Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning Chapter 8 Crimes Twomey Jennings Anderson’s Business Law and the Legal Environment, Comprehensive 20e Anderson’s Business Law and the Legal Environment, Standard 20e Business Law: Principles for Today’s Commercial Environment 2e

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 2 General Principles Crime: When a person does not live up to the standards set by law, that society will prosecute the person for the misconduct. Crimes are classified as felonies and misdemeanors. –A felony is a crime that is punishable by imprisonment or death. –A misdemeanor is punishable by a fine or less than a year in prison.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 3 Basis of Criminal Liability Mental State The defendant does not have to know that the act is criminal; it is sufficient that the act was done voluntarily. Act An act or omission of a required act must actually take place. Harm Harm may occur, but it is not a required element for an act to be classified as a crime.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 4 Responsibility for Criminal Acts What happens when ‘innocent’ person is charged with a crime? Corporate Responsibility. –Corporations may be held responsible for the criminal acts of their employees. –Liability may attach when employees fail to act. –Forfeiture is a penalty for a crime.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 5 Sarbanes-Oxley Reforms Passed after the Enron-WorldCom debacles, called the White-Collar Crime Penalty Enhancement Act of –Substantially increases penalties for corporate crimes. –Mail and wire fraud penalties to 20 years.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 6 Indemnification of Victims Penalties are paid to the government. Victims can bring civil lawsuit against wrongdoer. Indemnification of unjustly convicted.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 7 White-Collar Crimes Conspiracies. Crimes related to Production, Competition, and Marketing. Money Laundering. Racketeering. Bribery. Commercial Bribery.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 8 White-Collar Crimes Extortion and Blackmail. Corrupt Influence. Counterfeiting. Forgery. Perjury. False Claims and Pretenses. Bad Checks.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 9 White-Collar Crimes Credit Card Crimes. Embezzlement. Obstruction of Justice: Sarbanes- Oxley. Corporate Fraud: Sarbanes-Oxley.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 10 Common Law Crimes Larceny. Robbery. Burglary. Arson. Riots and Civil Disorders.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 11 Criminal Law and the Computer Statutes have expanded the area of criminal law to meet situations in which computers are involved. –The unauthorized taking of information from a computer is made a crime under both federal and state statutes. –The Federal Computer Access Device and Computer Fraud and Abuse Act of 1984 and the Electronic Fund Transfers Act of 1978 also expand the definition of a computer crime.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 12 Criminal Law and the Computer Crime that can be committed only by person having knowledge or use of a computer. Computers can be ‘victims.’ –Theft of Hardware or Software. –Diverting Delivery by Computer. –Economic Espionage by Computer. –Circumventing Copyright Protection by Computer.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 13 Criminal procedure is dictated by the Fourth, Fifth, and Sixth Amendments. –The Fourth Amendment protects against unreasonable searches. –The Fifth Amendment protects against self- incrimination and provides due process. Corporations do not have a right to remain silent. Disclosures of corporate records must be made –The Sixth Amendment guarantees a speedy trial. Criminal Procedure Rights for Businesses

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 14 Criminal Procedure Rights for Businesses Fourth Amendment rights for Businesses. –Search and Seizure warrants. –Exceptions to the Warrant Requirement. –Business Records and Searches. –Protections for Privileged Records and Documents. Fifth Amendment for Businesses. –Miranda Rights.