Legal environment of business Paper
TonyZZ
chap_7-white_collar_and_other_business_crimes_1.pptelements
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As a general rule, an individual can engage in any type of conduct he or she wishes unless there is a law prohibiting those actions.
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Crimes against businesses include: shoplifting, robbery, burglary, and employee theft, which cost businesses billions of dollars annually.
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Offenses committed by people in business dress.
Not usually physical violence but rather unethical activity, fraud, or financial theft.
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Crawford was arrested walking from a commercial building that had a courtyard. The police received a report of a burglary in progress at the building. Defense argued that it was not burglary because of the courtyard.
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What is the
law in
California
on burglary?
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Every person who enters any room, shop or building with the intent to commit any felony is guilty of burglary
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The courtyard is an integral part of the building. The offices had four walls and a roof and the only entry was though the courtyard that had locked gates on each end.
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Consider
the following two cases…
A person gives his ATM card to a co-worker to withdraw $20 from his checking account. Instead, the
roommate withdraws $500.
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What crime has
been committed?
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Taking and carrying away the property of another without consent and with the intent of depriving the other of the goods permanently
Larceny
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Refers to
possession
and not
ownership
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Embezzlement occurs when someone takes property entrusted to him or her with the intent to deprive the owner of the property.
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An embezzler is
lawfully entrusted with the property as opposed to a thief who improperly obtains possession of the asset.
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THEFT PLUS FORCE OR THREAT OF FORCE
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A pick pocket
is usually
not robbery,
but a purse
snatch in
which the
victim is knocked
to the ground
would be.
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Unlawful to buy
or receive stolen
goods knowing that
goods are stolen
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This crime occurs when one uses the Internet to sell property gained through unlawful means.
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also known as SHOPLIFTING
Retail Theft
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Using the victim’s personal
information to obtain a financial
advantage such as the
misappropriation of a credit
card or money from
a bank account.
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Now a federal crime under the Identify Theft
and Assumption
Deterrence Act
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Birdsong burst through a gate separating the tellers from the customers. He slammed the gate closed and threw a printer to the ground before ordering the tellers to stand up and give him the money from the teller drawers.
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A person is guilty of robbery when, in the course of committing theft, he uses or threatens the use of physical force on another person with intent to accomplish theft
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The defendant’s conduct must be objectively menacing. When a defendant demands money in making the demand and acts aggressively toward inanimate objects nearby, that behavior can satisfy the requirement for robbery.
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Agreement between
two or more people
to commit a crime or
to do a lawful act in
an unlawful manner
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Allows the government
to file charges against
anyone who has participated
in the planning or commission
of a crime and to hold
each liable for the actions
of the other.
MUST HAVE
TWO PEOPLE AGREE
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NEED
OVERT
ACT
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MUST DO
SOMETHING IN
FUTHERANCE OF
THE CONSPIRACY
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Is it a defense that
the person to the
conspiracy was too
drunk to have formed
the intent to conspire
to commit the crime?
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The court in Hankinson v. Wyoming said that whether the defendant was too drunk to form the requisite intent to commit the crime is a jury
question. Here, the defendant made decisions that required some presence of mind. Therefore, the
defendant was guilty as charged.
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Illegal actions
committed in
a business
setting
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This includes such things
as computer fraud, health
care fraud, securities fraud, insider trading, theft of trade secrets, embezzlement, and
tax evasion.
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Have you
ever heard of
“payola” or
“kickback?”
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Bribery is the act
of offering something
of value to another with
the intent of influencing that
person’s opinion or to have
something done in return
by that entity.
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Examples would be
giving money to a
juror to influence the
vote, or paying a cop to
overlook a crime.
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The term originated
during the days of Al
Capone when organized
crime owned Laundromats
to dispose of money obtained
by illegal means.
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The mob needed to show a
legitimate source for their
funds, so this was done by
buying legitimate businesses
that would commingle the
illegal earnings with the
revenues received from
these businesses.
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Today, the law is called the
Money Laundering Control Act.
Its purpose is to
go after the third party
who claims ownership
to money obtained through
illegal means.
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A person charged with the offense does not have to commit the crime which generated the illegal revenue.
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Facts:
Awada owned a bar. He placed bets with Sabby. Sabby took checks given to him by another bettor to Awada who deposited the checks in his account ad gave the cash to Sabby
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There is absolutely no requirement that a defendant also be involved in the underlying crime. Only needs to know transaction is to conceal.
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Insider trading occurs
when corporate insiders,
such as officers, directors
and employees,
buy or sell stock in
their own companies.
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occurs when
a person buys or sells stock
while in possession of
information about the stock
that has not been made public .
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Would it be illegal if a
CEO tells a friend about
something in the company that
has not been made public and
the friend sells his shares of
stock in that company?
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Would it be illegal if a
a bank employee comes
into non-public information
about a business while
processing a loan application
and buys the stock
in that business?
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There are two theories
of insider trading:
- The classical theory
and
2) The misappropriation
theory.
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The classical theory
imposes liability on
insiders who trade on the
basis of confidential
information obtained
by their positions
within the company.
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The President of a firm
knows that the FDA is not
going to approve a cancer
drug and immediately
sells his stock in the
company before the news is
made public.
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The misappropriation theory
imposes liability on
outsiders who trade on the
basis of confidential
information obtained
by reason of their relationship
with the person possessing
the information.
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“Tipping”
- providing confidential
Information to someone outside of the
Organization who then trades on
that information
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Tyler’s Sports Bar and Grill
needs to increase its revenues so
it decides to build a microbrewery.
A loan is needed, but the bar’s
financials will not support the
application. Joe Roberts
changes the financials
to reflect higher revenues.
Has he done anything illegal?
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Suppose you want to buy a home but
need to show extra income on your
loan application to qualify for
a mortgage. Therefore, your
father gives you a letter stating
that you work at his business
and make $25,000 a year when
you don’t work there. Is this illegal?
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This crime occurs whenever a person makes a false statement of a material fact or overvalues property for purposes of inducing a bank to take action.
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Does the bank have to rely
on the false statement for
a person to be guilty
of the crime?
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No. Whether the bank
relied on the statement
is irrelevant. The reason behind the law is that false statements to federally insured banks can mislead government auditors.
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Anything wrong with filing
a bankruptcy petition, overstating
your debts or understating
your assets? After all, you can’t
pay off your creditors, so why
does it matter?
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This crime occurs when a person
devises a scheme to defraud by:
filing a false bankruptcy
statement; filing a false document
in a bankruptcy proceeding; or
making a fraudulent representation
or claim in a bankruptcy case.
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This crime requires the accused to
have engaged in two or more instances
of racketeering and have
directly invested
in, maintained, or participated in a
criminal enterprise affecting
interstate or foreign commerce.
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Activities covered include:
Murder, kidnapping, gambling
arson, robbery, bribery, extortion,
Mail and wire fraud, obstruction of
Justice, witness intimidation,
Money laundering, embezzlement,
Etc.
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- Scheme to defraud
- Which involves the use of the mails
Or a wire communication
3) For the purpose of executing
the scheme.
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Even though a corporation
is a separate entity from
its officers and employees,
it may still be held liable
for the criminal actions of
its employees committed
within the scope
of the employment.
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Criminal liability arises
under the doctrine of respondent
superior. In other words, a
corporation can’t act on its
own, so it acts through its agents
and employees. Therefore, it
should be liable for those
criminal acts committed on
behalf of the business.
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When is an employee
acting within the
scope of authority for
a corporation to be liable
for criminal
activity?
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An employee is acting within the scope of
employment if the (1) the employee
has the authority to do the particular
corporate business which was
conducted criminally; (2) the employee
was acting in part in furtherance of
the business; and (3) corporate
management has authorized or tolerated
the criminal acts.
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A classic case would
be a bartender
serving alcohol to
a minor.
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Should a fraternity be
criminally liable if one
of its members puts beer
in a soda machine
at a pledge party and
a minor buys a beer?
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A fraternity held a rush at its
house, and the members put beer in a
soda machine. A 19 year old
then bought a beer. The fraternity
had voted not to provide beer at
rush, and the machine had been
moved to an area in which
the defendant did not have control.
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What did the
fraternity
argue?
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The individuals
responsible for making
beer available for sale to the
minor were not acting on
behalf of the fraternity or
within the scope of
their authority.
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The key for corporate liability is whether the agent is acting within the scope of apparent authority. This occurs when the principal conducts itself in a way to cause a third person to believe that the agent is authorized to act. Here, the defendant had
control over the soda machine and apartment. They also had interest in the proceeds, and a fraternity member was making change for the machine. Many of the guests at the party were under 21, so they should have known.
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HANDWRITING
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Marra, an accountant, refused to comply with an IRS subpoena asserting 5th amendment rights. He was not being investigated, he was the accountant for a company being investigated
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Are Fifth Amendment rights
violated since turning
Over documents would
Incriminate him?
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Marra must respond to each question and request and raise his 5th amendment rights to each.
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The victim said that
her assailant wore a
ski mask but had a tattoo
of a shark on his shoulder.
District Attorney wants
the defendant to remove
his shirt in court.
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Can Christopher be
forced to take off his
shirt in court for an
in-court identification,
or does that violate his
Fifth Amendment rights?
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While the in-court
identification may
incriminate him, he must
remove his shirt since
it is not testimony
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This Amendment deals with the law of search and seizure
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- Prohibits unlawful search and seizures
- Warrants must be issued upon probable cause
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Generally, the police
need a search
warrant to search
a person or
his property.
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Officer must get
written authorization
in form of search
warrant based
upon probable cause.
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Search Warrant
is specific as to
location and item.
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POST V. RUTTER
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After receiving a complaint of an administrative violation, the defendant attempted to inspect plaintiff’s business. Plaintiff brought suit against defendant for violating his 4th amendment rights
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Ohio’s statute authorizes warrantless searches. The defendant had a lessened expectation of privacy. Such searches are necessary for enforcement of the act. Plaintiff’s rights were not violated.
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