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Chapter 6

CRIME Suggested Additional Assignments Action Learning Students should draft a statute that focuses on corporate crime. Students must select one area of law, such as the environment, employee safety, equal employment opportunity, or some other. They must then isolate a type of conduct that they think deserves criminal liability; describe the acts with as much detail as possible, and provide penalties.

Research Students should find a newspaper or magazine article involving corporate crime. How do the students feel about the conduct alleged (or proven)? Are the penalties too harsh, or too weak? In their view, how should the law deal with the defendants’ conduct? Students should be cautioned to look at the legal issues, and avoid emotionally driven arguments as much as possible. Student analysis should include reference to the Master ethics Checklist collaboratively formulated in Lesson 2 as a basis for their argument.

Class Collaboration: Case Project Students should be divided into two teams, one of which will be the Middleton Case team and the other, the Jacobsen Team. Each team will read the case opinion, briefly summarize the facts and prepare a presentation for the class which includes the case holding, the point of law determined by the case holding, and then analyze the impact of the holding on criminal law. They should research any exceptions to the rule of law, and briefly explain what standard is used for establishing an exception. Finally, they should present the collective positions for and against the rigorous enforcement of the rule, and support each position. (This assignment can readily be adapted to a Read and Write assignment).

Action Learning: Topic Debate The class should be divided into two teams, and asked to read the Miranda case decisions, as well as case decisions following in the Miranda line in which exceptions are carved out. One team will represent the proponents of Miranda as articulated by the Court, and the other will be opposed. Each team is to prepare a briefly position paper which will be presented in debate format with the instructor as moderator. In addition to the points raised in the opinion, students should be asked to consider constitutional compliance, and possible restrictions they would like to see removed, if appropriate. The debate should be preceded by a brief summary of the case facts, with each side presenting the facts as would be appropriate for the prosecution and the defense position. Students should incorporate reference to the British system and differences with our model, as articulated in both the Constitution and Miranda. The instructor on the basis of persuasiveness of the arguments presented and adequacy of support for points of argument from case opinions, statutory or constitutional sources, will select the winner.

Chapter Overview Chapter Theme Crime comes in many forms, and the culprits can surprise us.

Quotes of the Day “He threatens many that hath injured one.” –Ben Jonson (1573 1637), English dramatist, Silius, in Fall of Sejanus, act II. “Most of the evils of life arise from man’s being unable to sit still in a room.” –Blaise Pascal (1623 1662), French scientist and religious essayist.

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A Civil Case versus a Criminal Case Civil law involves the rights and liabilities that exist between private parties. If one person claims that another has caused her a civil injury, she must file a lawsuit and convince a court of her damages.

Conduct falls under criminal law when society outlaws it. When a state legislature or Congress concludes that certain behavior threatens the population generally, it passes a statute forbidding that behavior.

Prosecution Only the government can prosecute a crime and punish the perpetrator by sending him to prison. The government may also impose a fine, but it keeps the fine and does not share it with the victim.

Burden of Proof In a civil case, the plaintiff must prove her case only by a preponderance of the evidence. But because the penalties for conviction in a criminal case are so serious, the government must prove its case beyond a reasonable doubt.

Right to a Jury A judge or jury decides the facts of a case. A criminal defendant has a right to a trial by jury for any charge that could result in a sentence of six months or longer. The defendant may demand a jury trial or may waive that right, in which case the judge will be the fact finder.

Felony/Misdemeanor A felony is a serious crime, for which a defendant can be sentenced to one year or more in prison.

Murder, robbery, rape, drug dealing, money laundering, wire fraud, and embezzlement are felonies. A misdemeanor is a less serious crime, often punishable by a year or less in a county jail. Public drunkenness, driving without a license, and simple possession of one marijuana cigarette are considered misdemeanors in most states.

Criminal Procedure State of Mind Voluntary Act A defendant is not guilty of a crime if she was forced to commit it. In other words, she is not guilty if she acted under duress.

Entrapment When the government induces the defendant to break the law, the prosecution must prove beyond a reasonable doubt that the defendant was predisposed to commit the crime.

Conspiracy If the police discover a plot to commit a crime, they can arrest the defendants before any harm has been done. A defendant can be convicted of taking part in a conspiracy if: • a conspiracy existed, • the defendants knew about it, and • some members of the conspiracy voluntarily took a step toward implementing it.

Gathering Evidence: The Fourth Amendment The Fourth Amendment to the Constitution prohibits the government from making illegal searches and seizures of individuals, corporations, partnerships, and other organizations. The goal of the Fourth Amendment is to protect the individual from the powerful state.

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Warrant As a general rule, the police must obtain a warrant before conducting a search. The warrant must specify with reasonable certainty the place to be searched and the items to be seized.

Probable Cause The magistrate will issue a warrant only if there is probable cause. Probable cause means that, based on all of the information presented, it is likely that evidence of a crime will be found in the place to be searched.

Searches without a Warrant There are seven circumstances under which police may search without a warrant: • Plain View.

• Stop and Frisk.

• Emergencies.

• Automobiles.

• Lawful Arrest.

• Consent.

• No Expectation of Privacy.

Technology and social media have created new challenges for the courts in determining what is a reasonable expectation of privacy. Police do need a warrant to: • Search the digital contents of your cellphone or personal computer.

• Intercept email in transit.

• Read private Facebook profiles and postings.

• Attach a GPS tracking device to your car.

Police do not need a warrant to: • Perform a DNA test on anyone they have arrested for a serious crime.

• Find out whom you have emailed.

• Find out what websites you have visited.

• Search your online chat messages.

• Check your online dating profiles.

• Read your Twitter posts.

Exclusionary Rule Under the exclusionary rule, evidence obtained illegally (or any information obtained as a result of this illegal behavior) may not be used at trial.

Question: How can it possibly make sense to exclude legitimate evidence, because a police officer made some technical mistake? Aren’t we letting the criminal go free because the constable blundered?

Answer: The Supreme Court has created the exclusionary rule as a judicial remedy to protect all citizens from potential police abuse. The theory is that if the police know in advance that illegally seized evidence cannot be used at trial, they will have no motive to obtain such evidence, and will go about their investigations lawfully. Remember also that some “technical” mistakes might be quite invasive, such as the police breaking down a door at night, entering an apartment, strip searching all residents, tearing up the premises, and then realizing that no crimes had been committed and that they had acted on a worthless tip.

Question: Does the Supreme Court think that all cops want to abuse the average citizen?

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Unit 1 The Legal Environment

Answer: No. What the court has said, by crafting the rule, is that one of the most valuable things there is about living in a democratic society is the ability to live without fearing the police. We should be able to sleep at night without worrying that our doors will be smashed in.

Question: The difference between a lawful search (or arrest) and an unlawful one is often a warrant.

What is so special about a warrant?

Answer. The warrant requirement means that the police must obtain the permission of a neutral person before conducting most searches or making most arrests. Because the police are charged with responsibility to investigate crimes, they may have a vested interest in conducting investigations as aggressively as possible. The warrant requirement means that someone who has no personal interest in the investigation must first be convinced that there is probable cause to search some premises or make an arrest.

Question: What might happen if there was no requirement for probable cause?

Answer: For example, police might reason that a certain percentage of students at a large university use illegal drugs, and that therefore it would be profitable to stake out the campus and search everyone who enters it. Even if only a tiny percentage of students are carrying drugs, it might prove a good way to catch criminals. The problem is, that all of the innocent people would be forced to endure periodic searches.

Question: What is wrong with being searched if you do not have anything to hide?

Answer: It is not pleasant to be searched. Some people might not mind it, but there are many who do not want to feel that they live in a police state. In addition, to allow police to search without a warrant is to give them tremendous power, which some officers might abuse. For example, a particular policeman might choose to search only minorities, or women, or students, or those living in a particular neighborhood. Ours is supposed to be a society regulated by law, not by personal, police power.

Question: How many people go free because of the exclusionary rule?

Answer: Not many. As the text reports, most studies have shown that less than 1 percent of those prosecuted go free because evidence is excluded. Courts deny the great majority of motions to suppress, and in those few cases where they are allowed, the prosecution generally has additional evidence sufficient to convict.

After Arrest Indictment The grand jury—a group of ordinary citizens—determines whether there is probable cause that this defendant committed the crime with which she is charged. If the grand jury determines that there is probably cause, an indictment issues. An indictment is the government’s formal charge that the defendant has committed a crime and must stand trial. Because the grand jury never hears the defendant’s evidence, it is relatively easy for prosecutors to obtain an indictment.

Arraignment At an arraignment a clerk reads the formal charges of the indictment. The defendant must enter a plea to the charges. At this stage, most defendants plead not guilty.

Plea Bargaining A plea bargain is an agreement between prosecution and defense that the defendant will plead guilty to a reduced charge, and the prosecution will recommend to the judge a relatively lenient sentence. In the federal court system, about 97% of all prosecutions end in a plea bargain. Such a high percentage has led

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to some concern that innocent people may be pleading guilty to avoid the risk of tough mandatory sentences. A judge need not accept the bargain, but usually does.

Discovery If the defendant does not plead guilty, the prosecution is obligated to hand over any evidence favorable to the defense that the defense attorney requests. The defense has a more limited obligation to inform the prosecution.

Trial and Appeal When there is no plea bargain, the case must go to trial. The mechanics of a criminal trial and appeal are similar to those for a civil trial, described in Chapter 6, on dispute resolution.

Double Jeopardy The prohibition against double jeopardy means that a defendant may be prosecuted only once for a particular criminal offense. The purpose is to prevent the government from destroying the lives of innocent citizens with repetitive prosecutions.

Question: What does double jeopardy mean?

Answer: A criminal defendant may be prosecuted only once for a criminal offense.

Question: I recall reading about cases where people were prosecuted by a state and by the federal government for the same offense. Why doesn’t that violate double jeopardy?

Answer: To qualify as double jeopardy a second prosecution must be done by the same sovereign that prosecuted the first. There is no prohibition against a different sovereign prosecuting the same defendant, based on the same incident. In the Rodney King trials in Los Angeles, the police officers were first charged by the state of California. Their acquittal led to the 1992 Los Angeles riots. The United States then prosecuted the officers for civil rights violations and obtained convictions against two. Because the United States is a different sovereign from California, there was no double jeopardy problem.

Question: Is that fair?

Answer: Some argue that it is not fair; it is, however, legal.

Question: O. J. Simpson was acquitted after the most highly publicized trial in history, yet he was then sued by the families of the victims. Didn’t that violate double jeopardy?

Answer: No. The families filed a civil lawsuit. That is not a criminal prosecution and there is no double jeopardy issue.

The Fifth Amendment: Self-Incrimination The Fifth Amendment bars the government from forcing any person to testify against himself. In other words, the police may not use mental or physical coercion to force a confession or any other information out of someone.

Miranda Rights The police cannot legally force a suspect to provide evidence against himself. But sometimes, under forceful interrogation, he might forget his constitutional rights. In the following landmark case, the Supreme Court established the requirement that police remind suspects of their rights – the very same ones that we have all heard so many times on television shows.

Landmark: Miranda v. Arizona1 Facts: Ernesto Miranda was a mentally ill, indigent citizen of Mexico. The Phoenix police arrested him at his home and brought him to a police station, where a rape victim identified him as her assailant. Two 1

384 U.S. 436; 1966 U.S. LEXIS 2817 SUPREME COURT OF THE UNITED STATES, 1966

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Unit 1 The Legal Environment

police officers took him to an interrogation room but did not tell him that he had a right to have a lawyer present during the questioning. Two hours later, the officers emerged with a written confession signed by Miranda. At the top of the statement was a typed paragraph stating that the confession was made voluntarily “with full knowledge of my legal rights, understanding any statement I make may be used against me.”

At Miranda’s trial, the judge admitted this written confession into evidence over the objection of defense counsel. The officers testified that Miranda had also made an oral confession during the interrogation.

The jury found Miranda guilty of kidnapping and rape. He was sentenced to 20 to 30 years’ imprisonment. On appeal, the Supreme Court of Arizona affirmed the conviction. In reaching its decision, the court relied heavily on the fact that Miranda did not specifically request a lawyer. The Supreme Court of the United States granted certiorari.

Issues: Was Miranda’s confession admissible at trial? Should his conviction be upheld?

Decision: Neither his written nor his oral confession was admissible, His conviction was overturned.

Reasoning: To maintain a fair balance between state power and individual rights, to respect human dignity, our system of criminal justice demands that the government seeking to punish an individual produce the evidence against him by its own independent labors, rather than by the cruel, simple expedient of compelling it from his own mouth.

Therefore, once the police take a suspect into custody or otherwise deprive him of his freedom, they are required to protect his constitutional right to avoid self-incrimination. To do so, they must warn him that he has a right to remain silent, that any statement he does make may be used as evidence against him, and that he has a right to the presence of an attorney, either retained or appointed. If the police do not inform the accused of these rights, then nothing he says or writes can be admitted in court.

The defendant may waive these rights, provided the waiver is made voluntarily, knowingly, and intelligently. If, however, he indicates in any manner and at any stage of the process that he does not want to be interrogated or wishes to consult with an attorney before speaking, then the police cannot question him. The mere fact that he may have answered some questions or volunteered some statements on his own does not deprive him of the right to refrain from answering any further inquiries until he has consulted with an attorney.

Question: What happened to Miranda after the Supreme Court ruling?

Answer: He was retried without the confession but due to witness testimony and other evidence, he was convicted and sentenced to serve 20 – 30 years in prison. He was paroled in 1972.

Question: What was Miranda’s life after parole?

Answer: He autographed “Miranda cards” and was stabbed to death in an argument in a bar in January 1976.

Right to a Lawyer As Miranda made clear, a criminal defendant has the right to a lawyer before being interrogated by the police. The Sixth Amendment guarantees the right to a lawyer at all important stages of the criminal process. Because of this right, the government must appoint a lawyer to represent, free of charge, any defendant who cannot afford one.

Crimes That Harm Business (And Their Customers) Businesses must deal with four major crimes: larceny, fraud, arson, and embezzlement.

Larceny is the trespassory taking of personal property with the intent to steal.

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Fraud refers to a variety of crimes, all of which involve the deception of another person for the purpose of obtaining money or property. Types of fraud include wire and mail fraud, insurance fraud, Internet fraud, auctions, identity theft, and phishing.

Arson is the malicious use of fire or explosives to damage or destroy real estate or personal property.

Embezzlement is the fraudulent conversion of property already in the defendant’s possession.

Hacking is the gaining of unauthorized access to a computer system. Hacking is a crime under the federal Computer Fraud and Abuse Act of 1986 (CFAA).2 Courts are now in the process of figuring out how to interpret the CFAA. In the following case, a former employee clearly violated his company’s policies, but did he commit a crime? You be the judge.

You Be The Judge: United States v, Nosal3 Facts: David Nosal worked for an executive search firm, Korn/Ferry (K/F). Shortly after he left the company to start a competing business, he convinced some of his former colleagues to log into the company’s confidential database and give him customer names and contact information. K/F had authorized the employees to access the database, but not to disclose confidential client information to outsiders.

The government charged Nosal with aiding and abetting his former colleagues in violating a provision of the CFAA that prohibits employees from exceeding their authorized access to a computer with intent to defraud. The trial court granted Nosal’s motion to dismiss. The government appealed.

You Be the Judge: Did Nosal commit a crime when he aided and abetted others in violating a workplace policy on computer use?

Argument for the Defendant: This provision of the CFAA can mean one of two things: (1) either it is a crime to access unauthorized data or, (2) in a more expansive view, it can apply to anyone who is legally entitled to access data, but who then uses this data in an unauthorized manner. That is what happened here. The K/F employees were authorized to access the confidential database, but they were not permitted to send it to Nosal.

Congress enacted the CFAA primarily to address the growing problem of computer hacking, i.e., “intentionally trespassing into someone else’s computer files.” But, under the government’s view, everyone who uses a computer in violation of company policy, which may well include everyone who uses a computer, would be a criminal. According to the government, if an employer keeps certain information in a separate database that can be viewed on a computer screen, but not copied or downloaded and an employee copies the information to a thumb drive, he could be charged with a crime.

The computer gives employees new ways to procrastinate, by g-chatting with friends, playing games, shopping or watching sports highlights. Such activities are routinely prohibited by many computer-use policies. Under the broad interpretation of the CFAA, such minor violations would become federal crimes. While it is unlikely that you will be prosecuted for watching cat videos on your work computer, you could be. How will an employee know the difference between a minor personal use and a criminal act?

Employees who call family members from their work phones will become criminals if they send an email instead. They can read the sports section of USA Today at work, but they’d better not visit ESPN.com.

And Sudoku enthusiasts should stick to printed puzzles, because visiting www.dailysudoku.com from their work computers might give them more than enough time to hone their Sudoku skills behind bars.

Facebook prohibits its users from sharing login information. Are we going to cart every violator off to prison? The terms of service on dating websites prohibit inaccurate or misleading information. If you 2

18 U.S.C. Section 1030.

3

676 F.3d 854 United States Court of Appeals for the Ninth Circuit, 2012.

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Unit 1 The Legal Environment

describe yourself as “tall, dark and handsome,” when you are actually short and homely, could you end up wearing a handsome orange prison jumpsuit?

Argument for the Government: This statute explicitly requires an intent to commit fraud. Therefore, it has nothing to do with reading ESPN.com, playing Sudoku, checking email, or fibbing on dating sites.

Instead, the K/F employees knowingly exceeded their access to a protected company computer and they did so with an intent to defraud.

This distinction is not complicated. A bank teller is entitled to access money for legitimate banking purposes, but not to take the bank’s money for himself. A new car buyer may be entitled to take a vehicle around the block on a test drive but not to drive it to Mexico on a drug run.

Holding: Judgment for Nosal.

Question: What does CFAA stand for?

Answer: The Computer Fraud and Abuse Act. Question: What is hacking?

Answer: The gaining of unauthorized access to a computer system.

Crimes Committed by Business A corporation can be found guilty of a crime based on the conduct of any of its agents, who include anyone undertaking work on behalf of the corporation. An agent can be a corporate officer, an accountant hired to audit a statement, a sales clerk, or almost any other person performing a job at the company’s request.

If an agent commits a criminal act within the scope of his employment and with the intent to benefit the corporation, the company is liable. This means that the agent himself must first be guilty.

Making False Statements It is illegal to make false statements or engage in a cover up during any dealings with the United States government.

RICO The Racketeer Influenced and Corrupt Organizations Act (RICO) is one of the most powerful and controversial statutes ever written. Congress passed the law primarily to prevent gangsters from taking money they earned illegally and investing it in legitimate businesses.

What does that mean in English? It is a two-step process to prove that a person or an organization has violated RICO. • The prosecutor must show that the defendant committed two or more racketeering acts, which are any of a long list of specified crimes: embezzlement, arson, mail fraud, wire fraud, and so forth. Thus, if a gangster ordered a building torched in January and then burned a second building in October, that would be two racketeering acts. If a stockbroker told two customers that Bronx Gold Mines was a promising stock, when she knew that it was worthless, that would be two racketeering acts.

• The prosecutor must then show that the defendant used these racketeering acts to accomplish one of the three purposes listed above. If the gangster committed two arsons and then used the insurance payments to buy a dry cleaning business, that would violate RICO. If the stockbroker gave fraudulent advice and used the commissions to buy advertising for her firm, that would violate RICO. Money Laundering Money laundering consists of taking the proceeds of certain criminal acts and either (1) using the money to promote crime, or (2) attempting to conceal the source of the money.

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Money Laundering Cases and Prosecutorial Ethics Federal prosecutors have sharply increased the number of people they charge with money laundering.

Because more people are funneling drug money out of the country? Not necessarily, argue defense lawyers. They say that prosecutors are now routinely adding on money laundering charges to cases that used to be routine fraud cases. For example, a medical supply company bills the federal government for prosthetic devices that it never delivered. Formerly, that would have been a simple Medicare fraud case.

Today, though, it is likely to be a Medicare fraud and money laundering case. Prosecutors in such a case argue that the money obtained illegally from the federal government is used to invest in and maintain a legitimate business, and that is money laundering. If the medical supply company uses money obtained from fraudulent bills to pay the rent on its company headquarters, it has laundered the money.

What is the big deal? Time in prison. A simple fraud conviction typically results in a sentence of five years or less; a money laundering conviction can increase the penalty to 20 years in prison. In addition, a prosecutor who tacks on a money laundering charge puts extra pressure on the defendant to plea bargain, because the penalty for a conviction could be so high.

Defense lawyers claim that this practice is unethical, in that Congress intended stiff money laundering penalties for big-time drug dealers who gravely damage our country by importing harmful substances. A small business dealer who cheats once or twice should not be treated like a drug kingpin. Prosecutors respond that they are ethically required to charge the most serious provable crime, and that Congress wrote the money laundering statute broadly in order to discourage all fraud, not just drug-related offenses.

Hiring Illegal Workers Employers are required to verify their workers’ eligibility for employment in the United States.

Foreign Corrupt Practices Act Under the Foreign Corrupt Practices Act (FCPA), it is illegal for any employee or agent of a U.S. company (and some foreign companies) to give anything of value to any foreign official for purposes of influencing an official decision (unless the payment was merely intended to facilitate a routine governmental action.)

Additional Case: United States v. Kennard4 Facts: The reverend Abraham Kennard bilked hundreds of churches out of millions of dollars through a phony grant scheme. Abraham created the Network International Investment Corporation and then approached churches and other nonprofits with an offer: for every $3,000 in membership fees that an organization paid to the Network, the Network would award $500,000 in grants. Abraham told investors that the grants were possible because he had secured wealthy investors who would provide financing, and that the Network expected to earn a profit from its Christian resorts. More than 1,600 churches and other nonprofits paid Abraham over $8.7 million.

Abraham deposited the money into an escrow account in the name of his lawyer, and then transferred the money into another account in the name of Promotional Times International, Ltd., which was controlled by Abraham’s brother Laboyce Kennard.

The investors never received their money and Abraham was found guilty of various crimes. Laboyce was found guilty of money laundering. He appealed, arguing there was insufficient proof that he knowingly laundered money.

Issue: Was there sufficient evidence that Laboyce knowingly laundered money?

Holding: Yes, conviction affirmed. Laboyce claims that there was not enough evidence for a jury to find beyond a reasonable doubt either the existence of a criminal agreement or his knowing participation in it.

4 472 F.3d 851, 11th Circuit Court of Appeals, 2006.

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To convict Laboyce on the money laundering conspiracy charge, the prosecution had to prove that some agreement existed to launder the proceeds of Abraham’s fraud scheme, and that Laboyce knowingly participated in that agreement. The extent of Laboyce’s knowledge of the details in the conspiracy does not matter if the prosecution can show that he knew the essential objectives of the conspiracy.

There was sufficient evidence to prove that Laboyce knowingly participated in the agreement to launder the proceeds from Abraham’s fraud. Laboyce set up the Promotional account and made large deposits to that account of cashier’s checks from Abraham and checks drawn on the escrow account.

Laboyce made most of the withdrawals from the Promotional account including cashier’s checks made payable to Abraham.

Laboyce was also involved in Network events. For example: Laboyce went with Abraham to a Network meeting in Charlotte, North Caroline at which Abraham gave Network members fake checks instead of the promised grant money; Laboyce videotaped Abraham at a fake groundbreaking ceremony for a Network resort which was used to hold off member complaints; Laboyce “worked security” at a Network meeting where Abraham told the members their grants would be delayed again; and Laboyce was present at a meeting where Abraham told him that an FBI investigation of the Network led to a seizure of the escrow account.

This evidence, according to the court, was enough for a jury to find beyond a reasonable doubt that Laboyce knowingly participated in the conspiracy to launder the proceeds of the fraud.

Question: What is money laundering?

Answer: Money laundering is taking the profits of certain crimes and either (1) using the money to promote crime or (2) attempting to conceal the source of the money.

Question: How did the money laundering occur here?

Answer: Payments received from members based on a fraudulent investment scheme was passed through two accounts to hide their source and relationship to Abraham.

Question: If Laboyce did not commit the fraud, what crime did he commit?

Answer: Laboyce was charged with conspiring to commit money laundering.

Question: How is that different than money laundering?

Answer: Conspiracy to launder money involves an agreement to launder money, and Laboyce’s knowing and voluntary participation in that agreement.

Punishing a Corporation Fines The most common punishment for a corporation is a fine. This makes sense in that the purpose of a business is to earn a profit, and a fine, theoretically, hurts. But most fines are modest by the present standards of corporate wealth.

Compliance Programs The Federal Sentencing Guidelines are the detailed rules that judges must follow when sentencing defendants convicted of crimes in federal court. The guidelines instruct judges to determine whether, at the time of the crime, the corporation had in place a serious compliance program, that is, a plan to prevent and detect criminal conduct at all levels of the company.

Matching Questions Match the following terms with their definitions: (5)

A.

Larceny

(1)

B.

RICO

1.

A statute designed to prevent the use of criminal proceeds in legitimate businesses.

2.

Fraudulently keeping property already in defendant’s

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(3)

C.

Money Laundering

possession.

(4)

D.

Phising

3.

Using the proceeds of criminal acts to promote crime.

(2)

E.

Embezzlement

4.

Directing someone to enter personal information on a website that is an illegal imitation of a legitimate site.

5.

The trespassory taking of personal property.

True/False Questions Circle true or false:

F Both the government and the victim are entitled to prosecute a crime.

1.

T

2.

T F

If police are interrogating a criminal suspect in custody, and he says that he does not want to talk, the police must stop questioning him

3.

T F

A misdemeanor is a less serious crime, punishable by less than a year in jail.

4.

T

F Corporate officers can be convicted of crimes; corporations themselves cannot be.

5.

T

F An affidavit is the government’s formal charge of criminal wrongdoing.

Multiple-Choice Questions 1. Cheryl is a bank teller. She figures out a way to steal $99.99 per day in cash without getting caught.

She takes the money daily for eight months and invests it in a catering business she is starting with Floyd, another teller. When Floyd learns what she is doing, he tries it, but is caught in his first attempt. He and Cheryl are both prosecuted. (a) Both are guilty only of larceny. (b) Both are guilty of larceny and violating RICO. (c) Both are guilty of embezzlement; Cheryl is also guilty of violating RICO. (d) Both are guilty of embezzlement and violating RICO. (e) Both are guilty of larceny and violating RICO. 2. In a criminal case, which statement is true? (a) The prosecution must prove the government’s case by a preponderance of the evidence. (b) The criminal defendant is entitled to a lawyer even if she cannot afford to pay for it herself. (c) The police are never allowed to question the accused without a lawyer present. (d) All federal crimes are felonies.

3. Henry asks his girlfriend, Alina, to drive his car to the repair shop. She drives his car all right—to Las Vegas, where she hits the slots. Alina has committed (a) fraud. (b) embezzlement. (c) larceny.

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(d) a RICO violation.

4. Which of the following elements is required for a RICO conviction? (a) Investment in a legitimate business (b) Two or more criminal acts (c) Maintaining or acquiring businesses through criminal activity (d) Operating a business through criminal activity 5. Probable cause means (a) substantial evidence that the person signing the affidavit has legitimate reasons for requesting the warrant. (b) substantial likelihood that a crime has taken place or is about to take place. (c) trustworthy evidence that the victim of the search is known to have criminal tendencies. (d) that based on all of the information presented it is likely that evidence of crime will be found in the place mentioned.

Case Questions 1.

You Be the Judge: WRITING PROBLEM. An undercover drug informant learned from a mutual friend that Philip Friedman “knew where to get marijuana.” The informant asked Friedman three times to get him some marijuana, and Friedman agreed after the third request. Shortly thereafter Friedman sold the informant a small amount of the drug. The informant later offered to sell Friedman three pounds of marijuana. They negotiated the price and then made the sale. Friedman was tried for trafficking in drugs. He argued entrapment. Was Friedman entrapped? Argument for Friedman: The undercover agent had to ask three times before Friedman sold him a small amount of drugs. A real drug dealer, predisposed to commit the crime, leaps at an opportunity to sell. If the government spends time and money luring innocent people into the commission of crimes, all of us are the losers.

Argument for the Government: Government officials suspected Friedman of being a sophisticated drug dealer, and they were right. When he had a chance to buy three pounds, a quantity only a dealer would purchase, he not only did so, but bargained with skill, showing a working knowledge of the business. Friedman was not entrapped—he was caught.

Answer: Friedman argued entrapment, claiming that there was no evidence of his predisposition to traffic in drugs. The Alabama Supreme Court ruled against him. The court noted that Friedman admitted to occasional use of marijuana, that he had been able quickly to locate marijuana to resell to the agent, and that he showed a sophisticated knowledge of the drug when bargaining over the price of three pounds. The court held that there was no evidence of entrapment. Friedman v. State, 654 So.2d 50, 1994 Ala. Crim. App. LEXIS 179 (1994).

2. Conley owned video poker machines. Although they are outlawed in Pennsylvania, he placed them in bars and clubs. He used profits from the machines to buy more machines. Is he guilty of money laundering?

Answer: Yes. It is money laundering to take the proceeds of illegal acts and either conceal them or, as he did, use them to promote additional crimes.

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3. Shawn was caught stealing letters from mailboxes. After pleading guilty, he was sentenced to two months’ in prison and three years’ supervised release. One of the supervised release conditions required him to stand outside a post office for eight hours wearing a signboard stating, “I stole mail.

This is my punishment.” He appealed this requirement on the grounds that it constituted cruel and unusual punishment. Do you agree?

Answer: The appeals court affirmed the sentence on the grounds that it did not violate standards of decency. United States v. Gementera, 379 F.3d 596 (2004).

4. Karin made illegal firearm purchases at a gun show. At her trial, she alleged that she had committed this crime because her boyfriend had threatened to harm her and her two daughters if she did not. Her lawyer asked the judge to instruct the jury that the prosecution had an obligation to prove beyond a reasonable doubt that Karin had acted freely. Instead, the judge told the jury that Karin had the burden of proving duress by a preponderance of the evidence. Who is correct?

Answer: The Supreme Court sided with the trial judge. Dixon v. United States, 548 U.S. 1.

5. While driving his SUV, George Xinos struck and killed a pedestrian. He then fled the scene of the crime. A year later, the police downloaded information from his car’s onboard computer which they were able to use to convict him of the crime. Should this information have been admissible at trial?

Answer: A California court ruled that Xinos did have a reasonable expectation of privacy and the data was not admissible in court. because the computer had simply been recording his movements on a public road. People v. Xinos, 192 Cal. App. 4th 637 (Cal. App. 6th Dist. 2011).

6. While conducting a valid search of a computer for evidence of a murder, a police officer discovered child pornography. Is that evidence admissible, even though the warrant was limited to a search relating to the murder?

Answer: In United States v. Wong, the 9th Circuit ruled that the evidence of pornography was admissible under the “plain view” doctrine. 334 F.3d 831 (9th Cir. 2003).

7. The New York Times reported that Walmart paid bribes to obtain building permits in Mexico. If true, would these acts violate the FCPA? Answer: Yes. The FCPA makes it illegal for an American businessperson to give “anything of value” to any foreign official in order to influence an official decision.

Discussion Questions 1. Under British law, a police officer must now say the following to a suspect placed under arrest: “You do not have to say anything. But if you do not mention now something which you later use in your defense, the court may decide that your failure to mention it now strengthens the case against you. A record will be made of anything you say and it may be given in evidence if you are brought to trial.”

What is the goal of this British law? What does a police officer in the United States have to say, and what difference does it make at the time of an arrest? Which approach is better?

Answer: Answers will vary.

2.

In some countries, bribery is common and widely accepted. What is wrong with bribery anyway?

Why should it be illegal for American companies to pay bribes in countries where everyone else is?

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Unit 1 The Legal Environment

Answer: Answers will vary.

3. ETHICS You are a prosecutor who think it is possible that Naonka, in her role as CEO of a brokerage firm, has stolen money from her customers, many of whom are not well-off. If you charge her and her company with RICO violations, you know that she is likely to plea bargain because otherwise her assets and those of the company may be frozen by the court. As part of the plea bargain, you might be able to get her to disclose evidence about other people who might have taken part in this criminal activity. But you do not have any hard evidence at this point. Would such an indictment be ethical?

Do the ends justify the means? Is it worth it to harm Naonka for the chance of protecting thousands of innocent investors?

Answer: Answers will vary.

4. California passed a “three strikes” law, dramatically increasing sentences for repeat offenders. If defendants with two or more serious convictions, were convicted of a third felony, the court had to sentence them to life imprisonment. Such a sentence required the defendant to actually serve a minimum of 25 years, and in some cases much more. Gary Ewing, on parole from a 9-year prison term, was prosecuted for stealing three golf clubs worth $399 each. Because he had prior convictions, the crime, normally a misdemeanor, was treated as a felony. Ewing was convicted and sentenced to 25 years to life. Did Ewing’s sentence violate the Eighth Amendment?

Answer: The Supreme Court ruled that Ewing’s sentence did not violate the Eighth Amendment. It was a reasonable decision by the California legislature.

5. Ramona Fricosu was indicted on charges of real estate fraud. During a legal search of her home, the police found a computer with encrypted files. Would it be a violation of her Fifth Amendment right against self-incrimination to force her to unencrypt these files?

Answer: The courts are divided on this topic. This court did order Fricosu to unencrypt the files on the theory that she was already incriminated because the police knew the laptop was hers. United States v. Fricosu, 841 F. Supp. 2d 1232 (D. Colo. 2012). But a different court ruled that a man suspected of having child pornography on his computer did not have to unencrypt the files. United States v. Doe, 670 F.3d 1335 (11th Cir. Fla. 2012)

6. Suppose two people are living together: the suspect and a tenant. If the tenant consents to a police search of the premises, then the police are not required to first obtain a warrant. What if the suspect and the tenant disagree, with the tenant granting permission while the suspect forbids the police to enter? Should the police be required to obtain a warrant before searching? Or what if the suspect denies permission to enter but the police go back later and the tenant consents?

Answer: In the first situation, the S. Ct. ruled that if the suspect is standing there and denies consent, the police may not conduct a search. Georgia v. Randolph, 547 U.S. 103 (U.S. 2006). As for the 2nd situation, the S. Ct. will make that decision this term (Georgia v. Randolph).

7. Hiring relatives of foreign officials for no-show jobs is a violation of the FCPA. But what about hiring children of government officials into real jobs? Is that also a violation? The U.S. government is investigating JPMorgan Chase & Co.’s practice of hiring the children of top Chinese officials in Hong Kong. What are the rules in this situation? What should they be?

Chapter 6 Crime

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Answer: According to the WSJ, “Factors that would help a company fend off bribery inquiries would include proof that there was a vacant position to start with (as opposed to the company having created a new position for the official's relative); that the relative was qualified to fill it; and that the relative performed the duties of the position satisfactorily, legal experts said.” Of concern would be any evidence of a quid pro quo around the time of hiring.