After studying this chapter, you will be able to:
1. Describe the difference between criminal and civil law. 2. Describe the elements of a crime. 3. Recognize and distinguish between different property crimes. 4. Give examples of crimes relating to business.
If the purpose of law is to keep order in society, criminal law is one of its most fundamental tools. Criminal law is essentially a set of rules that a federal, state, or local government has decided must be followed by all members of society for the good of that society as a whole. The violation of one of these rules is a crime. The convicted criminal can be �ined, incarcerated, or both. In the most extreme cases, the criminal may even be put to death. The rationale behind criminal law is that society is protected not only by removing wrongdoers from the scene by locking them up, but also by discouraging others from committing crimes. Hopefully when people see how wrongdoers are punished, they will choose to comply with the law! Obviously, given the high number of repeat offenders, the punishment rationale does not always work.
As we learned in the last chapter, the same conduct may be covered by both civil tort law and criminal law. Remember O. J. Simpson, who was acquitted of criminal homicide but found liable for civil wrongful death? However, it is important to remember that these two different types of law are serving different purposes. Criminal law protects society as a whole, while civil law provides self-help redress for people who believe they have been wronged. Note also that while criminal and civil law often use the same terms (assault, for example), those terms can have completely different meanings.
Understanding some basic things about criminal law is important for the businessperson, because businesses can be both victims and perpetrators of crimes. In this chapter we will examine how crimes are de�ined, learn how constitutional law may be relevant, and look at some of the traditional crimes and the crimes speci�ic to business.
New York City taxicab drivers are known for honking their horns frequently and unnecessarily. Drivers who abuse their horns may be charged with a violation punishable by a $350 �ine.
3.1 Classi�ication and Elements of Crimes
Crimes are generally divided into two basic categories: felonies and misdemeanors. Felonies are the more serious crimes and are typically punishable by more than one year in prison and/or a certain dollar limit on �ines (for example, over $5,000). Misdemeanors are typically punishable by �ines and/or incarceration up to one year. Within the two basic categories, the crimes are further divided according to their sentencing range and seriousness, into subgroups such as Class 1 felonies, Class A misdemeanors, etc.
A third category of offenses are those sometimes referred to as violations, which are punishable by �ines and may not be recorded as a criminal record. Some traf�ic offenses or city ordinance violations would �it into this category.
Sometimes how an offense is classi�ied is determined by quantity, rather than quality, of the criminal act. For example, possession of a single serving of marijuana might be a mere violation in some states, while having a whole garage full of the substance is bound to land a person in felony territory!
Traditionally, crimes are de�ined by statute, either state or federal, as having two components or elements: a prohibited act, which is done with a particular mental state. Sometimes the same act, such as killing a person, might constitute different crimes based solely on the defendant’s mental state at the time. For example, murder or �irst-degree homicide is the most serious felony, with the highest punishment range. Murder is de�ined as the act of killing a person, done with premeditated intent.
Example 3.1. Michael suspects that Miranda is going to report Michael’s drug dealing to the police. Michael plans to kill her �irst. He acquires a gun and
shoots Miranda, killing her.
This is murder, and Michael, if convicted, will face a sentence somewhere in the range of 20 years to life, or even a death sentence, depending on the state. A lesser form of homicide is voluntary manslaughter, which involves the same act but the intent requirement is different. With this crime, the defendant intended to kill or cause great bodily harm to the victim, but the act was done in the heat of passion.
Example 3.2. Moshe comes home from work early to �ind his wife having sex with his (former) best friend on the kitchen table. Enraged by the betrayal, Moshe grabs a gun from the kitchen drawer and shoots them both, killing them.
This is still viewed as a serious crime, but Moshe will face a lesser penalty than Michael, probably something in the nature of 7 to 20 years imprisonment. A less serious form of homicide is involuntary manslaughter, in which there is no intent to kill.
Example 3.3. Ramesh and John are both fathers whose 10-year-olds play ice hockey. They get into an argument over how much ice time their sons should be getting, and the argument escalates into a �ist�ight. Ramesh punches John in the head and John falls, cracking his skull on the concrete �loor. John dies.
While Ramesh did not intend to kill John, he is still viewed by the law as having some culpability, because he did intentionally punch him, but Ramesh’s punishment could be as little as probation, or as much as six years imprisonment.
Note that the law not only punishes successful criminals, but there is also a category of crime called “attempted crime” (homicide, robbery, etc.). To commit an attempted crime, the defendant must have the intent to commit a speci�ic crime (such as homicide) and have taken a substantial step toward committing the crime.
Example 3.4. Michael �ires his gun at Miranda, who ducks and is not hit. Michael has committed attempted murder (also the tort of assault, should Miranda care to sue him).
The law sees �it to punish Michael (often with a sentence similar to that he would have faced for murder) because he has shown that he is dangerous to society. His being a lousy shot does not make him any less of a hazard or any less culpable.
How far must a defendant go to have taken a substantial enough step? Suppose Michael has not done anything but buy a gun. This is unlikely to be attempted murder, regardless of his plans for Miranda. But the lines are not always clear, and it may be up to a jury to decide how far is too far. Suppose Jaime, Isobel, and Robert decide to rob a bank. They have selected one in a downtown location, have their guns all ready to threaten tellers, and have their “Give me the money or I’ll shoot you” notes typed up, ready to hand to the tellers. However, they get lost in the maze of one-way streets downtown, and are pulled over by a police car before they �ind their way to the bank. If you were on the jury, would you consider this an attempted robbery? Clearly they have the intent, and there is no sign that they would have changed their minds. On the other hand, the trio have quite a lot to do before they will have committed a robbery. Where would you draw the line?
Another crime that does not require a speci�ic illegal act to be completed is that of conspiracy. Conspiracy to commit a crime is itself an offense, which occurs when two or more persons agree to commit a crime, and one of them takes a substantial step toward commission. For example, if Michael and his
In these videos, a WorldCom employee’s hypothetical forecast gets repeated as if it was fact, and a fraud is born. The fraud negatively affected competing companies and their employees.
Do you think the employee who came up with the original “Big Lie” was guilty of fraud? Why or why not? How did WorldCom’s Big Lie affect its competitors? The industry in general? Society as a whole?
Beyond the Book: WorldCom’s Big Lie WorldCom’s Big Lie
From Title: The Big Lie: Inside the Rise and Fraud of Worl… (https://fod.infobase.com/PortalPlaylists.aspx?wID=100753&xtid=39102)
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partner-in-crime Ethan agree Miranda should die, and Michael buys the gun and shoots her, Ethan has committed conspiracy to commit murder.
The intent or mental state requirement is so integral to proving a crime has been committed that many of the defenses center on negating it. A defense is a legal excuse for committing what would otherwise be a crime. For example, the insanity defense basically states that if the defendant, due to mental disease or defect, could not distinguish right from wrong or conform his conduct to the law, the intent element is missing. However, ignorance of the law is generally not a valid excuse. If you commit a criminal act and argue you didn’t know it was illegal, you will still likely be convicted.
It should be noted that there are also criminal and regulatory offenses that are in essence strict liability crimes, meaning that there is no intent or mental state requirement. For example, FDA regulations for food safety are violated if ABC Food Co. has rats in their storage facility, regardless of their intent or if they were even aware. In situations involving public safety, especially where members of the public are unable to protect themselves (consumers cannot individually inspect the source of all their food, for example), strict liability offenses are not uncommon. The act alone constitutes the crime.
Obviously almost any crime can occur in a business setting. Some are particularly applicable, however, such as crimes relating to property. Let’s look at some examples:
Larceny or theft is involved when the perpetrator takes another’s property with the intention of permanently depriving that person of his property. Shoplifting is a common example. Robbery is theft accomplished by the use or threat of force, such as a typical mugging. Embezzlement, a particularly popular crime with accountants, occurs when the perpetrator originally has lawful possession of the victim’s property, but then converts it to his own use. For example, if Ari, comptroller of ABC Corporation, misdirects company funds into his Swiss bank account, it would be embezzlement rather than larceny. Extortion is obtaining property by threatening the victim, as in “Pay me $5,000 or I’ll show your wife those pictures of you and your secretary in the pool late at night at the insurance convention.” Note that the threat itself does not necessarily have to be illegal, or involve force. Forgery is writing or altering a legal document, such as signing a false name to cash a check, or changing the date on a driver’s license. Burglary is breaking and entering into a structure with the intent to commit a crime therein. For example, if Natasha and Kevin jimmy open the back door and enter an appliance store at night in order to steal a television, they are committing burglary even if the police catch them in the act and they don’t leave the premises. Arson is the malicious burning of any structure belonging to another. Some jurisdictions include personal property such as cars or boats. Burning down your own home, in order to collect the insurance, is also arson. Bribery is the corrupt payment or receipt of anything of value in return for of�icial action. If Lorraine, owner of a restaurant, offers the health inspector $1,000 to ignore several health code violations, she is committing bribery. The Foreign Corrupt Practices Act (FCPA) (http://www.justice.gov/criminal/fraud/fcpa/) is a federal criminal statute that applies to the international transactions of U.S. companies. While it prohibits bribery, it does not apply to facilitation payments, which are made to get of�icials to do their normal job or do it faster. For example, if Stephen authorizes a payment in Mexico to get a public of�icial to process a license, it is likely a facilitation (or grease) payment and legal. However, it is often dif�icult to tell what’s an FCPA violation and what is legal grease. Obstruction of justice is a term applicable to a number of speci�ic crimes, and can include lying to police of�icers pursuant to an investigation, destroying evidence, or changing records, as well as crimes such as perjury (lying under oath about something material to a lawsuit or prosecution).
In addition to the application of the above to business situations, some crimes are uniquely tailored to apply to the business context. For example, many securities laws (such as insider trading) have both criminal and civil provisions. Another law that features both is the federal Racketeer In�luenced and Corrupt Organizations Act (1970), otherwise known as RICO. This law was originally intended to target people involved in organized crime. It applies to those engaging in a pattern of racketeering activity, which is de�ined as committing two of a long list of offenses (including fraud, dealing in illegal
In 2009, Madoff pled guilty to all indictment counts and was sentenced to 150 years in prison.
Kathy Willens/Associated Press
Beyond the Book: Financial Fraud Financial Fraud
From Title: Ethics in Corporate America: A Crisis of Credi… (https://fod.infobase.com/PortalPlaylists.aspx?wID=100753&xtid=31489)
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drugs or obscene materials, bribery, witness retaliation, and obstruction of justice, among others) within 10 years. RICO has been criticized for being excessive, and it is sometimes used against individuals who have nothing to do with organized crime.
In the Media: Bernie Madoff’s Ponzi Scheme: Forty Years of Organized Fraud
Bernard Madoff is serving a 150-year prison sentence for committing the biggest criminal fraud in U.S. history. The activity that Madoff pled guilty to is commonly
known as a Ponzi scheme (named after Charles Ponzi, an Italian immigrant whose use of the fraudulent act in 1920 earned him a lasting association with criminal fraud schemes—and a prison sentence), which involves someone promising an unwitting victim a stated rate of return if that person gives his or her money to the promisor to invest. Then, the defrauder keeps his �irst promise by �inding another victim, whose money is used to pay off the �irst investor and keep the rest. Of course, this requires �inding a third target whose money will be used to pay off the second victim, and so on and so on. In a Ponzi scheme, no money is actually ever invested; it is simply moved forward to an earlier person. Because a Ponzi scheme is a �inancial equivalent of a house of cards, it will eventually fall in on itself.
For Charles Ponzi (who promised his clients as high as a 50 percent investment gain), this took less than a year, but for Bernard Madoff it was over 40 years before his shenanigans �inally caught up with him. During those decades, Madoff stole $65 billion while living an ultra-luxurious lifestyle in Manhattan. Madoff’s fraud was so seamless that he even served as a Chairman of the NASDAQ stock exchange and was on the boards of several charities. While for 10 years a self-appointed investigator named Harry Markopolos tried to convince the Securities and Exchange Commission (SEC) that Madoff was not all he claimed to be, it wasn’t until the 2008 �inancial collapse that Madoff’s frauds were �inally exposed.
In March 2009, Bernard Madoff was charged with an 11-count indictment, which included mail fraud, wire fraud, securities fraud, money laundering, and perjury. Two days later, he pled guilty and in June 2009 he was given the maximum sentence of 150 years. Madoff’s two sons worked for his investment �irm and, although they were not criminally charged, they—along with their mother and their wives—were sued by the government and Madoff’s victims. In 2010, one of Madoff’s sons hanged himself in his apartment, and in 2011, Mrs. Madoff cut all ties with her husband.
Sources: http://www.nytimes.com/interactive/2009/06/29/business/madoff-timeline.html (http://www.nytimes.com/interactive/2009/06/29/business/madoff-timeline.html) http://www.cbsnews.com/8301-500202_162-20127788/madoffs-alleged-affair-was-ruths-�inal-straw/ (http://www.cbsnews.com/8301-500202_162-20127788/madoffs-alleged-affair-was-ruths-�inal-straw/) http://www.dailymail.co.uk/news/article-2140947/Madoffs-family-including-widow-son-committed-suicide-sued-255m.html (http://www.dailymail.co.uk/news/article-2140947/Madoffs-family-including-widow-son-committed- suicide-sued-255m.html) http://www.washingtonpost.com/wp-dyn/content/article/2008/12/12/AR2008121203970.html?hpid=topnews (http://www.washingtonpost.com/wp-dyn/content/article/2008/12/12/AR2008121203970.html?hpid=topnews)
The Occupational Safety and Health Act of 1970 (http://www.osha.gov/pls/oshaweb/owasrch.search_form?p_doc_type=oshact) is another federal law that has criminal provisions. It deals with employers who fail to maintain certain standards of safety and health in the workplace. Federal laws also target employers who knowingly hire illegal immigrants, providing �ines and even imprisonment for a pattern of offenses. Unfortunately, for those in businesses such as agriculture and food service, it is often dif�icult or impossible to hire legal workers. Without the illegal immigrants, many crops in the United States would go unharvested and restaurant kitchens would go unstaffed.
While many prosecutions of business crime fall under these types of statutes, it should be remembered that even traditional crimes such as homicide can come into play in a corporate setting.
Example 3.5. Ford Motor Company was indicted for reckless homicide after one of its “crash-and-burn” Pinto cars resulted in the death of three young women in Indiana. Although Ford did not have speci�ic intent to kill, executives in the company had been well aware, before a single Pinto was put on the market, that it represented an unusually dangerous �ire hazard. At one point a so-called internal bean counter memo was leaked to the press, showing that Ford had calculated the costs of lawsuits from injured people against the costs of modifying the car, and elected to market the car without enhanced safety features. Since a corporation cannot be imprisoned, the maximum penalty the company faced was a �ine under $100,000, peanuts to a major corporation. Ford, however, was still concerned, since the harm to their reputation would have been immeasurable. In the end, the company was not convicted, although this was due in part to the fact that the jury never got to see all the evidence. Nonetheless, the Ford prosecution sent ripples of alarm through corporate America.
A homicide case that was in some ways the �lip side of Ford involved a company called Film Recovery Systems (FRS).
Bernie Madoff is one of the biggest and best known fraudsters, but �inancial wrongdoing is all too common. In this video, the frequency of �inancial fraud among stock analysts is discussed.
Why do you think �inancial wrongdoing is so common in the business world?
Example 3.6. While the Ford case involved holding a corporation criminally responsible for the acts of its high-level employees, FRS involved holding executives personally accountable for homicide due to an unsafe workplace. Evidence showed that FRS was literally a toxic environment, with open vats of cyanide on the work �loor. Employees regularly got sick, and �inally a worker named Stefan Golab died. The state of Illinois indicted not just the �irm but a number of executives for murder. They were found guilty, but on appeal a new trial was granted. However, the individuals chose to plead guilty to a lesser homicide charge rather than be tried again.
Due process, as interpreted by the Supreme Court, means that law enforcement personnel must inform arrestees of their Miranda rights before interrogation.
This video summarizes the importance and intermingling of federal, state and local laws in the U.S. criminal justice system.
Why does most criminal law come from statutes? Can you think of examples where new criminal laws have been written to deal with new problems in society?
Beyond the Book: Crime in the U.S. Crime in the U.S.
From Title: Crime, Law, and Enforcement: Due Process (https://fod.infobase.com/PortalPlaylists.aspx?wID=100753&xtid=48002)
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3.2 The Constitution and Criminal Law and Procedure
There are a number of limits contained in the U.S. Constitution and its Amendments that pertain to the world of criminal law. Although whole treatises have been written on individual clauses, we shall simply sample a few here.
There are two due process clauses in the Constitution: one in the 5th Amendment that applies to the federal government, and one in the 14th Amendment that applies to state and local units. They have a similar, if complex, meaning: the law will not be used against you to deprive you of life, liberty, or property without due process of the law, which in a very general sense means some kind of basic fairness. For example, due process requires that the law be written in reasonably speci�ic and objective terms. A state law that made it a misdemeanor to “act like a scumbag” would thus be ruled void for vagueness.
Due process is the reason why if you are arrested and the police wish to question you, they must �irst give the Miranda warnings: you have the right to remain silent; if you give up that right anything you say can be used against you; you have the right to an attorney; if you cannot afford one, one will be appointed for you. The reasoning is that your Fifth Amendment privilege against self-incrimination (where the right to remain silent comes from) and your Sixth Amendment right to counsel (in criminal cases where you could face a prison term) do you no good unless you know about them. Due process thus demands that you be informed. If the police do not give the warnings, evidence they get as a result (such as your confession) will be excluded from the court proceedings, unless the prosecution can show it would have lawfully obtained the evidence anyway. The right to these warnings comes from a Supreme Court decision called Miranda v. Arizona (http://www.uscourts.gov/multimedia/podcasts/Landmarks/MirandavArizona.aspx) . However, in Mr. Miranda’s case, it really made no difference in the end; he was retried without the tainted evidence and convicted again. Perhaps he was comforted by the thought that he had forged new legal ground.
Due process also includes the right to be heard and to present a defense. Generally, if you are taken into custody, you must be charged with a crime or released within
a few days. If you are charged, a procedural calendar commences, because you have the right to a speedy trial.
The Equal Protection Clause of the 14th Amendment
The Constitution states that no person shall be denied equal protection of the law, which has been interpreted as a prohibition against the government classifying people and treating them differently because of their race, religion, national origin, or gender (but the latter category only since the mid-1970s; it took the Supreme Court a while to get there). Note that so far sexual orientation is not protected by the equal protection clause, although it sometimes falls under due process.
Equal protection is a concept with application in both criminal and civil law.
Example 3.7. One of the most famous applications of equal protection came in a case involving racially segregated public schools, Brown v. Board of Education. In many Southern states, the local governments had made a practice of making African American children attend separate schools from white children. The Supreme Court found that such segregation violated the Equal Protection clause in this landmark case, and as a result schools had to become racially integrated.
The Fourth Amendment
Another key provision is the Fourth Amendment’s right to be free from unreasonable searches and seizures by the government. This generally means that the police must make a showing before a judge or magistrate of probable cause (that is, persuade the judge that it is more likely than not that there will be evidence at the place and time they wish to search—or in the case of a seizure of a person, show a factual basis for the belief that it is more likely than not that this person committed the particular crime). If the judge �inds probable cause, a warrant is issued and the search or seizure may lawfully commence. But what if the police conduct an unlawful search or seizure? Again, the result is that the evidence is excluded.
There are a number of exceptions to the warrant requirement. For example, police can seize evidence that is in plain view, arrest without a warrant for a crime committed in an of�icer’s presence, search without a warrant when it appears likely the evidence is in the process of being destroyed, and do a pat- down search pursuant to any lawful stop of a person, for the of�icer’s protection.
It is not always clear exactly what constitutes a search. Flying over an industrial park and taking pictures from an airplane is not a search requiring a warrant, but placing a GPS device on a suspect’s car and tracking his movements intrudes on his reasonable expectation of privacy and thus requires a warrant.
It needs to be noted that if the government is acting pursuant to the Patriot Act, which was enacted hastily in the days after the September 11, 2001 attacks on the World Trade Center, your constitutional protections are less clear. The government has in some cases asserted that it is justi�ied in holding suspects without charge, listening to ordinarily privileged attorney-client communications, and seizing personal records such as �inancial information, phone logs, and materials borrowed from libraries without notice to the suspect, much less a warrant. Some of these situations placed telecommunications companies in a dif�icult position: they had to decide whether to cooperate with the government in the name of national security, or to protect the privacy of their customers by refusing to allow access to communications without a warrant. There have been a number of lawsuits, some against telecom companies that allowed wiretapping and others against the government, but the courts have not yet clearly established to what degree the Patriot Act is constitutional.
Martha Stewart leaves the U.S. Federal Courthouse in 2004, after being found guilty of conspiracy, obstruction of justice, and two counts of making false statements to federal investigators.
Timothy A. Clary
3.3 Chapter Summary
Criminal law’s focus is on protecting society as a whole. Crimes are generally de�ined by statutes, and may be categorized as violations, misdemeanors, or felonies. The de�inition of most crimes has both an act and a mental state requirement, but in the case of a crime such as conspiracy it is enough if any party to the agreement to commit the crime takes a substantial step toward completing the crime. Some criminal laws focus on protecting property, such as larceny and embezzlement, and others are designed to protect the human person, such as homicide. Other criminal laws, such as those governing workplace safety or the hiring of workers with unlawful immigration status, are unique to business situations.
Some provisions of the Constitution, such as due process and the Fourth Amendment’s prohibition against unreasonable search and seizure, are especially relevant in criminal cases, and seek to ensure that the government will not unfairly use its force in investigating and prosecuting alleged crimes.
Businesspeople need to be familiar with criminal law, because businesses can be both perpetrators and victims of crimes. An awareness of the legal issues in this area will aid the businessperson in making better choices and in dealing more effectively with the legal system.
Focus on Ethics
Domestic diva Martha Stewart ran afoul of the law originally during an insider trading investigation, where it was alleged she had been tipped off to sell her stock in a company called ImClone Systems, before an adverse FDA ruling became public, causing the price to drop. Stewart’s advance sale saved her about $45,000, peanuts for a billionaire. The ImClone investigation eventually led to Stewart’s being charged with and convicted of obstruction of justice and lying to federal investigators. She was sentenced to �ive months in a federal prison and two years of supervised release (including a period of electronic monitoring).
Questions for Discussion
1. Stewart was not convicted of perjury, which involves lying under oath. Do you think lying when you have not sworn to tell the truth should be a crime?
2. Many commentators felt Stewart was charged because she was famous. On one hand, prosecuting a well-known person sets an example that may deter others from like behavior. On the other hand, her offense was a fairly minor one when compared to many instances of Wall Street or corporate wrongdoing. Do you think a person’s celebrity status should play a role in whether he or she is charged with a crime?
3. Government investigators routinely lie to the people they interrogate. For example, a detective may tell a suspect, “We’ve got a witness who saw you at the scene of the crime” when in fact there is no witness. Police excuse this tactic as an effective way to get guilty suspects to make deals. But what of the person who is wrongly accused? He feels as though he has fallen down a rabbit hole into a crazy world where it is dif�icult to tell what is real and what is not. These people become confused, exhausted, and sometimes even confess to things they haven’t done. Is it fair for one side to play by different rules? Do you think investigators are behaving ethically in such situations?
4. A person in Martha Stewart’s position is probably aware that being thought guilty of a crime—or even being investigated in connection with a crime— will affect her entire business empire. In fact, she stated on the courthouse steps that 200 people employed by her business had lost their jobs as a result of the case. If she had not proclaimed her innocence, it’s likely the stock price of her company would have fallen precipitately and many people would have lost money. Is a person who falsely declares she is innocent in these circumstances acting ethically or unethically?
Case Study: State v. Beciraj 671 N.W.2d 250 (N.D. 2003) (http://caselaw.�indlaw.com/nd-supreme-court/1220495.html)
Facts: The defendant Beciraj and her husband were charged with and convicted of conspiracy to commit arson for the purpose of collecting insurance money. At trial, evidence showed Beciraj and her husband took out insurance a few months before the �ire. On the day of the �ire, neighbors saw Beciraj carrying bags of clothing and other household items away from the mobile home. The mobile home was left unlocked, and none of the family was present at the time of the �ire. Sadik Beciraj inquired about getting money from the community and knew the exact insurance limits on his policy. The evidence also suggests Beciraj knew her husband needed money.
Ironically, the policy had been canceled by the insurance company before the day of the �ire. Beciraj argued on appeal that she could not be convicted of conspiracy when it was impossible to commit the crime itself. She stated that since there was no insurance, she could not commit arson to obtain insurance money.
Issue: Can the defendant be convicted of conspiracy, even if it is impossible to commit the root crime?
Discussion: The court found that the law requires only that the defendant start a �ire with intent to destroy or damage his property for the purpose of collecting insurance for the loss. There is no statutory requirement that there actually be insurance. Thus there may be a conspiracy to commit this crime even if, unknown to the conspirators, the insurance has already lapsed. The conviction was af�irmed.
Holding: The defendant had the intent and a substantial step was taken toward committing the crime.
Questions for Discussion
1. Does this law punish people for “bad thoughts”? Why or why not? 2. What do you think the rationale is behind having crimes like conspiracy? How do they serve to protect society? 3. Consider the following situation: Sam the sailor is on shore leave, and looking to score. He goes to a bar and starts talking to a woman, Alice. He buys her several drinks, and it seems to be working; Alice appears to be both drunk and friendly. Sam asks her to dance, and while they are on the dance �loor, Alice stumbles and appears to pass out in Sam’s arms. Sam carries her out back and has sex with her. But it turns out that Alice actually had a massive coronary back on the dance �loor, and died right then and there. What crime has Sam committed (besides necrophilia, which is not the sort of charge that excites prosecutors)?
Case Study: People v. Randono 32 Cal. App. 3d 164 (Cal. App. 4th Dist. 1973) (http://law.justia.com/cases/california/calapp3d/32/164.html)
Facts: Randono and Dreyer were business partners who operated a bar named Feliciano’s, and a restaurant called the Saddleback Inn. When the Saddleback Inn was on the edge of bankruptcy, Randono ordered $20,000 worth of liquor for the inn and transferred it to Feliciano’s without payment. After the creditors repossessed the inn, Palmer, who was the manager for the inn’s liquor distributor, inquired about the liquor and learned that it was missing from the inn. After being confronted by Palmer, Randono assured him that the liquor should be in the inn, and then told Torbitt, manager of Feliciano’s, to build a wall across the hallway at Feliciano’s to hide the liquor. When the police of�icers executed a search warrant at Feliciano’s, they removed the wall and seized the liquor. Randono was convicted of grand theft and granted 3 years probation with full restitution (reimbursement of victims). His partner Dreyer was the key witness of the prosecution. Randono appealed, arguing that the evidence against him was insuf�icient and that the application of the theft statute to his actions denied him the due process.
Issues: Was evidence against Randono suf�icient? Was the theft statute correctly applied to his actions?
Discussion: The appellate court stated that when the conviction is based on the testimony of a single witness, the prosecution must present independent corroborating evidence that would connect the defendant to the crime. Here, Randono’s conduct in ordering and accepting the liquor constituted an implied promise to pay and constituted independent evidence. If Randono hadn’t made a contract to order the liquor, the only other alternative was to suppose that the sellers gave him $20,000 worth of liquor as gifts, which as the court said “would �ly in the face of reason and experience.” Invoices with price and terms of payment also prove that the liquor was sold to Randono. The testimony of Dreyer (who was Randono’s accomplice in the crime) was corroborated by three witnesses and evidence of delivery of 334 cases of liquor. Moreover, Randono’s attempts to hide the liquor may be construed as evidence of guilt.
According to Section 484 of the California Penal Code, “Every person . . . who shall knowingly and designedly, by any false or fraudulent representation or pretense, defraud any other person of money . . . or personal property . . . is guilty of theft.” Randono’s conduct in ordering the liquor without intention to pay constitutes a false pretence under this statute. Therefore, the trial court correctly applied the theft statute to his actions.
Holding: The conviction was af�irmed.
Questions for Discussion
1. What crime did Randono commit and who assisted him? 2. What evidence did the prosecution produce against Randono? Why was that evidence suf�icient? 3. Why did the appellate court conclude that Randono bought the liquor? 4. Do you think that stealing something by false pretenses, as was done here, is less serious than traditional theft, more serious, or the same? Why?
Critical Thinking Questions
1. How well does criminal law succeed in its goal of keeping order in society? Explain. 2. In the early days of corporate law, courts found that corporations could not commit crimes because they had no mind to form intent. What are the arguments for holding companies accountable for crimes? What are some ways of accomplishing it?
Hypothetical Case Problems
Case 1. Max, vice president of ABC Co., is about to leave work one evening when he realizes it is raining. Since he doesn’t have an umbrella, he takes the one belonging to his secretary, Jenna. Max is accosted in the parking lot by Jordan, who pulls out a gun and demands Max’s wallet. After calling the police, Max heads home. Meanwhile, back at ABC, Tom and Brittany have smashed a window and climbed into the building, thinking to see what they can take to sell for drug money.
A. Has Max committed larceny by taking Jenna’s umbrella? B. What crime did Jordan commit? C. What crime have Tom and Brittany committed?
Case 2. Eric gets into a �ight with Ben and punches him in the face, which causes a cerebral hemorrhage that kills Ben. Kevin, president of Massive Mining Co., ignores multiple safety citations at the Big Branch mine. Later there is an explosion in the mine, due in part to inadequate ventilation previously cited, and 15 miners are trapped underground. Ten die of injuries and bad air; �ive are rescued.
A. What crime has Eric likely committed? B. Has Kevin personally committed a crime? C. Who do you think it would be easier to prosecute and convict? D. Suppose both Eric and Kevin are convicted. Who do you think should get the stiffer sentence? Why?
Click on each key term to see the de�inition.
attempted crime (http://content.thuzelearning.com/books/AUBUS311.12.3/sections/front_matter/books/AUBUS311.12.3/sections/front_matter/books/AUBUS311.12.3/sections/front_matter/
A crime committed when the defendant intended to commit a speci�ic crime such as murder, and took a substantial step toward committing the crime.
A crime committed when two or more persons agree to commit a speci�ic crime and one of them takes a substantial step toward committing the crime.
A statutory wrong, prosecuted by the government and carrying a punishment that may include incarceration.
The person being prosecuted for a criminal offense.
A legal excuse for committing what would otherwise be a crime, or a strategy for raising a reasonable doubt as to defendant’s guilt.
The more serious category of crime, capable of being punished by a sentence of more than a year’s imprisonment.
A less serious category of crime, capable of being punished by a sentence of up to one year’s imprisonment.
A quasi-criminal offense that is punishable by �ine but not imprisonment.