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Business Law and the Legal Environment for a New Century
Alternate Edition
Quotes of the Day
“He threatens many that hath injured one.”
Ben Jonson, English Dramatist
“Most of the evils of life arise from man’s
being unable to sit still in a room.”
Blaise Pascal,
French Scientist and Religious Essayist
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Business Law and the Legal Environment for a New Century
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Civil Law vs. Criminal Law
Civil law concerns the rights and liabilities
between private parties; criminal law concerns
those activities that society has outlawed.
 Procedure for criminal trial -- government
decides whether to prosecute; defendant
has the right to a jury trial.
 In a criminal suit, the court determines the
guilt, so that a punishment can be given.
 A felony is a serious crime, with a
sentence of one year or more in prison. A
misdemeanor is less serious, often with a
sentence of less than a year.
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Purpose of Punishment

Restraint -- to keep a violent criminal away
from the rest of society.

Deterrence -- avoid future crimes, both by
this criminal and by others “warned” by the
punishment.

Retribution -- to give criminal a punishment
equal to his crime.

Vengeance -- to make the criminal suffer.

Rehabilitation -- to provide training to allow
the prisoner to return to normal life.
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Business Law and the Legal Environment for a New Century
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The Prosecution’s Case
 Conduct Outlawed
• The prosecution must show that the defendant’s
alleged activity is indeed illegal.
 Burden of Proof
• The jury must believe beyond a reasonable doubt
in order to convict. This is to protect innocent
defendants from undeserved punishment.
 Actus Reus (means “the guilty act”)
• The prosecution must show that the defendant
committed the act (not just talked about doing it).
 Mens Rea (means “guilty state of mind”)
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Business Law and the Legal Environment for a New Century
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Mens Rea
The defendant must have had a “guilty state of mind.”
 General Intent
• Required by most crimes; the defendant intended to
do the illegal act they are accused of doing.
 Specific Intent
• Some cases require that the defendant intended to
do something beyond the act they are accused of.
 Reckless or Negligent Conduct
• Consciously disregarding a substantial risk of injury.
 Strict Liability
• Certain actions don’t require a guilty state of mind,
only proof that the defendant did the illegal action.
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Business Law and the Legal Environment for a New Century
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Defenses
 Insanity
• A defendant who can prove he was insane at
the time of the crime will be declared not guilty.
• Two basic tests are used to determine sanity:
– M’Naughten Rule: must show a serious,
identifiable mental illness and that he didn’t
understand the nature of his act.
– Irresistible Impulse: must show that a mental defect
left him unable to control his behavior.
 Entrapment
• If the government induces a defendant to break
the law, they must prove that the defendant
was predisposed to commit the crime.
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Business Law and the Legal Environment for a New Century
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Defenses (cont’d)
 Justification
• A defendant may plead justification if he
committed a criminal act in order to avoid a
greater harm.
 Duress
• A defendant may plead duress if she can
show that a threat by a third person caused
her fear of imminent physical harm.
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Crimes That Harm Business
 Larceny -- The trespassory taking of
personal property with the intent to steal it.
• Someone else originally had the property.
• Applies to personal property, not services or
real estate.
 Embezzlement -- Fraudulent conversion of
someone else’s property already in the
defendant’s possession.
• Defendant already had possession (but not
ownership or control) of the property.
• Defendant used property for own uses.
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Crimes That Harm Business (cont’d)
 Fraud -- Deception for the purpose of taking
money or property from someone.
• Includes bank fraud, wire and mail fraud,
insurance fraud, Medicare fraud.
 Computer Crime -- federal statutes prohibit
unauthorized access to computers:
• in the federal government
• at financial institutes involved with the
government
• by means of an internet that crosses state lines
Go to the internet for statistics on corporate losses to computer crime.
Click here for internet links describing various computer crimes.
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Crimes Committed by Business
 If someone commits a crime within the
scope of his employment and to benefit the
corporation, the company is liable.
 Punishment
• Fines -- appropriate since this hurts the profit.
• Imprisonment? -- yes, in the sense of closing
down the company temporarily or permanently.
 Compliance programs -- if a company has a
valid, functioning plan to prevent and detect
criminal behavior, the judge must (according
to Federal Sentencing Guidelines) reduce
the penalty of a crime of an employee.
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Crimes Committed by Business
 Occupational Safety and Health Act
• OSHA sets standards for safety in the workplace.
• A state may set standards tougher than OSHA.
 Money Laundering -- using the profits of
criminal acts to promote more crime or
concealing an illegal source of money.
• Commonly associated with the illegal drug trade.
 Racketeer Influenced and Corrupt
Organization Act
• Creates both civil and criminal law liabilities.
• Is aimed at organized crime -- those involved with
a series of illegal acts.
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RICO --
Racketeer Influenced and
Corrupt Organization Act
RICO prohibits using two or more
racketeering acts to accomplish certain goals.
 Racketeering Acts
• Include (among others) embezzlement, arson,
mail fraud, and wire fraud.
• To violate RICO, there must be two or more of
these acts.
 Goals that Violate RICO
• Using criminal money to invest in or acquire a
business.
• Maintain a business using criminal activity.
• Operate a business using criminal activity.
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Constitutional Protections
 No matter what crime a suspect is accused
of, the Constitution of the United States
offers protection against inhumane
treatment and ensures certain human rights.
 The procedures by which a suspect is
investigated, arrested, interrogated and tried
is controlled by the Bill of Rights.
 Almost all important criminal procedure
rights have been expanded beyond the
federal government to law enforcement at
the state and local level.
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The Criminal Process
 Notification to Police -- the police find out
about a suspect, sometimes by an informant.
 Warrant -- if a search is needed, police take
an affidavit (sworn written statement from an
informant) to a judge, who issues a warrant,
giving permission to search a particular place,
looking for particular evidence.
 Probable Cause -- based on the information
given, it is likely that the specified evidence
will be found.
 Search and Seizure -- police may search and
seize only what is specified by the warrant.
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The Criminal Process (cont’d)
 Arrest Warrant -- based on information found
in the search, the judge may issue an arrest
warrant.
 Arrest -- when a suspect is arrested, he is
informed of his rights and booked (name,
photograph and fingerprints are recorded,
along with the charges).
 Bail Hearing -- a judge must promptly decide
what the bail (if any) will be. This is the
amount that must be paid for the suspect to
be set free pending trial.
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The Criminal Process (cont’d)
 Indictment -- if a grand jury (ordinary citizens)
determines that there is probable cause to
proceed to trial, the suspect is indicted
(charged with the crime).
 Arraignment -- the indictment is read to the
suspect, who then pleads guilty or not guilty to
the charges.
 Discovery -- both sides gather as much
evidence as possible. The prosecution must
hand over to the defense any evidence
favorable to the defense.
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The Criminal Process (cont’d)
 Motion to Suppress -- if the defense thinks the
prosecution got evidence illegally, it will ask
the judge to exclude that evidence.
 Plea Bargaining -- in many cases, the
prosecution will offer to end the case with
reduced charges if the defendant will plead
guilty.
 Trial and Appeal -- if no plea bargain is
reached, the case goes to trial. The
prosecution must convince the jury beyond a
reasonable doubt in order to convict.
Convicted defendants may appeal.
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Fourth Amendment
Prohibits illegal searches and seizures.
 There are six situations in which police
may search without a warrant.
• Plain view -- the evidence is not concealed.
• Stop and Frisk -- may search a suspect if there is
good reason to believe he may be armed.
• Emergencies -- such as in a chase; suspect may
be searched.
• Automobiles -- if lawfully stopped for other
reasons, and evidence is visible, police may
search entire car.
• Lawful arrest -- anyone arrested may be
searched.
• Consent -- if consent is given by the lawful
occupant of the home, police may search it.
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Fourth Amendment
 A search WITH a warrant is unlawful, if:
• There was no probable cause.
• The warrant did not specify place or items.
• The search extended beyond the scope of the
warrant.
 Exclusionary Rule
• Evidence obtained illegally (either without a
warrant or improperly obtained with a warrant)
may not be used at trial against the victim of the
search.
• The purpose of the exclusionary rule is to make
sure that the police follow proper procedures
when conducting a search.
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Fifth Amendment
 Due Process -- procedures to ensure fairness
must be followed.
 Double Jeopardy -- a defendant may only be
tried once for a particular offense, no matter
what is found later.
 Self-incrimination -- the prosecution may not
use coercion to force a confession from a
suspect. The suspect may refuse to answer
any questions that could be used to convict him.
 Miranda rights -- when arresting a suspect, the
police must inform her that she has the right to
remain silent, that anything she says can be
used against her and that she has a right to a
lawyer (for free if needed).
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Other Amendments
The Sixth Amendment
 Guarantees the right to a lawyer, and to have
him present for all stages of the process.
 Government must provide lawyer, at no charge,
for those who cannot afford one.
The Eighth Amendment
 Prohibits cruel and unusual punishment.
 Capital punishment (death penalty) has been
controversial under this amendment.
 Forfeiture (forced loss of property) has been
allowed under this amendment, but the
allowable amount has not been set.
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Business Law and the Legal Environment for a New Century
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“Crime comes in many
forms and the culprits can
surprise us.”
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Business Law and the Legal Environment for a New Century
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