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White Collar Crime Outline

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  • OverviewWCCApproaches

    OffenseRelatedo Focusesonhowacrimeiscommitted

    OffenderRelatedo Focusesonaparticulargroupofpeoplethoseinhighstatusorrespectedoccupations,

    orpositionsofpower NotethatalthoughaspecificcrimemaybethoughtofasWCC,theconductmayfallintoboth

    WCCandstreetcrimedependingontheconductinvolvedo Forexample,acomputercanbeusedtocommitbothawhitecollarandnonwhitecollar

    offenseTheWCCriminalLawyer

    InformationControlo Oppositionofgovernmentadversariesinquasijudicialandcourtsettings,challenging

    subpoenasandseekingtosuppressevidencealreadyobtained DistinctiveRole

    o Presentationofsubstantivedefenses,i.e.defensesclaimingtheclienthasnotviolatedthelawoftenpresentedbeforeachargeisevenmade,ratherthanwaiting

    o WCCtypicallyhaveambiguityintheirdefinition(althoughnotall)defensemaybenefit ConstitutionalityIssues:ProsecutionofWCCriminals

    o Debateovermethodsusedbyprosecutorstogetinformationavailablethroughothersourceslessinvasiveortroublesometotheaccusedviasubpoenas,depositions,etc.

    o UseoflegitmethodsdebatedwheninformationisreadilyavailableinotherwaysTheFederalRole

    ThevastmajorityofWCCprosecutionisbroughtunderstatelawinstatecourtsandgoverned,apartfromConstitutionalissues,bystatelaw

    TheSupremeCourthasnotedonnumerousoccasionsthatstateshavetheprincipalresponsibilitytodefineandprosecutecrimes

    ConsidertheOmnibusCrimecontrolandSafeStreetsActof1968,whichincludedfederalfirearmsprovisionsthatsupplementedstatecriminalprohibitionsANDprovidedsubstantialfederalfinancialassistancetostateenforcementcrimeisessentiallyalocalproblem

    o Congressdoesextendfed.lawtocrimeconsiderPatriotActandSarbanesOxleyAct Thethreefastestgrowingareasofthefederaldocket:

    o Drugoffenses,Immigrationoffenses,FirearmoffensesFederalInfluenceandLocalCorruption

    FourFederalStatutestraditionallyappliedtoothercriminalactivitywereputintousebeginninginthe1970stohandlecorruptlocalofficials

    o HobbesAct,MailFraudAct,TravelAct,RICO SeeSabriv.USinwhichtheSupremeCourtdismissedafederalismchallengeagainstan

    anticorruptionstatutetargeting,amongothers,officialsofstateandlocalgovernments,whenusedbythefederalgovernmenttoprosecutebriberyofaMinneapolisCommunityDevelopmentAgencysBoardofCommissioners,duetoinvolvement/potentialinvolvementoffederalfundsSee18U.S.C.666

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  • DualSovereigntyRule(akaPetitePolicy,Petitev.UnitedStates,notinConstit.somestatesd/nuse) NeitherthedoublejeopardybarnorthedueprocessrequirementoftheConstitutionpreventboth

    theFederalGovernmentANDStatefromprosecutingthesamedefendantforthesamecriminalconduct

    o SeeU.S.v.Lanza Allowsafed.prosecutionnotwithstandingpriorstateprosecutionforsameconduct

    o TheDOJhasapolicyondualprosecutionandsuccessivefederalprosecutionthat:o Precludestheinitiationorcontinuationoffederalprosecution,followingapriorstateor

    federalprosecution,basedonsubstantiallythesameact(s)ortransaction(s)IF: Mattermustinvolveasubstantialfederalinterest Priorprosecutionmusthaveleftthatinterestdemonstrablyunvindicatedand Thegovernmentmustbelievethatthedefendant(s)conductconstitutesafederal

    offense,andthattheadmissibleevidenceprobablywillbesufficienttoobtainandsustainaconvictionbyanunbiasedtrieroffact

    Note:U.S.AttysManualprovidesguidelinesthatarenotbindinginlaw,butareveryimportanttoknowandfollowForeignCorruptPracticesAct(FCPA)SeeUnitedStatesv.Castle(CantdodgechargeforconspiracytoviolateFCPA,whichexcludesforeignofficials,ifnochargespossibleunderFCPACanadiandefendantscase)SeeUnitedStatesv.Kay(OnspecificityofstatutesCongressionalintentiswhatitsays,FCPAclearinlanguageandclearincomponentsreq.forprosecution)InternationalLawhasfiveprinciplescommonlyusedtodeterminewhetheracriminalstatuteshouldhaveextraterritorialapplication:

    1. Territorial,whereinjurisdictionisbasedontheplacewheretheoffenseiscommitted2. National,whereinjurisdictionisbasedonthenationalityornationalcharacteroftheoffender3. Protective,whereinjurisdictionisbasedonwhetherthenationalinterestisinjured4. Universal,whichamountstophysicalcustodyoftheoffenderand5. PassivePersonality,whereinjurisdictionisbasedonthenationalityornationalcharacterofthe

    victimSeeUnitedStatesv.NipponPaperIndustriesCo,LTD.(ShermanActviolationCourtstatedstatutorylanguageisvitalandapplicationoffederallawabroadcangreatlyhingeontheimpactoftheconductinquestiondomestically,evenifwhollyabroad)Statuteherehadtheruleoflenityinitambiguity/dualinterpretationofstatuteresolvedinfavorofdef.(heldnonapplic.inthiscase)

    Extraterritoriality

    StatuteFocusedonExtraterritorialConducto FCPA,forexampleclearlystatesthatitgivestheUSextraterritorialability

    SpecificProvisionso Statutesthatmayhaveanextraterritorialprovisionwithinito 18U.S.C.1623:Thissectionisapplicablewhethertheconductoccurredwithinor

    withouttheUnitedStates. JudicialInterpretation

    o Congressissilent,statuteissilent

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  • ShermanActisanexample(seeNipponcaseabove)notfocusedonextraterritorialconductasastatute,so

    o CourtslooktoCongressintent/leg.historywhichishard RevenueRule?

    SeePasquantinov.UnitedStates(CandianUSliquorsmugglingUSstatuteclearlyprohibitedtheiractionsandcouldbeapplied)ForeignCommerceSeeUnitedStatesv.Tarkoff

    Twowaystoestablishthatadefendantconductedafinancialtransaction.o Thegovernmentmustproveeither:

    (1)That[thedefendant]participatedinatransactionthatinanywayordegreeaffectedinterstateorforeigncommerceandinvolvedthetransferoffundsortheuseofoneormoremonetaryinstruments,or

    (2)That[thedefendant]participatedinatransactionthatinvolvedtheuseofafinancialinstitutionthatwasengagedin,ortheactivitiesofwhichaffected,interstateorforeigncommerceinanywayordegree."

    TarkoffwordedlooselyenoughtoallowtheUStoexpanditsjxdtoawidesetofindividuals/acts.Corporate(Criminal)Liability

    1. Originally,noCorporateCriminalLiabilityatCLa. Nobody,nomind

    2. Then,forregulatoryoffensesonlya. Actsofomissionintentnotrequired,onlyfines

    3. Liabilityforactsbeyondomissions,butlimitedtostrictliabilitya. Courtssaynobasisfordistinguishingpassiveandactiveacts

    4. NOW,criminalliabilityforactswithmensrea,tooa. NewYorkCentralcase

    SeeNewYorkCentral&HudsonRiverRailroadCompanyv.UnitedStates

    Acorporationmaybeheldcriminallyliablefortheactsofitsagentsactingwithinthescopeoftheirauthority

    Note:o Thiscasetookawayimmunityfromcrim.prosecutionthatcorpspreviouslyenjoyed.

    GoodFaithDefenseo Offeredtocompaniesincivilactionswhenfacingrespondeatsuperiorintort

    Thatis,whenacorporationactsingoodfaithwhileconcurrently,arogueemployeeactsotherwise

    o However,inUnitedStatesv.IoniaManagementS.A.,the2ndCircuitheldthattherewasnoprecedentforanaffirmativedefenseforcorporatecriminalliability

    Goodfaithmaybeconsideredbythecourtinsentencingo Thereisnogoodfaithdefenseincriminallawforcorporations,rightnow.

    FortheBenefit

    3

  • Actionforthebenefitofthecorporationisrequiredforcorporatecriminalliabilityunlessitsastrictliabilitycrimeinwhichcaseitdoesnotmatter.

    o Thislineofanalysisisusedinconjunctionwithrespondeatsuperior(employerresp.employeewhenemployeeactinginscopeofemployment)

    WhenprosecutingtheCORPORATION,resp.superiorANDforthebenefitof Ifyoureprosecutinganindividual,youlooktothestatute

    SeeStandardOilCompanyofTexasv.UnitedStates(vic.li.Req.corp.benefittingfromacts) CourtsaidthescenarioshouldbeaddressedbyborrowingfromtortmostoftenusedTest

    inthesescenarioso 1)Purposetobenefitthecorporation,ANDo 2)Performedbyanagentwithinscopeofemployment

    Thecorporationdoesnotacquirethatknowledgeorpossessrequisitestateofmindessentialforresponsibilitythroughactivitiesofunfaithfulservantswhoseconductundertakenfortheinterestsofpartiesotherthantheircorp.employer

    SeeUnitedStatesv.HiltonHotelsCorp.(Corpsvic.lia.evenifemployeeactedagainstpolicy)

    Acorporationiscriminallyliablefortheactsofitsagentsinthescopeoftheiremployment,evenwhereagentshaveactedagainsttheexpresspolicyofthecorporation,whenthecorporationwillprofitfromtheillegalactivity

    Note:JuryUnanimity

    Infederalcriminalcasesbroughtunder848oftheShermanAct,thejurymustunanimouslyagreenotonlythatthedefendantcommittedsomecontinuingseriesofviolations,butalsothatthedefendantcommittedeachoftheindividualviolationsnecessarytomakeupthatcontinuingseries

    RestrictingCorporateCriminalLiability

    Corporatecriminalliabilityhascontinuallybeenthesubjectofcriticism Federalv.MPC(ALI)

    o Federalcourtsandmanystatecourtsusethecommonlawrespondeatsuperiorapproachinassessingwhethertoimputetheactsofanagenttothecorporationforthepurposesofcriminalliability

    MPCfocusesonwhetheractorwasahighmanagerialagento TheMPCapproachiscriticizedbecausehigherupsdontnecessarilydothesesortsof

    thingswhataboutlittleguys? RespondeatSuperiorapproachisthemajorityapproach,anditisusedinmost

    jursidictionsTheALIsMPCapproachistheminorityview CorporateDissolution

    o MelroseDistillers,Inc.v.UnitedStatestheSupremeCourtallowedacriminalactionagainstacorporationthathadbeendissolved

    ProceduralConsiderationso ACORPORATIONdoesnothave5thprivilegeso ITDOEShaveACPand4thAmendmentrights,whethercorp.liabilityornot

    CollectiveKnowledge

    Byaggregatingtheactsandomissionsoftwoormorenaturalpersonsactingasthecorporation(withinscopeofemployment),theactusreusandmensreaforcorporatecriminalliabilitycanbeobtainedthroughcollectiveknowledge

    4

  • o Whenmultipleactorswho,collectively,satisfytheactus/mensofthecrimebeingalleged,youmayusethisdoctrinetosuetheCORPORATIONasanalternativetorespondeatsuperior

    SeeUnitedStatesv.BankofNewEngland(CKDexample) "Thebank'sknowledgeisthetotalityofwhatalloftheemployeesknowwithinthescopeof

    theiremployment"DeferredProsecutionAgreements/NonProsecutionAgreements

    Corporationsrarely,ifever,gototrialo Instead,theyoptforaDPA,aNPA,oraplea

    DPAo Actuallygoesthroughthecourtprosecutionis

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