1. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. PowerPoint Slides to Accompany CONTEMPORARY BUSINESS AND ONLINE COMMERCE LAW 6 th Edition by Henry R. Cheeseman Chapter 6 Criminal Law and White Collar Crime

2. 6 - 2Copyright © 2009 by Pearson 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.

3. 6 - 3Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Penal Codes and Regulatory Statutes Statutes are the source of criminal law. Federal and state statutes define activities that are considered to be crimes within their jurisdictions. Many regulatory statutes provide for criminal violations and penalties.

4. 6 - 4Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Parties to a Criminal Action plaintiff. In a criminal lawsuit, the government is the plaintiff. prosecutor. The government is represented by a lawyer called the prosecutor. defendant. The accused is the defendant. defense attorney. The accused is represented by a defense attorney.

5. 6 - 5Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Classification of Crimes Felonies Misdemeanors Violations All crimes can be classified into one of the following categories:

6. 6 - 6Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Felonies Felonies Felonies are the most serious kinds of crimes. mala in se Felonies include crime that are mala in se – inherently evil. Most crimes against the person and some business-related crimes are felonies.

7. 6 - 7Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Misdemeanors Misdemeanors Misdemeanors are less serious than felonies. mala prohibita They are crimes mala prohibita – not inherently evil but are prohibited by society. Many crimes against property are misdemeanors.

8. 6 - 8Copyright © 2009 by Pearson 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 Jaywalking

9. 6 - 9Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Essential Elements of a Crime Two elements must be proven for a person to be found guilty of most crimes: 1. Criminal Act 2. Criminal Intent Strict or absolute liability Strict or absolute liability--standard for imposing criminal liability without a finding of intent.

10. 6 - 10Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Criminal Act The defendant must have actually performed the prohibited act. Actus reus 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.

11. 6 - 11Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Criminal Intent Mens rea Mens rea (evil intent) – the possession of the requisite state of mind to commit a prohibited act. Specific intent Specific intent – the accused purposefully, intentionally, or with knowledge commits a prohibited act. General intent General intent – a showing of recklessness.

12. 6 - 12Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Criminal Acts as the Basis for Tort Actions civil 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.

13. 6 - 13Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Civil and Criminal Law Compared IssueCivil LawCriminal Law Party who brings the actionThe plaintiffThe government Trial by juryYes, except actions for equity Yes Burden of proofPreponderance of the evidence Beyond a reasonable doubt Jury voteJudgment for plaintiff requires specific jury vote Conviction requires unanimous jury vote Sanctions and penaltiesMonetary damages and equitable remedies Imprisonment, fine, capital punishment, probation

14. 6 - 14Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Pretrial Criminal Procedure Pretrial criminal procedure consists of several distinct stages including: Arrest Indictment or Information Arraignment Plea Bargaining

15. 6 - 15Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. The Criminal Trial unanimously guilty All jurors must unanimously agree before the accused is found guilty of the crime charged. reasonable doubt not guilty If one juror has reasonable doubt about the guilt of the accused, the accused is not guilty of the crime charged. innocent If all of the jurors agree that the accused did not commit the crime, the accused is innocent of the crime charged.

16. 6 - 16Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. 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. hung jury. 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.

17. 6 - 17Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Crimes Affecting Business Robbery Burglary Larceny Theft Receiving stolen property Arson Extortion Robbery Burglary Larceny Theft Receiving stolen property Arson Extortion

18. 6 - 18Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. The Information Infrastructure Protection (IIP) Act (1996) Federal law that addresses computer- related crimes as distinct offenses The Act provides protection for any computer attached to the Internet. The Act makes it a federal crime for anyone to intentionally access and obtain information from a protected computer without authorization.

19. 6 - 19Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. White-Collar Crimes Crimes that are prone to be committed by businesspersons that usually involve cunning and deceit rather than physical force Forgery Embezzlement Bribery Criminal Fraud Mail Fraud Wire Fraud Money Laundering Identity Fraud Forgery Embezzlement Bribery Criminal Fraud Mail Fraud Wire Fraud Money Laundering Identity Fraud

20. 6 - 20Copyright © 2009 by Pearson 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

21. 6 - 21Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Racketeer Influenced and Corrupt Organizations Act (RICO) federal crime 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”

22. 6 - 22Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Money Laundering Control Act A federal statute that makes it a crime to: money transaction Knowingly engage in a money transaction through a financial institution involving property worth more than $10,000 financial transaction Knowingly engage in a financial transaction involving the proceeds of an illegal activity

23. 6 - 23Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Identity Theft and Assumption Deterrence Act (1998) Federal law that criminalizes identity fraud The Act makes it a federal felony punishable with prison sentences ranging from 3 to 25 years. The Act appoints the Federal Trade Commission (FTC) to help victims restore their credit and erase the impact of the imposter.

24. 6 - 24Copyright © 2009 by Pearson 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.

25. 6 - 25Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Constitutional Safeguards Fourth Amendment Fourth Amendment Protection Against Unreasonable Searches and Seizures Fifth Amendment Fifth Amendment Privilege Against Self- Incrimination Fifth Amendment Fifth Amendment Protection Against Double Jeopardy Sixth Amendment Sixth Amendment Right to a Public Jury Trial Eighth Amendment Eighth Amendment Protection Against Cruel and Unusual Punishment Fourth Amendment Fourth Amendment Protection Against Unreasonable Searches and Seizures Fifth Amendment Fifth Amendment Privilege Against Self- Incrimination Fifth Amendment Fifth Amendment Protection Against Double Jeopardy Sixth Amendment Sixth Amendment Right to a Public Jury Trial Eighth Amendment Eighth Amendment Protection Against Cruel and Unusual Punishment

26. 6 - 26Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Fourth Amendment Protection Against Unreasonable Searches and Seizures Fourth Amendment unreasonable searches and seizures. The Fourth Amendment protects persons and corporations from unreasonable searches and seizures. Search warrants Search warrants based on probable cause are necessary in most cases. Warrantless search Warrantless search permitted in certain situations Exclusionary rule

27. 6 - 27Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Fifth Amendment Privilege Against Self-Incrimination (1 of 2) Fifth Amendment The Fifth Amendment states that no person “shall be compelled in any criminal case to be a witness against himself”. Nontestimonial evidence Applies only to natural persons who are accused of crimes Businesses cannot raise this protection Miranda rights

28. 6 - 28Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Fifth Amendment Privilege Against Self-Incrimination (2 of 2) Attorney-Client Privilege 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 accountant-client privilege There is no accountant-client privilege under federal law Other privileges

29. 6 - 29Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Fifth Amendment Protection Against Double Jeopardy (1 of 2) double jeopardy clauseFifth Amendment 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.

30. 6 - 30Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Fifth Amendment Protection Against Double Jeopardy (2 of 2) If the same act violates the laws of two or more jurisdictions, each jurisdiction may try the accused without violating the double jeopardy clause.

31. 6 - 31Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Sixth Amendment Right to a Public Trial Sixth Amendment The Sixth Amendment guarantees certain rights to criminal defendants: To be tried by an impartial jury of the state or district in which the accused crime was committed To confront (cross-examine) the witnesses against the accused To have the assistance of a lawyer To have a speedy trial

32. 6 - 32Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Eighth Amendment Protection Against Cruel and Unusual Punishment Cruel and Unusual Punishment Eighth Amendment 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.

33. 6 - 33Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Federal Antiterrorism Act of 2001 (1 of 2) Antiterrorism Act. 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.

34. 6 - 34Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. Federal Antiterrorism Act of 2001 (2 of 2) The act contains the following main features: Special Intelligence Court Nationwide Search Warrant Roving Wiretaps Sharing of Information Detention of Non-citizens Bioterrorism Provision Anti-Money Laundering Provisions