WCC – CORNGOLD & SACK – SPRING 2017
WHITE COLLAR CRME — Generally
White collar crimes are generally motivated by illegal monetary or influential gain
Blurs the line between criminal and civil law
A WCC D testifying in his defense at a civil trial waives his 5th amend. privilege in a subsequent criminal proceeding
Criminal trial is a fruitful discovery opportunity for the civil P suing the criminal D
White collar crime does NOT include:
Crimes that necessarily involve the use or threat of physical force, either against the victim or the victim's property.
Whether a crime is “white collar” may sometimes depend upon the criminal means used, rather than the crime's statutory definition. For example, under the Hobbs Act, 18 U.S.C. § 1951, the crime of extortion may sometimes be white collar (when the defendant threatens the victim with economic harm), and sometimes may not be white collar (for example, when defendant threatens the victim with the use of physical force)
Offenses directly related to the possession, sale, or distribution of controlled substances.
Many narcotic offenses do not involve the use of force. They are excluded from “white collar crime” however because (a) there is a common perception that the “drug culture” often has a violent context, and (b) criminal investigations and prosecutions of these offenses are typically handled by specialized agencies, such as the U.S. DEA. On the other hand, the money laundering and tax offenses that focus on illegal proceeds of drug crimes are categorized as “white collar crime.”
Crime directly related to organized crime activities.
Organized crime can be nonviolent and, on the surface, conducted by “legitimate businesses.” It is excluded from white collar crime because (a) it often has a violent context, and (b) it is investigated and prosecuted by specialized law enforcement departments.
Crime directly related to certain national policy-driven areas such as immigration and civil rights.
These areas are considered specialized areas by law enforcement. Each raises a particular policy-driven issue specific to its context.
Common theft crimes and vice crimes.
Ordinary theft crimes and vice crimes are generally considered common street crimes and not “white collar” offenses. This generalization does not apply to fraud — which is criminalized in a variety of white collar contexts.
After excluding the crimes listed above, what remains is a broad, common-sense definition of white collar crime.
One definition is: non-violent illegal activities that principally use deceit, deception, concealment, fraud, or misrepresentation to obtain money, property, or some other advantage, or to conceal or cover up other wrongdoing.
Some civil cases fall within the category of “white collar.” Rules established in civil cases arising under such statutes as the securities laws and RICO also govern in criminal cases.
Differences between WCC and general street crimes
What conduct occurred?
Street crime
Generally, not difficult, once credible Ws are located to determine what conduct occurred (ie: the suspect shot the victim, the suspect stole a car)
WCC
It can be impossible to reconstruct what conduct occurred (ie: was money funneled out of the country?, was a bribe offered?)
Was the conduct a crime?
Street crime
Evidence of the physical injury makes it not difficult to determine whether the conduct is a crime (ie: suspect hit someone à assault, suspect killed someone à homicide)
WCC
Difficult to determine whether the identified conduct is even a crime at all
Procedure
Street crime
Little to no grand jury investigation prior to filing of formal charges
WCC
Generally, preceded by long periods of grand jury investigation
3 categories of WCCs
Fraud
Fraud crimes trick and deceive identifiable victims
However, it may be difficult to identify specific victims when there are multiple victims
Ex:
Mail Fraud
Honest Services
Insider Trading
Regulatory Offenses
These crimes violate statutory and regulatory schemes
NO identifiable victim
Ex:
Reporting Statutes
Combination of Fraud and Regulatory Offenses
Ex:
Tax Fraud
Mail Fraud
Honest Services
Securities Fraud
Conspiracy
Generally
Conspiracy often tends to be the prosecutorial vehicle for proving WCCs
WCC, similar to conspiracy, are committed by a jointly undertaken activity
In a WCC investigation, conspiracy is the evidentiary starting point for proving a WCC
Prosecutors will try to go after the little fish in the conspiracy to get to the bigger fish (ie: charge the secretary in an attempt to get her to snitch on the higher ups)
3 elements of conspiracy
Conspiracy to commit a crime
Conspiracy
An agreement between 2 or more people to commit a wrongful (civil) or illegal (criminal) act
Agreement itself is the crime
Conspiracy is a separate crime from the illegal act à D can be charged for BOTH
Agreement does NOT have to be formally expressed
Govt. only has to prove that an understanding to work together towards committing the crime existed
Prove beyond a reasonable doubt that there was a meeting of the minds
The agreement does NOT have to be successful (ie: the wrongful or illegal act is not ultimately committed)
Ex: D was a L who was friends w/Pres. Reagan’s Counselor. D agreed to help Wedtech Corp. in obtaining govt. Ks AFTER he was elected to a DOJ position. Wedtech paid D $150K and $300K and required that he write and sign a letter stating that he received the money as compensation for his services in Wedtech’s acquisition of a property (these are the overt acts). The govt. charged D with conspiracy to violate a federal fraud statute which required that the intended recipient of compensation for services be an officer of the US. D argued that at the time he made the agreement w/Wedtech he was not an official of the US and therefore it was impossible for him to conspire to violate the statute – US v. Wallach
Court held that the relevant question is ‘whether the conspirators subjectively believed that the conditions necessary for obtaining the objective were likely to be fulfilled.’
Focus is the actual intent of the parties to the conspiracy à the non-occurrence of the illegal act does NOT protect the D from the sep
that “George” (1st name of D) wanted the killing done while he was in Asia; and D4 told D3 that “George” would pay whatever it took. D argued that the statements of D2 and D4 should not have been admitted into evidence – US v. Lindemann
Court held that the statements and the corroborating evidence was sufficient to qualify for the hearsay exception.
Court offered the following corroborating evidence to establish the conspiracy:
D was in Asia on the day that D4 told D3 that D would be in Asia and this is the same day the horse was killed
The horse was scheduled to travel to Florida the next day
Phone calls among the various conspirators
D lied and ordered his EEs to lie to insurance co. regarding the horse
D had motive to kill the horse b/c he was the only to one really benefit from its death
Mail Fraud
Generally
Mail fraud statute, 18 USC 1341, is the Louisville Slugger in the federal prosecutor’s arsenal
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations or promises for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier or takes or receives therefrom, any such matter or thing shall be fined under this title or imprisoned not more than 5 years or both. If the violation affects a financial institution, such person shall be fined under this title or imprisoned not more than 30 years, or both. – Mail Fraud Statute,18 USC 1341
Wire Fraud State, 18 US 1343, was designed to protect the instrumentalities that bring the nation together
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both – Wire Fraud Statute, 18 US 1434
