dynamic business law essentials 3e 2016 chapter 06

Differences Between Criminal and Civil Procedure Criminal Procedure • The government, through a prosecutor, always brings the criminal case • The objective is punishment, in the form

Chapter 6Criminal Law and Business

Chapter 6 Case Hypothetical

Thomas Townsend has an embarrassing criminal past In 1985, he was convicted of pedophilia, having had sexual relations with a 15-year-old child (at the time, Townsend was 29 years old.) By all accounts, Townsend has led a relatively uneventful life over the years since 1985, spending most of his time building and selling musical instruments to earn a living, and reclusively “keeping to himself” on his property on the edge of town.

Local police investigators are curious whether Townsend has truly learned from “the error of his ways.” The local sheriff has received a number of complaints from area citizens, who are appalled that a child sex offender is “among their midst.” Working in collaboration with the Federal Bureau of Investigation (FBI,) local police authorities devise and implement a plan to determine whether Thomas is leading an innocent life Over the course of an eighteen-month period, police investigators mail Townsend a circular they have created, advertising a fictitious publication called “Lustful Lads and Lasses.” Among other pronouncements, the circular entices readers to “order now before publication ceases; see young boys and girls aged 12-16

engaged in all sorts of acts only big boys and girls should be allowed to do!”

Having received the circular each month and having declined on seventeen occasions, Townsend finally responds to the circular on the eighteenth occasion, mailing in the $39.95 purchase price Local, state and federal authorities immediately intervene, arresting Townsend for solicitation of child pornographic materials

At Townsend’s arraignment hearing, his attorney moves for immediate dismissal of the charges, arguing entrapment Do the police efforts described constitute entrapment? Does entrapment justify dismissal of all charges against the accused? Rather than dismissal of charges, why not simply sanction those authorities

Chapter 6 Case Hypothetical and Ethical Dilemma

Warren Delaney believed that his home was his “castle,” and during the summer months every year, his “castle” was a tiny cabin nestled in the woods of upstate New York Delaney was an Economics professor at a small college in Florida, and for him, there was no better way to “rest and recharge”

after a hectic academic year than to head north for the cozy confines of his cabin.

For several consecutive years, Warren’s cabin had been vandalized and/or burglarized during the winter months while he was in Florida During the winter of 2010, several windows had been shattered In the winter of 2011, several pieces of furniture had been stolen At some point during the winter of 2012, the bedroom mattress had been ripped apart for some unexplained reason, with foam and fabric scattered about the bedroom floor On each of these occasions, the perpetrator had

forced the front door lock open, and had entered the cabin through the front door.

Warren envisioned a way to stop the criminal(s) responsible for these violations He spring-loaded a shotgun in the living room of the cabin, and pointed it directly at the front door The shotgun was configured so that if someone opened the front door while he was away, it would fire at the intruder Warren returned to his cabin in May 2014 and came upon a grisly scene The front door had been opened, and at the threshold was the partially-decomposed body of what appeared to be a middle-

Classification of Crimes

•Felonies—Serious crimes punishable by imprisonment for greater than one year, or death

•Misdemeanors—Less serious crimes punishable by fines, or imprisonment for less than one year

White Collar Crime

Definition: A variety of nonviolent illegal acts against society that occur most frequently in the

business context

Crimes Affecting Business: “White

Collar” Crimes

•Bribery

•Extortion

•Fraud

Extortion (Blackmail)

Definition: The making of threats

for the purpose of obtaining

money or property

Definition: A variety of means by which an individual intentionally uses some sort of misrepresentation

to gain advantage over another

person

Exhibit 6-1: Selected Types of

Definition: The wrongful conversion

of another’s property by one who is

lawfully in possession of that

property

Computer Crime

Definition: Any wrongful act that is directed against computers, uses computers to commit a crime, or

involves computers

Criminal Procedure

Differences Between Criminal and Civil

Procedure

Criminal Procedure

• The government, through a

prosecutor, always brings the

criminal case

• The objective is punishment, in

the form of a criminal fine

• The objective is to remedy a wrong done to the plaintiff, so the defendant will either have

to pay money damages, or be subject to an equitable remedy (injunction or specific

performance)

Constitutional Safeguards: The

Fourth Amendment

•Protection from “unreasonable search and seizure”

•Restrictions on warrants

Constitutional Safeguards: The

Fifth Amendment

•Prohibition of “double jeopardy”

•Right not to incriminate oneself

•Right to “due process”

Constitutional Safeguards: The Sixth

Amendment

•Right to a speedy and public trial

•Right to a trial by an impartial jury of one’s peers

•Right to be informed of the accusations against oneself

•Right to confront witnesses

Constitutional Safeguards: The Eighth

Amendment

•Freedom from excessive bail

•Freedom from excessive fines

•Freedom from cruel and unusual punishment

Constitutional Safeguards: The

Fourteenth Amendment

•Extension of the right to due process

to all state matters

•Extension of most constitutional rights

to defendants at the state level

Criminal Procedure: Pretrial Procedure

•Arrest

•Booking

•First Appearance

•Indictment

“Miranda Rights” Before a law enforcement officer engages

in “custodial interrogation,” he/she must inform the defendant

questioning now or in the future”

•“If you cannot afford an attorney, one will be appointed for you before the questioning begins”

•“If you do not have an attorney available, you have the right

Criminal Procedure: Trial Procedure

Affirmative Defenses to Crimes

Affirmative Defenses to Crimes:

Infancy

A person who is not yet a legal adult may use this defense to defuse the “guilty mind”

requirement of a crime

Affirmative Defenses to Crimes:

Mistake of Fact

The defendant says his or her honest and reasonable mistake about a fact relevant to the

commission of the crime negates the idea of a guilty mind

Affirmative Defenses to Crimes:

Affirmative Defenses to Crimes:

Affirmative Defenses to Crimes:

Duress

The defendant says he or she was forced to perform an act against his or her will

Affirmative Defenses to Crimes:

Affirmative Defenses to Crimes:

Affirmative Defenses to Crimes:

Justifiable Use of Force

The defendant contends the use of force was necessary to prevent

imminent death or great bodily harm

to the defendant or to another or to prevent the imminent commission of

Criminal Procedure: Posttrial

Procedure

•If jury returns verdict of not guilty, government (prosecution) cannot appeal the acquittal

•If jury returns verdict of guilty, defendant may appeal verdict by claiming prejudicial error of law at trial

•If no appeal, defendant sentenced after judge receives additional information relevant

to sentencing

The Racketeer Influenced and Corrupt Organizations Act (RICO)

•Prohibits persons employed by or associated with an enterprise from engaging in a pattern

of racketeering activity

•Anyone whose business or property has been damaged can sue to recover treble damages and attorney fees in a civil action

The False Claims Act

•Allows employees to sue employers on behalf of the federal government

•Employee retains share of recovery

The Sarbanes-Oxley Act

•Passed by Congress in response to the business scandals of the early 2000s (Examples: Enron, WorldCom, Global Crossing, Arthur Anderson)

•Criminalizes specific non-audit services when provided by a registered accounting firm to an audit client

•Increases the punishment for a number of collar offenses