Business Law I Criminal Law and Procedure

1. Business Law I Criminal Law and Procedure

2. Civil Law vs. Criminal Law Civil law concerns the rights and liabilities between private parties; criminal law concerns those activities that society has outlawed. • Procedure for criminal trial -- government decides whether to prosecute; defendant has the right to a jury trial. • In a criminal suit, the court determines guilt, so that a punishment can be given. • A felony is a serious crime, with a sentence of one year or more in prison. A misdemeanor is less serious, often with a sentence of less than a year.

3. The Prosecution’s Case • Conduct Outlawed • The prosecution must show that the defendant’s alleged activity is indeed illegal. • Burden of Proof • The jury must believe beyond a reasonable doubt in order to convict. This is to protect innocent defendants from undeserved punishment. • Actus Reus(means “the guilty act”) • The prosecution must show that the defendant committed the act (not just talked about doing it). • Mens Rea(means “guilty state of mind”)

4. Mens Rea The defendant must have had a “guilty state of mind.” • General Intent • Required by most crimes; the defendant intended to do the illegal act they are accused of doing. • Specific Intent • Some cases require that the defendant intended to do something beyond the act they are accused of.

5. Defenses • Insanity • A defendant who can prove he was insane at the time of the crime will be declared not guilty. • Most common test used to determine sanity: • M’Naughten Rule: must show a serious, identifiable mental illness and that he didn’t understand the nature of his act. • A very small percentage of defendants plead insanity and a very small percentage of those are acquitted. Those who are acquitted often spend longer in mental institutions than they would have spent in prison.

6. Case AnalysisThe Insanity Defense You Be the Judge - Bieber v. People, 856 P.2d 811, 1993 Colo. Lexis 630, Supreme Court of Colorado, 1993 Lower court ruling AFFIRMED • Facts • Issue • Decision? • Reasoning?

7. Crimes That Harm Business • Larceny-- The trespassory taking of personal property with the intent to steal it. • Someone else originally had the property. • Applies to personal property, not services or real estate. • Fraud-- Deception for the purpose of taking money or property from someone. • Includes bank fraud, wire and mail fraud, insurance fraud, Medicare fraud. • Arson– malicious use of fire or explosives to destroy property.

8. Crimes That Harm Business(cont’d) • Embezzlement-- Fraudulent conversion of someone else’s property already in the defendant’s possession. • Computer Crime-- federal statutes prohibit unauthorized access to computers: • in the federal government • at financial institutes involved with the government • by means of an internet that crosses state lines

9. Computer Crime Statutes • The Computer Fraud and Abuse Act– prohibits using a computer to commit theft, espionage, trespass, fraud and damage to another computer. • The Access Device Fraud Act– outlaws the misuse of cards, codes, account numbers, etc. • The Identity Theft and Assumption Deterrence Act– bars the use of false identification to commit fraud or other crime. • The Wire and Electronic Communications Interception Act– makes it a crime to intercept most wire, oral and electronic communications.

10. Case AnalysisIdentity Theft United States v. Dragon, 471 F.3d 501, Third Circuit Court of Appeals, 2006 • Facts • Issue • Decision • Reasoning • Discussion

11. Crimes Committed by Business • Vicarious Liability-- if someone commits a crime within the scope of his employment and to benefit the corporation, the company is liable. • Punishment • Fines -- appropriate since this hurts the profit. • Imprisonment? -- yes, in the sense of closing down the company temporarily or permanently. • Compliance programs-- if a company has a valid, functioning plan to prevent and detect criminal behavior, the judge must (according to Federal Sentencing Guidelines) reduce the penalty of a crime of an employee.

12. Crimes Committed by Business (cont’d) • Occupational Safety and Health Act • OSHA sets standards for safety in the workplace. • A state may set standards tougher than OSHA. • Racketeer Influenced and Corrupt Organization Act • Creates both civil and criminal law liabilities. • Is aimed at organized crime -- those involved with a series of illegal acts. • Environmental Crimes-- such as illegal air and water pollution.

13. Case AnalysisCrimes Committed by Business Commonwealth v. Angelo Todesca Corp., 466 Mass. 128, 842 N.E. 2d 930, Supreme Judicial Court of Massachusetts, 2006 • Facts • Issue • Decision • Reasoning • Discussion

14. Racketeer Influenced and Corrupt Organization Act RICO -- RICO prohibits using two or more racketeering acts to accomplish certain goals. • Racketeering Acts • Include (among others) embezzlement, bribery, arson, mail fraud, securities fraud, and wire fraud. • To violate RICO, there must be two or more of these acts within a 10-year period, and a threat of continued criminal activity (pattern of racketeering activity). • Goals that Violate RICO • Using criminal money to invest in or acquire a business. • Maintain a business using criminal activity. • Operate a business using criminal activity. • Conspiring to do the above.

15. RICO (cont’d) • Requirements • Two listed offenses within a 10-year period • Threat of continued criminal activity (pattern of racketeering activity • Common Business Violations • Mail fraud • Securities fraud • Wire fraud • Bribery

16. Penalties Under RICO • Criminal • Fine up to $25,000 • Imprisonment up to 20 years • Forfeiture • Civil • In government suit: • Divestiture • Dissolution • Other forfeiture • In private suit: • Treble damages • Attorneys’ fees

17. Case AnalysisCrimes Committed by Business United States v. Kennard, 472 F.3d 851, 11th Circuit Court of Appeals, 2006 • Facts • Issue • Decision • Reasoning • Discussion

18. The Criminal Process

19. The Criminal Process (cont’d) • Notification to Police-- the police find out about a suspect, sometimes by an informant. • Warrant-- if a search is needed, police take an affidavit (sworn written statement from an informant) to a judge, who issues a warrant, giving permission to search a particular place, looking for particular evidence. (Fourth Amendment) • Probable Cause-- based on the information given, it is likely that the specified evidence will be found. • Search and Seizure-- police may search and seize only what is specified by the warrant.

20. The Criminal Process(cont’d) • Arrest Warrant-- based on information found in the search, the judge may issue an arrest warrant. • Arrest-- when a suspect is arrested, he is informed of his rights (Miranda warning) and booked (name, photograph and fingerprints are recorded, along with the charges). • Self-incrimination-- the prosecution may not use coercion to force a confession from a suspect. The suspect may refuse to answer any questions that could be used to convict him. (Fifth Amendment)

21. The Criminal Process(cont’d) • Indictment-- if a grand jury (ordinary citizens) determines that there is probable cause to proceed to trial, the suspect is indicted (charged with the crime). • Arraignment-- the indictment is read to the suspect, who then pleads guilty or not guilty to the charges. • Plea Bargaining-- in many cases, the prosecution will offer to end the case with reduced charges if the defendant will plead guilty.

22. The Criminal Process(cont’d) • Trial and Appeal-- if no plea bargain is reached, the case goes to trial. The prosecution must convince the jury beyond a reasonable doubt in order to convict. Convicted defendants may appeal. • The Patriot Act of 2001– passed in response to the terrorist acts of September 11, 2001; designed to give law enforcement officials greater power to investigate and prevent potential terrorist assaults.

23. Criminal Procedural Protection

24. Criminal Procedural Protection (cont’d)

25. Criminal Procedural Protection (cont’d)

26. Yes Did the Defendant have the requisite criminal intent? Yes Did the Prosecution prove each of these elements beyond a reasonable doubt? Yes Was the statute constitutionally valid? Yes Conviction Did the Defendant violate a statute? No No No No No criminal conviction A Criminal Case

27. End ofCriminal Law and Procedure