copyright © 2006 west legal studies in business, a part of the thomson corporation. thomson, the...

COPYRIGHT © 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson, the Star logo, and West Legal Studies in Business are trademarks used herein under license.

West’s Business Law 10th Edition

Kenneth W. Clarkson, University of MiamiRoger LeRoy Miller, Institute for University Studies, Arlington, Texas

Gaylord A. Jentz, University of Texas, Austin, EmeritusFrank B. Cross, University of Texas, Austin

CHAPTER 9CHAPTER 9Criminal Law and Cyber CrimesCriminal Law and Cyber Crimes

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COPYRIGHT © 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson, the Star logo, and West Legal Studies in Business are trademarks used herein under license. 2

§1: §1: Civil and Criminal LawCivil and Criminal Law

Major differences:Major differences:Major differences:Major differences:

Civil (Tort)Civil (Tort) CriminalCriminalPreponderancePreponderance Beyond Reasonable Beyond Reasonable

DoubtDoubtDamagesDamages Jail or PrisonJail or PrisonPrivate (parties hire their Private (parties hire their own attorneys)own attorneys)

Public (Prosecutor Public (Prosecutor represents community)represents community)May be liable for civil May be liable for civil damagesdamages


FeloniesFelonies MisdemeanorsMisdemeanors

Serious crimes, Serious crimes, punishable by Death or punishable by Death or prison for more than one prison for more than one (1) year.(1) year.

Non-serious (petty) Non-serious (petty) crimes punishable by jail crimes punishable by jail for less than one(1) year for less than one(1) year and/or by fines. and/or by fines.

§2: §2: Classification of CrimesClassification of Crimes

An act can have both civil and criminal An act can have both civil and criminal consequences. (O.J. Simpson trials)consequences. (O.J. Simpson trials)

An act can have both civil and criminal An act can have both civil and criminal consequences. (O.J. Simpson trials)consequences. (O.J. Simpson trials)


§3: The §3: The Essentials of Essentials of Criminal LiabilityCriminal Liability

To be convicted of a crime, a person must:To be convicted of a crime, a person must: Commit a guilty act (Commit a guilty act (actus reusactus reus).). Have the guilty mind (Have the guilty mind (mens reamens rea) during ) during

commission of the guilty act.commission of the guilty act.

To be convicted of a crime, a person must:To be convicted of a crime, a person must: Commit a guilty act (Commit a guilty act (actus reusactus reus).). Have the guilty mind (Have the guilty mind (mens reamens rea) during ) during

commission of the guilty act.commission of the guilty act.


§4: §4: Corporate Criminal LiabilityCorporate Criminal Liability

A corporation is creature of state statute. A corporation is creature of state statute. A corporate entity may be convicted of a crime.A corporate entity may be convicted of a crime.Punishment would be fines and/or denial of Punishment would be fines and/or denial of

certain legal privileges. certain legal privileges.

A corporation is creature of state statute. A corporation is creature of state statute. A corporate entity may be convicted of a crime.A corporate entity may be convicted of a crime.Punishment would be fines and/or denial of Punishment would be fines and/or denial of

certain legal privileges. certain legal privileges.


Liability of the Corporate EntityLiability of the Corporate Entity

Corporations may be convicted of criminal Corporations may be convicted of criminal activity if:activity if: Crime is within agent/employee’s scope of Crime is within agent/employee’s scope of

employment;employment; Corporation fails to perform a legally required duty; Corporation fails to perform a legally required duty;

oror Crime authorized or requested by corporate Crime authorized or requested by corporate

principal/officer.principal/officer.

Corporations may be convicted of criminal Corporations may be convicted of criminal activity if:activity if: Crime is within agent/employee’s scope of Crime is within agent/employee’s scope of

employment;employment; Corporation fails to perform a legally required duty; Corporation fails to perform a legally required duty;

oror Crime authorized or requested by corporate Crime authorized or requested by corporate

principal/officer.principal/officer.


Liability of Corporate Officers Liability of Corporate Officers and Directorsand Directors

Corporate officers and directors are personally Corporate officers and directors are personally liable for crimes they commit.liable for crimes they commit.

Also, they may be criminally liable for acts of Also, they may be criminally liable for acts of their under the “Responsible Corporate Officer” their under the “Responsible Corporate Officer” doctrine. doctrine. U.S. v. ParkU.S. v. Park (1975). (1975).

Corporate officers and directors are personally Corporate officers and directors are personally liable for crimes they commit.liable for crimes they commit.

Also, they may be criminally liable for acts of Also, they may be criminally liable for acts of their under the “Responsible Corporate Officer” their under the “Responsible Corporate Officer” doctrine. doctrine. U.S. v. ParkU.S. v. Park (1975). (1975).


§5: §5: Types of CrimesTypes of Crimes

Violent Crimes.Violent Crimes. Murder, sexual assault, rape, robbery.Murder, sexual assault, rape, robbery.

Property Crimes.Property Crimes. Burglary, larceny, theft of trade secrets, theft of Burglary, larceny, theft of trade secrets, theft of

services, arson, receipt of stolen goods, forgery.services, arson, receipt of stolen goods, forgery.

Violent Crimes.Violent Crimes. Murder, sexual assault, rape, robbery.Murder, sexual assault, rape, robbery.

Property Crimes.Property Crimes. Burglary, larceny, theft of trade secrets, theft of Burglary, larceny, theft of trade secrets, theft of

services, arson, receipt of stolen goods, forgery.services, arson, receipt of stolen goods, forgery.


““White Collar” CrimesWhite Collar” Crimes Crimes occurring in the business context Crimes occurring in the business context

using non-violent means to obtain personal or using non-violent means to obtain personal or business advantage.business advantage. Embezzlement.Embezzlement. Mail or Wire Fraud (federal).Mail or Wire Fraud (federal). Bribery.Bribery. Bankruptcy Fraud (federal).Bankruptcy Fraud (federal). Insider Trading (federal).Insider Trading (federal). Theft of Trade Secrets (federal).Theft of Trade Secrets (federal).

Crimes occurring in the business context Crimes occurring in the business context using non-violent means to obtain personal or using non-violent means to obtain personal or business advantage.business advantage. Embezzlement.Embezzlement. Mail or Wire Fraud (federal).Mail or Wire Fraud (federal). Bribery.Bribery. Bankruptcy Fraud (federal).Bankruptcy Fraud (federal). Insider Trading (federal).Insider Trading (federal). Theft of Trade Secrets (federal).Theft of Trade Secrets (federal).


Organized CrimeOrganized Crime

Operates illegitimately by providing illegal Operates illegitimately by providing illegal goods and services:goods and services: Money Laundering.Money Laundering. RICO(criminal and civil liability).RICO(criminal and civil liability).

Operates illegitimately by providing illegal Operates illegitimately by providing illegal goods and services:goods and services: Money Laundering.Money Laundering. RICO(criminal and civil liability).RICO(criminal and civil liability).


§6: §6: Defenses to Criminal LiabilityDefenses to Criminal LiabilityInfancy (juvenile).Infancy (juvenile).Involuntary Intoxication: is a defense if Involuntary Intoxication: is a defense if

person was incapable of understanding act.person was incapable of understanding act.Insanity: defendant lacked substantial Insanity: defendant lacked substantial

capacity to appreciate the wrongfulness of capacity to appreciate the wrongfulness of act or to conform act to law.act or to conform act to law.

Mistake.Mistake.Duress.Duress.Consent. Consent.

Infancy (juvenile).Infancy (juvenile).Involuntary Intoxication: is a defense if Involuntary Intoxication: is a defense if

person was incapable of understanding act.person was incapable of understanding act.Insanity: defendant lacked substantial Insanity: defendant lacked substantial

capacity to appreciate the wrongfulness of capacity to appreciate the wrongfulness of act or to conform act to law.act or to conform act to law.

Mistake.Mistake.Duress.Duress.Consent. Consent.


DefensesDefenses

Self-Defense of People and Property: use deadly Self-Defense of People and Property: use deadly force if reasonable belief of imminent death or force if reasonable belief of imminent death or serious injury; cannot use deadly force to protect serious injury; cannot use deadly force to protect property alone. property alone.

Necessity: criminal act necessary to prevent Necessity: criminal act necessary to prevent greater harm.greater harm.

Self-Defense of People and Property: use deadly Self-Defense of People and Property: use deadly force if reasonable belief of imminent death or force if reasonable belief of imminent death or serious injury; cannot use deadly force to protect serious injury; cannot use deadly force to protect property alone. property alone.

Necessity: criminal act necessary to prevent Necessity: criminal act necessary to prevent greater harm.greater harm.


DefensesDefenses

Entrapment: prevents government from Entrapment: prevents government from encouraging crimes. Key issue: was the encouraging crimes. Key issue: was the defendant pre-disposed to commit the act?defendant pre-disposed to commit the act?

Statute of Limitations.Statute of Limitations.Immunity.Immunity.

Entrapment: prevents government from Entrapment: prevents government from encouraging crimes. Key issue: was the encouraging crimes. Key issue: was the defendant pre-disposed to commit the act?defendant pre-disposed to commit the act?

Statute of Limitations.Statute of Limitations.Immunity.Immunity.


§7: §7: Criminal ProceduresCriminal Procedures

U.S. Constitution provides specific safeguards U.S. Constitution provides specific safeguards for those accused of crimes at federal and state for those accused of crimes at federal and state level.level.

Criminal procedures are designed to protect Criminal procedures are designed to protect against the arbitrary use of power by the against the arbitrary use of power by the government.government.

U.S. Constitution provides specific safeguards U.S. Constitution provides specific safeguards for those accused of crimes at federal and state for those accused of crimes at federal and state level.level.

Criminal procedures are designed to protect Criminal procedures are designed to protect against the arbitrary use of power by the against the arbitrary use of power by the government.government.


Fourth AmendmentFourth Amendment

The Fourth Amendment protects against The Fourth Amendment protects against unreasonable search and seizures.unreasonable search and seizures.

No warrant for search or arrest can issue without No warrant for search or arrest can issue without probable cause.probable cause.

The Fourth Amendment protects against The Fourth Amendment protects against unreasonable search and seizures.unreasonable search and seizures.

No warrant for search or arrest can issue without No warrant for search or arrest can issue without probable cause.probable cause.


Exclusionary RuleExclusionary Rule

Evidence obtained in violation of Constitutional Evidence obtained in violation of Constitutional amendments is excluded from trial. amendments is excluded from trial. Case 9.1: Case 9.1: Fellers v. United StatesFellers v. United States (2004). (2004).

Purpose is to deter police from warrantless Purpose is to deter police from warrantless searches, seizures and misconduct.searches, seizures and misconduct.

““Inevitability” and “good faith” are exceptions to Inevitability” and “good faith” are exceptions to the rule.the rule.

Evidence obtained in violation of Constitutional Evidence obtained in violation of Constitutional amendments is excluded from trial. amendments is excluded from trial. Case 9.1: Case 9.1: Fellers v. United StatesFellers v. United States (2004). (2004).

Purpose is to deter police from warrantless Purpose is to deter police from warrantless searches, seizures and misconduct.searches, seizures and misconduct.

““Inevitability” and “good faith” are exceptions to Inevitability” and “good faith” are exceptions to the rule.the rule.


The “Miranda” RuleThe “Miranda” Rule

Case 9.2:Case 9.2: Miranda v. ArizonaMiranda v. Arizona (1966) (1966) required required police to inform suspects of their constitutional police to inform suspects of their constitutional rights.rights.

The Supreme Court upheld The Supreme Court upheld MirandaMiranda in in Dickerson v. U.S.Dickerson v. U.S. (2000). (2000).

Case 9.2:Case 9.2: Miranda v. ArizonaMiranda v. Arizona (1966) (1966) required required police to inform suspects of their constitutional police to inform suspects of their constitutional rights.rights.

The Supreme Court upheld The Supreme Court upheld MirandaMiranda in in Dickerson v. U.S.Dickerson v. U.S. (2000). (2000).


Criminal Criminal ProcessProcess

Grand Jury D.A's Office

Plea BargainChange of Plea to Guilty

TrialProsecutor must prove

guilt beyond reasonable doubt

Sentencing

Arraignment

Preliminary Hearing(Determines Probable Cause)

Initial Appearance(Before Judge)

Arrest(Requires Probable Cause)


Criminal ProcessCriminal Process

Is a defendant’s right to cross-examine a witness Is a defendant’s right to cross-examine a witness violated by two-way videoconferencing? violated by two-way videoconferencing? Case 9.3: Case 9.3: United States v. YatesUnited States v. Yates (2004). (2004).

Federal Sentencing Guidelines.Federal Sentencing Guidelines. 1984: Sentencing Reform Act.1984: Sentencing Reform Act. 2005: Supreme Court ruled some provisions of this 2005: Supreme Court ruled some provisions of this

Act were unconstitutional.Act were unconstitutional.

Is a defendant’s right to cross-examine a witness Is a defendant’s right to cross-examine a witness violated by two-way videoconferencing? violated by two-way videoconferencing? Case 9.3: Case 9.3: United States v. YatesUnited States v. Yates (2004). (2004).

Federal Sentencing Guidelines.Federal Sentencing Guidelines. 1984: Sentencing Reform Act.1984: Sentencing Reform Act. 2005: Supreme Court ruled some provisions of this 2005: Supreme Court ruled some provisions of this

Act were unconstitutional.Act were unconstitutional.


§8: Cyber Crimes§8: Cyber CrimesComputer crime: any act directed against Computer crime: any act directed against

computers or that uses computers as an computers or that uses computers as an instrumentality of a crime.instrumentality of a crime. Cyber Theft.Cyber Theft. Financial Crimes.Financial Crimes. Identity Theft.Identity Theft. Cyber Stalking.Cyber Stalking. Hacking and Cyber Terrorism.Hacking and Cyber Terrorism.

Computer Fraud and Abuse Act (1996).Computer Fraud and Abuse Act (1996).

Computer crime: any act directed against Computer crime: any act directed against computers or that uses computers as an computers or that uses computers as an instrumentality of a crime.instrumentality of a crime. Cyber Theft.Cyber Theft. Financial Crimes.Financial Crimes. Identity Theft.Identity Theft. Cyber Stalking.Cyber Stalking. Hacking and Cyber Terrorism.Hacking and Cyber Terrorism.

Computer Fraud and Abuse Act (1996).Computer Fraud and Abuse Act (1996).

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