coverage to all financial transactions.

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-2 White-Collar Crimes

7-2c Racketeering

Racketeer Influenced and Corrupt Organizations (RICO) Act: Designed to prevent those involved in organized crime from investing money obtained through racketeering in legitimate businesses.

Criminal and Civil Applications

Expanding Usage: Predicate act, qualifying underlying offense.

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-2 White-Collar Crimes

7-2d Bribery

The act of giving money, property, or a benefit to a person to influence their judgment

7-2e Commercial Bribery

An agent for another is paid or given something of value to make a decision on behalf of the principal that benefits the party paying the agent.

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-2 White-Collar Crimes

7-2f Extortion and Blackmail

Extortion: When a public officer makes an illegal demand.

Blackmail: Extortion demands made by a nonpublic official.

7-2g Corrupt Influence

Improper Political Influence

Foreign Corrupt Practice Act: Federal antibribery and anticorruption statute.

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-2 White-Collar Crimes

7-2h Counterfeiting

The fraudulent making of a document or coin that appears to be genuine but is not

7-2i Forgery

Fraudulent making or material altering of an instrument that attempts to create or change a legal liability of another

Uttering: Issuing or delivering the forged instrument.

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-2 White-Collar Crimes

7-2j Perjury

Knowingly giving false testimony in a judicial proceeding under oath

7-2k False Claims and Pretenses

False Claims

Obtaining Goods by False Pretenses

False Information Submitted to Banks

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-2 White-Collar Crimes

7-2l Bad Checks

Passing a check with intent to defraud or knowing that there are insufficient funds

7-2m Credit Card Crimes

Stealing a credit card, possessing the card of another without that person’s consent

7-2n Embezzlement

Fraudulent conversion of another’s property

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-2 White-Collar Crimes

7-2o Obstruction of Justice: Sarbanes-Oxley (SOX)

Altering, destroying, falsifying with intent to obstruct the administration of any matter within the jurisdiction of any U.S. department of agency

7-2p Corporate Fraud (SOX)

A new form of mail/wire fraud, corporate officers must certify financial statements when issued

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-2 White-Collar Crimes

7-2q The Common Law Crimes

Larceny: Taking another’s personal property with fraudulent intent.

Robbery: Taking personal property from the victim by force or threat.

Burglary: Breaking and entering the dwelling of another to commit a felony.

Arson: Malicious burning.

Riots and Civil Disorders

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-3 Criminal Law and the Computer

7-3a What is a Computer Crime?

A crime that can be committed only by a person having some knowledge of the operation of a computer

7-3b The Computer as Victim

Theft of Hardware

Theft of Software

Intentional Damage

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-3 Criminal Law and the Computer

7-3c Unauthorized Use of Computers

The unlawful use of a computer belonging to someone else

7-3d Computer Raiding

Taking information from a computer without the consent of the owner

7-3e Diverted Delivery by Computer

Using a computer to misdirect deliveries

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-3 Criminal Law and the Computer

7-3f Economic Espionage by Computer

The Economic Espionage Act: Stealing or communicating a trade secret.

7-3g Electronic Fund Transfer Crimes

The Electronic Fund Transfers Act: Using a counterfeit or stolen card to obtain money or goods in excess of a specified amount through an electronic fund transfer system.

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-3 Criminal Law and the Computer

7-3h Circumventing Copyright Protection Devices Via Computer

The Digital Millennium Copyright Act: Circumventing encryption on copyrighted material.

7-3i Spamming

Controlling the Assault of Non-Solicited Pornography and Marketing Act: Allows companies to bring suit against spammers.

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-4 Criminal Procedure Rights for Businesses

7-4a Fourth Amendment Rights for Businesses

Search and Seizure: Warrants: Government agencies must obtain warrants before searching and seizing property.

Exceptions to the Warrant Requirement

Emergencies and plain view

Business Records and Searches

Protections for Privileged Records and Documents

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-4 Criminal Procedure Rights for Businesses

7-4b Fifth Amendment Self-Incrimination Rights for Businesses

Self-Incrimination: Applies to individuals only, not businesses.

Miranda Rights: Warnings given to those who face custodial interrogation for criminal proceedings.

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition

7-4 Criminal Procedure Rights for Businesses

7-4c Due Process Rights for Businesses

Due Process: The right to be heard, question witnesses, and present evidence before any criminal conviction.

Sixth Amendment: Guarantees that the entire process will be completed in a timely fashion because this amendment guarantees a speedy trial.

Twomey /Jennings/Greene: Anderson’s Business Law, 23rd Edition