Copyright © 2004 by Prentice-Hall. All rights reserved. PowerPoint Slides to Accompany BUSINESS LAW E-Commerce and Digital Law International Law and Ethics 5 th Edition by Henry R. Cheeseman Slides developed by Les Wiletzky Wiletzky and Associates, Puyallup, WA Chapter 6 Business and Online Crimes Chapter 6 Business and Online Crimes

6 - 2Copyright © 2004 by Prentice-Hall. All rights reserved. Crime Any act done by an individual in violation of those duties that he or she owes to society and for the breach of which the law provides that the wrongdoer shall make amends to the public.

6 - 3Copyright © 2004 by Prentice-Hall. All rights reserved. Penal Codes and Regulatory Statutes  Statutes are the source of criminal law.  State penal codes define in detail: The activities considered to be crimes within their jurisdiction; and The activities considered to be crimes within their jurisdiction; and The penalties that will be imposed for their commission. The penalties that will be imposed for their commission.

6 - 4Copyright © 2004 by Prentice-Hall. All rights reserved. Penal Codes and Regulatory Statutes (continued)  A comprehensive federal criminal code defines federal crimes.  State and federal regulatory statutes often provide for criminal violations and penalties.

6 - 5Copyright © 2004 by Prentice-Hall. All rights reserved. Parties to a Criminal Action  In a criminal lawsuit, the government is the plaintiff.  The government is represented by a lawyer called the prosecutor.  The accused is the defendant.  The accused is represented by a defense attorney.

6 - 6Copyright © 2004 by Prentice-Hall. All rights reserved. Classification of Crimes Felonies Misdemeanors Violations

6 - 7Copyright © 2004 by Prentice-Hall. All rights reserved. Felonies  Felonies are the most serious kinds of crimes.  Felonies include crime that are mala in se – inherently evil.  Most crimes against the person and some business-related crimes are felonies.

6 - 8Copyright © 2004 by Prentice-Hall. All rights reserved. Misdemeanors  Misdemeanors are less serious than felonies.  They are crimes mala prohibita – not inherently evil but are prohibited by society.  Many crimes against property are misdemeanors.

6 - 9Copyright © 2004 by Prentice-Hall. All rights reserved. Violations  Crimes that are neither a felony nor a misdemeanor that are usually punishable by a fine.  For example: Traffic violations Traffic violations Jaywalking Jaywalking

6 - 10Copyright © 2004 by Prentice-Hall. All rights reserved. Essential Elements of a Crime Criminal Act Criminal Intent

6 - 11Copyright © 2004 by Prentice-Hall. All rights reserved. Criminal Act  The defendant must have actually performed the prohibited act.  Actus reus (guilty act) – the actual performance of the guilty act.  Merely thinking about a crime is not a crime because no action has been taken.

6 - 12Copyright © 2004 by Prentice-Hall. All rights reserved. Criminal Intent  Mens rea (evil intent) – the possession of the requisite state of mind to commit a prohibited act.  Specific intent – the accused purposefully, intentionally, or with knowledge commits a prohibited act.  General intent – a showing of recklessness

6 - 13Copyright © 2004 by Prentice-Hall. All rights reserved. Criminal Acts as the Basis for Tort Action  An injured party may bring a civil tort action against a wrongdoer who has caused the party injury during the commission of a criminal act.  Civil lawsuits are separate from the government’s criminal action against the wrongdoer.

6 - 14Copyright © 2004 by Prentice-Hall. All rights reserved. Civil and Criminal Law Compared Issue Civil Law Criminal Law Party who brings the action The plaintiff The government Trial by jury Yes, except actions for equity Yes Burden of proof Preponderance of the evidence Beyond a reasonable doubt Jury vote Judgment for plaintiff requires specific jury vote Conviction requires unanimous jury vote Sanctions and penalties Monetary damages and equitable remedies Imprisonment, fine, capital punishment, probation

6 - 15Copyright © 2004 by Prentice-Hall. All rights reserved. Criminal Procedure Pretrial Criminal Procedure The Criminal Trial

6 - 16Copyright © 2004 by Prentice-Hall. All rights reserved. Pretrial Criminal Procedure  Pretrial criminal procedure consists of several distinct stages including: Arrest Arrest Indictment or Information Indictment or Information Arraignment Arraignment Plea Bargaining Plea Bargaining

6 - 17Copyright © 2004 by Prentice-Hall. All rights reserved. The Criminal Trial  All jurors must unanimously agree before the accused is found guilty of the crime charged.  If one juror has reasonable doubt about the guilt of the accused, the accused is not guilty of the crime charged.  If all of the jurors agree that the accused did not commit the crime, the accused is innocent of the crime charged.

6 - 18Copyright © 2004 by Prentice-Hall. All rights reserved. The Criminal Trial (continued) After trial, the following rules apply:  If the defendant is found guilty, he or she may appeal.  If the defendant is found innocent, the government cannot appeal.

6 - 19Copyright © 2004 by Prentice-Hall. All rights reserved. The Criminal Trial (continued)  If the jury cannot come to a unanimous decision about the defendant’s guilt, the jury is considered a hung jury. The government may choose to retry the case before a new judge and jury. The government may choose to retry the case before a new judge and jury.

6 - 20Copyright © 2004 by Prentice-Hall. All rights reserved. Crimes Affecting Business  Robbery  Burglary  Larceny  Theft  Receiving stolen property  Robbery  Burglary  Larceny  Theft  Receiving stolen property  Arson  Forgery  Extortion  Credit card crimes  Bad checks  Arson  Forgery  Extortion  Credit card crimes  Bad checks

6 - 21Copyright © 2004 by Prentice-Hall. All rights reserved. White Collar Crimes Embezzlement Criminal Fraud Bribery

6 - 22Copyright © 2004 by Prentice-Hall. All rights reserved. The Foreign Corrupt Practices Act  Makes it illegal for American companies, or their officers, directors, agents, or employees, to bribe a foreign official, a foreign political party official, or a candidate for foreign political office.  Requires firms to keep accurate books and records of all foreign transactions.

6 - 23Copyright © 2004 by Prentice-Hall. All rights reserved. Racketeer Influenced and Corrupt Organizations Act (RICO)  Makes it a federal crime to acquire or maintain an interest in, use income from, or conduct or participate in the affairs of an “enterprise” through a “pattern” of “racketeering activity.”

6 - 24Copyright © 2004 by Prentice-Hall. All rights reserved. Inchoate Crimes  Inchoate crimes include incomplete crimes and crimes committed by non-participants. Criminal conspiracy Criminal conspiracy Attempt to commit a crime Attempt to commit a crime Aiding and abetting the commission of a crime Aiding and abetting the commission of a crime

6 - 25Copyright © 2004 by Prentice-Hall. All rights reserved. Corporate Criminal Liability  Corporations may be held criminally liable for actions of their officers, employees, or agents.  Corporate directors, officers, and employees are personally liable for the crimes they commit while acting on behalf of the corporation.

6 - 26Copyright © 2004 by Prentice-Hall. All rights reserved. Constitutional Safeguards  Fourth Amendment Protection Against Unreasonable Searches and Seizures  Fifth Amendment Privilege Against Self- Incrimination  Fifth Amendment Protection Against Double Jeopardy

6 - 27Copyright © 2004 by Prentice-Hall. All rights reserved. Constitutional Safeguards (continued)  Sixth Amendment Right to a Public Jury Trial  Eighth Amendment Protection Against Cruel and Unusual Punishment

6 - 28Copyright © 2004 by Prentice-Hall. All rights reserved. Fourth Amendment Protection Against Unreasonable Searches and Seizures  The Fourth Amendment protects persons and corporations from overzealous investigative activities by the government.  “Reasonable” search and seizure by the government is lawful.  Search warrants based on probable cause are necessary in most cases.

6 - 29Copyright © 2004 by Prentice-Hall. All rights reserved. Fourth Amendment Protection Against Unreasonable Searches and Seizures (continued)  Exclusionary Rule A rule that says evidence obtained from an unreasonable search and seizure can generally be prohibited from introduction at a trial or administrative proceeding against the person searched.

6 - 30Copyright © 2004 by Prentice-Hall. All rights reserved. Fifth Amendment Privilege Against Self- Incrimination  The Fifth Amendment states that no person shall be compelled in any criminal case to be a witness against him- or herself.  This protection applies in federal cases and is extended to state and local criminal cases through the Due Process Clause of the Fourteenth Amendment.

6 - 31Copyright © 2004 by Prentice-Hall. All rights reserved. Fifth Amendment Privilege Against Self- Incrimination (continued)  Protection against self-incrimination applies only to natural persons who are accused of crimes.  Corporations and partnerships (artificial persons) cannot raise this protection. Business records of corporations are not generally protected from disclosure. Business records of corporations are not generally protected from disclosure.

6 - 32Copyright © 2004 by Prentice-Hall. All rights reserved. Fifth Amendment Privilege Against Self- Incrimination (continued)  Attorney-Client Privilege A rule that states a client can tell his or her lawyer anything about the case without fear that the attorney will be called as a witness against the client. There is no accountant-client privilege under federal law. There is no accountant-client privilege under federal law.

6 - 33Copyright © 2004 by Prentice-Hall. All rights reserved. Fifth Amendment Protection Against Double Jeopardy  The double jeopardy clause of the Fifth Amendment protects persons from being tried twice for the same crime.  If the same criminal act involves several different crimes, the accused may be tried for each of the crimes with no double jeopardy.

6 - 34Copyright © 2004 by Prentice-Hall. All rights reserved. Fifth Amendment Protection Against Double Jeopardy (continued)  If the same act violates the laws of two or more jurisdictions, each jurisdiction may try the accused without violating the double jeopardy clause.

6 - 35Copyright © 2004 by Prentice-Hall. All rights reserved. Sixth Amendment Right to a Public Trial  The Sixth Amendment guarantees certain rights to criminal defendants. These rights are: 1. To be tried by an impartial jury of the state or district in which the accused crime was committed. 2. To confront (cross-examine) the witnesses against the accused.

6 - 36Copyright © 2004 by Prentice-Hall. All rights reserved. Sixth Amendment Right to a Public Trial (continued)  Sixth Amendment rights (continued) 3. To have the assistance of a lawyer. 4. To have a speedy trial.

6 - 37Copyright © 2004 by Prentice-Hall. All rights reserved. Eighth Amendment Protection Against Cruel and Unusual Punishment  Cruel and Unusual Punishment – a clause of the Eighth Amendment that protects criminal defendants from torture or other abusive punishment. This clause does not prohibit capital punishment. This clause does not prohibit capital punishment.

6 - 38Copyright © 2004 by Prentice-Hall. All rights reserved. Federal Antiterrorism Act of 2001  In response to the events of September 11, 2001, Congress enacted a new federal Antiterrorism Act.  The act assists the government in detecting and preventing terrorist activities and investigating and prosecuting terrorists.

6 - 39Copyright © 2004 by Prentice-Hall. All rights reserved. Federal Antiterrorism Act of 2001 (continued)  The act contains the following main features: Special Intelligence Court Special Intelligence Court Nationwide Search Warrant Nationwide Search Warrant Roving Wiretaps Roving Wiretaps Sharing of Information Sharing of Information Detention of Non-citizens Detention of Non-citizens Bioterrorism Provision Bioterrorism Provision Anti-Money Laundering Provisions Anti-Money Laundering Provisions