PowerPoint Slides to Accompany
CONTEMPORARY BUSINESS AND
ONLINE COMMERCE LAW
6th Edition
by Henry R. Cheeseman
Chapter 6
Criminal Law and White
Collar Crime
Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.
Crime
Any act done by an individual in violation
of those duties that he or she owes to
society and for the breach of which the
law provides that the wrongdoer shall
make amends to the public.
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6-2
Penal Codes and Regulatory Statutes
 Statutes are the source of criminal law.
 Federal and state statutes define activities
that are considered to be crimes within
their jurisdictions.
 Many regulatory statutes provide for
criminal violations and penalties.
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6-3
Parties to a Criminal Action
 In a criminal lawsuit, the government is
the plaintiff.
 The government is represented by a
lawyer called the prosecutor.
 The accused is the defendant.
 The accused is represented by a defense
attorney.
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Classification of Crimes
All crimes can be
classified into one
of the following
categories:
Felonies
Misdemeanors
Violations
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Felonies
 Felonies are the most serious kinds of
crimes.
 Felonies include crime that are mala in se
– inherently evil.
 Most crimes against the person and some
business-related crimes are felonies.
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6-6
Misdemeanors
 Misdemeanors are less serious than
felonies.
 They are crimes mala prohibita – not
inherently evil but are prohibited by
society.
 Many crimes against property are
misdemeanors.
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Violations
 Crimes that are neither a felony nor a
misdemeanor that are usually punishable
by a fine
 For example:
Traffic violations
 Jaywalking

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Essential Elements of a Crime
 Two elements must be proven for a
person to be found guilty of most crimes:
1. Criminal Act
2. Criminal Intent
 Strict or absolute liability--standard for
imposing criminal liability without a finding
of intent.
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6-9
Criminal Act
 The defendant must have actually
performed the prohibited act.
 Actus reus (guilty act) – the actual
performance of the guilty act.
 Merely thinking about a crime is not a
crime because no action has been taken.
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6 - 10
Criminal Intent
 Mens rea (evil intent) – the possession of
the requisite state of mind to commit a
prohibited act.
 Specific intent – the accused
purposefully, intentionally, or with
knowledge commits a prohibited act.
 General intent – a showing of
recklessness.
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6 - 11
Criminal Acts as the Basis for Tort
Actions
 An injured party may bring a civil tort
action against a wrongdoer who has
caused the party injury during the
commission of a criminal act.
 Civil lawsuits are separate from the
government’s criminal action against the
wrongdoer.
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6 - 12
Civil and Criminal Law Compared
Issue
Civil Law
Criminal Law
Party who brings the action The plaintiff
The government
Trial by jury
Yes, except actions for
equity
Yes
Burden of proof
Preponderance of the
evidence
Beyond a reasonable doubt
Jury vote
Judgment for plaintiff
requires specific jury vote
Conviction requires
unanimous jury vote
Sanctions and penalties
Monetary damages and
equitable remedies
Imprisonment, fine, capital
punishment, probation
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6 - 13
Pretrial Criminal Procedure
 Pretrial criminal procedure consists of
several distinct stages including:
Arrest
 Indictment or Information
 Arraignment
 Plea Bargaining

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6 - 14
The Criminal Trial
 All jurors must unanimously agree before
the accused is found guilty of the crime
charged.
 If one juror has reasonable doubt about
the guilt of the accused, the accused is
not guilty of the crime charged.
 If all of the jurors agree that the accused
did not commit the crime, the accused is
innocent of the crime charged.
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6 - 15
After Trial, the Following Rules
Apply:
 If the defendant is found guilty, he or she may
appeal.
 If the defendant is found innocent, the government
cannot appeal.
 If the jury cannot come to a unanimous decision
about the defendant’s guilt, the jury is considered a
hung jury.

The government may choose to retry the case before a
new judge and jury.
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6 - 16
Crimes Affecting Business
 Robbery
 Burglary
 Larceny
 Theft
 Receiving stolen property
 Arson
 Extortion
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6 - 17
The Information Infrastructure
Protection (IIP) Act (1996)
 Federal law that addresses computer-
related crimes as distinct offenses
 The Act provides protection for any
computer attached to the Internet.
 The Act makes it a federal crime for
anyone to intentionally access and obtain
information from a protected computer
without authorization.
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6 - 18
White-Collar Crimes
 Crimes that are prone
to be committed by
businesspersons that
usually involve
cunning and deceit
rather than physical
force
 Forgery
 Embezzlement
 Bribery
 Criminal Fraud
 Mail Fraud
 Wire Fraud
 Money Laundering
 Identity Fraud
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6 - 19
The Foreign Corrupt Practices Act
 Makes it illegal for American companies,
or their officers, directors, agents, or
employees, to bribe a foreign official, a
foreign political party official, or a
candidate for foreign political office
 Requires firms to keep accurate books
and records of all foreign transactions
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6 - 20
Racketeer Influenced and Corrupt
Organizations Act (RICO)
 Makes it a federal crime to acquire or
maintain an interest in, use income from,
or conduct or participate in the affairs of
an “enterprise” through a “pattern” of
“racketeering activity”
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6 - 21
Money Laundering Control Act
A federal statute that makes it a crime to:
 Knowingly engage in a money transaction
through a financial institution involving
property worth more than $10,000
 Knowingly engage in a financial
transaction involving the proceeds of an
illegal activity
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6 - 22
Identity Theft and Assumption
Deterrence Act (1998)
 Federal law that criminalizes identity fraud
 The Act makes it a federal felony
punishable with prison sentences ranging
from 3 to 25 years.
 The Act appoints the Federal Trade
Commission (FTC) to help victims restore
their credit and erase the impact of the
imposter.
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6 - 23
Corporate Criminal Liability
 Corporations may be held criminally liable
for actions of their officers, employees, or
agents.
 Corporate directors, officers, and
employees are personally liable for the
crimes they commit while acting on behalf
of the corporation.
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6 - 24
Constitutional Safeguards
 Fourth Amendment Protection Against
Unreasonable Searches and Seizures
 Fifth Amendment Privilege Against SelfIncrimination
 Fifth Amendment Protection Against Double
Jeopardy
 Sixth Amendment Right to a Public Jury Trial
 Eighth Amendment Protection Against Cruel and
Unusual Punishment
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6 - 25
Fourth Amendment Protection Against
Unreasonable Searches and Seizures
 The Fourth Amendment protects persons
and corporations from unreasonable
searches and seizures.
 Search warrants based on probable cause
are necessary in most cases.
 Warrantless search permitted in certain
situations
 Exclusionary rule
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6 - 26
Fifth Amendment Privilege Against
Self-Incrimination (1 of 2)
 The Fifth Amendment states that no
person “shall be compelled in any criminal
case to be a witness against himself”.
 Nontestimonial evidence
 Applies only to natural persons who are
accused of crimes
 Businesses cannot raise this protection
 Miranda rights
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6 - 27
Fifth Amendment Privilege Against
Self-Incrimination (2 of 2)
 Attorney-Client Privilege
A rule that states a client can tell his or
her lawyer anything about the case
without fear that the attorney will be called
as a witness against the client

There is no accountant-client privilege under
federal law
 Other privileges
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6 - 28
Fifth Amendment Protection
Against Double Jeopardy (1 of 2)
 The double jeopardy clause of the Fifth
Amendment protects persons from being
tried twice for the same crime.
 If the same criminal act involves several
different crimes, the accused may be tried
for each of the crimes with no double
jeopardy.
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6 - 29
Fifth Amendment Protection
Against Double Jeopardy (2 of 2)
 If the same act violates the laws of two or
more jurisdictions, each jurisdiction may
try the accused without violating the
double jeopardy clause.
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6 - 30
Sixth Amendment Right to a
Public Trial
 The Sixth Amendment guarantees certain
rights to criminal defendants:
To be tried by an impartial jury of the state or
district in which the accused crime was
committed
 To confront (cross-examine) the witnesses
against the accused
 To have the assistance of a lawyer
 To have a speedy trial

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6 - 31
Eighth Amendment Protection Against
Cruel and Unusual Punishment
 Cruel and Unusual Punishment – a
clause of the Eighth Amendment that
protects criminal defendants from torture
or other abusive punishment.
 This clause does not prohibit capital
punishment.
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6 - 32
Federal Antiterrorism Act of 2001
(1 of 2)
 In response to the events of September
11, 2001, Congress enacted a new
federal Antiterrorism Act.
 The act assists the government in
detecting and preventing terrorist activities
and investigating and prosecuting
terrorists.
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6 - 33
Federal Antiterrorism Act of 2001
(2 of 2)
 The act contains the following main
features:
Special Intelligence Court
 Nationwide Search Warrant
 Roving Wiretaps
 Sharing of Information
 Detention of Non-citizens
 Bioterrorism Provision
 Anti-Money Laundering Provisions

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