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.
General Principles Mental State Act Harm Harm may occur, but it is not a required element for an act to be classified as a crime. The defendant does not have to know that the act is criminal; it is sufficient that the act was done voluntarily. An act or omission of a required act must actually take place.
General Principles • 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.
Sarbanes-Oxley Reforms • Passed after the Enron-WorldCom debacles, called the White-Collar Crime Penalty Enhancement Act of 2002. • Substantially increases penalties for corporate crimes. • Mail and wire fraud penalties to 20 years.
White Collar Crimes Crimes that do not use (or threaten to use) force or violence or that do not cause injury to person(s) or physical damage to property. Credit Card Crimes Racketeering Counterfeiting Forgery Bribery Use of Mails to Defraud Perjury Extortion Criminal Libel False Claims Blackmail Embezzlement Obtaining Goods by False Pretenses Improper Political Influence Improper use of Interstate Commerce Bad Checks Improper Commercial Influence Securities Crimes Cheats and Swindles
Punishment • There is no uniform law of crimes. Each state and the federal government define and punish crimes as they choose. • Although the tendency is to follow a common pattern, many variations exist between the law of different states and federal law. • “Patriot Act” after 9-11 amends the Money Laundering Control Act and Bank Secrecy Act.
Computer Crimes • 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.
Computer Crimes • 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.
Penalties for Business Crimes Agency May complaint Maximum individual penalty Maximum corporate name penalty individual? Internal Revenue Service Yes Willful failure to pay, Willful failure to pay, $10,000/five years; willful $10,000, 50% assessment, failure to file, $25,000/one year; prosecution costs; willful fraud, $100,000/three years failure to file, $100,000; fraud, $500,000 Antitrust Division of the Yes $100,000, three years, or both $1 million, injunction, Justice Department divestiture Food and Drug Yes $1,000, one year, or both for $1,000 for first offense, Administration first offense; $10,000, three $10,000 thereafter; seizure of years, or both thereafter, illegal condemned products; illegal drug importation, $250,000/ten drug importation, $250,000 years Federal Trade Commission Yes Restitution, injunction Restitution, injunction, divestiture, $10,000 per day for violation of rules, orders Securities and Exchange Yes $10,000, five years, or both $2,000,000 (1933); $100,000, five years, or both (1934)
Penalties for Business Crime (cont’d) Agency Agency May complaint May complaint Maximum individual penalty Maximum individual penalty Maximum corporate Maximum corporate name name penalty penalty individual? individual? Equal Employment Equal Employment No No Injunction (some state liability Injunction (some state liability Injunction, back pay award, Injunction, back pay award, Opportunity Commission Opportunity Commission possible) possible) reinstatement reinstatement Office of Federal Contract Office of Federal Contract No No Suspension, cancellation of Suspension, cancellation of Compliance Programs Compliance Programs contract contract Environmental Protection Environmental Protection Yes Yes Medical waste, $50,000/two Medical waste, $50,000/two Medical waste, $1,000,000; Medical waste, $1,000,000; Agency Agency years; solid waste, years; solid waste, solid waste, $1,000,000; solid waste, $1,000,000; $250,000/two years; $50,000 $250,000/two years; $50,000 $50,000 per day of violation $50,000 per day of violation per day of violation penalty per day of violation penalty penalty penalty Occupational Safety and Occupational Safety and No No Willful, maximum of $70,000 Willful, maximum of $70,000 $70,000 $70,000 Health Administration Health Administration per violation; minimum of per violation; minimum of $5,000 per violation; death, $5,000 per violation; death, $10,000 and/or six months; $10,000 and/or six months; false reports, $10,000 and/or six false reports, $10,000 and/or six months; advance notice of months; advance notice of inspection, $1,000 and/or six inspection, $1,000 and/or six months months Consumer Product Safety Consumer Product Safety Yes Yes $50,000, one year, or both $50,000, one year, or both $500,000 (civil) $500,000 (civil) Commission Commission Fair Labor Standards Act Fair Labor Standards Act Yes Yes $10,000 per employee, six $10,000 per employee, six $100,000, reimbursement of $100,000, reimbursement of Department Department months, or both months, or both wages wages
Constitutional Amendments • 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.