Elements of a Crime
1. Wrongful behavior: actus reus (guilty act)
2. Wrongful state of mind: mens rea (guilty mind)
Actus reus
Latin for "guilty act": a wrongful behavior that is associated with the physical act of a declared crime
Mens rea
Latin for "guilty mind": the mental state accompanying a wrongful behavior
Wrongful states of mind
1. Purposeful
2. Knowing
3. Reckless
4. Negligent
Liability without fault / Strict liability
A legal term that imposes responsibility for damages regardless of the existence of negligence
Classification of Crimes
1. Felonies
2. Misdemeanors
3. Petty Offenses
Felony
A serious crime, such as murder, rape, or robbery, that is punishable by imprisonment for more than one year or by death
Misdemeanor
A crime that is less serious than a felony and is punishable by and fine and/or imprisonment for less than one year
Petty Offense
A minor crime that is punishable by a small fine and/or imprisonment for less than six months in jail
White-collar crime
A variety of nonviolent illegal acts against society that occur most frequently in the business context
Specific White-Collar Crimes
Bribery, Extortion, Fraud, Embezzlement, computer crimes
Ways to punish white-collar criminals
1. Fines
2. Incarceration
3. Community service
4. Disqualification from employment
5. House arrest
Bribery
A corrupt and illegal activity in which a person offers, gives, solicits, or receives money, services, or anything of value to gain an illicit advantage
Types (statutes) of Bribery
1. Bribery of a public official
2. Commercial bribery
3. Bribery of foreign officials
Extortion (blackmail)
A criminal offense in which a person obtains money, property, and/or services from another by wrongfully threatening or inflicting harm on the other's person, property, or reputation.
Fraud
An intentional deception that causes harm to another; encompasses a variety of means by which an individual intentionally uses some sort of misrepresentation to gain an advantage over another person
Elements of Fraud
1. a material false representation made with intent to deceive
2. a victim's reasonable reliance on the false representation
3. damages
Examples of Fraudulent Crimes
1. Forgery
2. Defalcation
3. False entries
4. False token
5. False pretense
6. Fraudulent concealment
7. Mail fraud
8. Heal care fraud
9. Telemarketing fraud
10. Ponzi scheme
11. Check kiting
12. Pretexting
Forgery
The fraudulent making or altering of any writing in a way that changes the legal rights and liabilities of another.
Defalcation
The misappropriation of trust funds or money held in a fiduciary capacity
False entries
The making of an entry into the books of a bank or corporation that is designed to represent the existence of funds that do not exist
False token
A false document or sign of existence used to perpetrate a fraud, such as making counterfeit money
False pretense
A designed misrepresentation of existing facts or conditions by which a person obtains another's money or goods, such as the writing of a worthless check
Fraudulent concealment
The suppression of a material fact that a person is legally bound to disclose
Mail fraud
The use of mails to defraud another person or the public
Health care fraud
Any fraudulent act committed in the provision of health care products or services
Telemarketing fraud
Any scheme, including cramming and slamming, using the telephone to commit a fraudulent act
Ponzi scheme
An investment swindle in which high profits are promised from fictitious sources and early investors are paid off with funds raised form later ones
Check kiting
Drawing checks on an account in one bank and depositing them in an account in a second bank when neither account has sufficient funds to cover the amounts drawn. Just before the checks are returned for payment to the first bank, the kiter covers them by d
Pretexting
Using fraudulent means to obtain information about someone's phone use
Insider trading
The illegal buying or selling of a corporation's stock or other securities by corporate insiders, such as officers and directors, in breach of a fiduciary duty or some other relationship of trust and confidence, while in possession of material, nonpublic
Red flags suggesting possible fraud
1. No independent proof of profitability
2. Control by a single person
3. No audited financial statements and no evidence of internal controls
4. Unusually high rates of return
5. New investors' reliance primarily on existing investors in deciding to inve
False assurances that an investment opportunity is not fraudulent
1. Long-time existence of investment opportunity
2. A list of names and addresses of satisfied investors you can contact
3. Membership int he better business bureau
4. A report of profitability from Dun & Bradstreet
5. Acceptance of money rolled over from
Embezzlement
A wrongful conversion of another's funds or property by one who is lawfully in possession of those funds or property
Computer crime
Crime committed using a computer
Refers broadly to any wrongful act that...
1. is direction against computers
2. uses computers to commit a crime
3. involves computers
Hacker
A person who illegally accesses, or enters, another person's or company's computer system to obtain information or steal money.
Cyber terrorist
A hacker whose intention is the exploitation of a target computer or network to create a serious impact, such as the crippling of a communications network or the sabotage of a business or organization, which may have an impact on millions of citizens if t
Virus
a computer program that rearranges, damages, destroys, or replaces computer data
Strict-liability offense
Offense for which no 'mens rea' is required
Responsible Corporate Officer Doctrine
In addition to corporations having criminal liability, corporate executives may also be personally liable for a business crime.
A court may assess criminal liability on a corporate executive or officer even if he/she did not engage in, direct, or know abo
Vicarious liability
The liability or responsibility imposed on a person, a party, or an organization for damages caused by another; most commonly used in relation to employment, with the employer held vicariously liable for the damages caused by its employees.
Arrest
The action in which a police officer or a person acting under the law takes a person into custody
Probable cause
Any essential element and/or standard by which a lawful officer may make a valid arrest, conduct a personal or property search, or obtain a warrant.
Miranda rights
The rights that are read to an arrested individual by a law enforcement agent before the individual is questioned about the commission of the crime.
Booking
After an individual is arrested, the procedure of recording the name of the defendant and the alleged crime in the investigating agency's or police department's records.
First appearance
The initial appearance of an arrested individual before a judge, who determines whether there was probable cause for the arrest. If the judge ascertains that probable cause did not exist, the individual is freed.
Bail
A thing of value, such as a money bail bond or any other form of property, that is given to the court to temporarily allow a person's release from jail and to ensure his or her appearance in court.
Information
A document, prepared by the prosecutor and presented to the magistrate, which demonstrates that there is enough evidence to charge the defendant and bring him or her to trial
Indictment
Finding by the grand jury that there is adequate evidence to charge the defendant and bring him or her to trial
Arraignment
The first appearance in court by the defendant, at which the defendant is advised of the pending charges, the right to counsel, and the right to trial by jury and he or she enters a plea to the charge.
Nolo contendere
A plea in which the defendant does not admit guilt but agrees not to contest the charges
Petit jury
A group of 6 or 12 citizens who are summoned to and sworn by the court to hear evidence presented by both sides and render a verdict in a trial
Plea bargain
An agreement in which the prosecutor agrees to reduce charges, drop charges, or recommend a certain sentence if the defendant pleads guilty
Bench trial
A trial before a judge, with the judgment decided by the judge rather than a jury; occurs when the defendant has waived his or her right to a jury trial.
Burden of proof
The duty of the plaintiff or prosecution to establish a claim or allegation by admissible evidence and to prove that the defendant committed all the essential elements of the crime to the jury's or court's satisfaction beyond any reasonable doubt, in orde
Affirmative defense
A reason the defendant, even though he/she committed the physical acts alleged by the prosecuted, should be excused from responsibility for those actions.
Affirmative Defenses to Crimes
1. Infancy
2. Mistake of fact
3. Intoxication
4. Insanity
5. Duress
6. Entrapment
7. Necessity
8. Justifiable use of force
Infancy
A person who is not yet a legal adult may use this defense to defuse the "guilty mind" requirement of a crime
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
Intoxication
The defendant says he or she took an intoxicant without awareness of its likely effect, mistook its identity, or took the intoxicant under force
Insanity
The defendant had a severe mental illness that substantially impaired the defendant's capacity to understand and appreciate the moral wrongfulness of the act
Duress
The defendant says he or she was forced to perform an act against his or her will
Entrapment
The defendant would not have committed the crime or broken the law if not induced or tricked into doing so by law enforcement officers
Necessity
The defendant was acting to prevent imminent harm, and there was no legal alternative to the action he or she took
Justifiable use of force
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 a forcible felony
Steps in a Criminal Procedure
1. Arrest
2. Booking
3. First Appearance
4. Information (for misdemeanor) / Indictment by a Grand Jury (for felony)
5. Arraignment
6. Trial
7. Appeal
Federal laws which attempt to prevent white-collar crime
1. RICO
2. False Claims Act
3. Sarbanes-Oxley Act
RICO Act
Racketeer Influenced and Corrupt Organizations Act; A US law that provides extended penalties for criminal acts performed as part of an ongoing criminal organization; Title IX of the Organized Crime Control Act of 1970
False Claims Act
An act that allows employees to sue employers on behalf of the federal government for fraud against the government. The employee retains a share of the recovery as a reward for his or her efforts.
Sarbanes-Oxley Act
An act that criminalizes specific non-audit services when provided by a registered accounting firm to an audit client; also increases the punishment for a number of white-collar offenses; "Public Company Accounting Reform and Investor Protection Act of 20