CORPORATE AND INDIVIDUAL RESPONSIBILITY
I. Corporate Liability
Tort theory of liability à acts of an agent done for the benefit of the principal and within scope of employment are imputed to the principal.
B. “For the Benefit”
a. A corp cannot “knowingly violate” a stat through activities of unfaithful servants whose conduct was undertaken to advance the interests of parties other than their corporate employer.
a. A corporation is liable under the Sherman Act for the acts of its agents within the scope of their employment, even though the acts are contrary to corporate policy and express instructions to the agent, because the benefit goes to the corporation, not the agent.
C. Restricting Corporate Criminal Liability
1. Respondeat Superior & VL Approach
a. Tort law’s purpose is to allocate loss to the party more able to bear it – not the purposes of retribution, deterrence, prevention, and rehabilitation purposes of crim law
2. Model Penal Code (high managerial agent theory)
High managerial agent: an officer or any other agent having duties of such responsibility that his conduct may fairly be assumed to represent the policy of the corporation.
a. A corporation may be convicted if:
i. violates a stat with a legislative purpose to impose liability on corporations
ii. omission to discharge a specific duty or affirmative performance imposed on corps by law
iii. offense was authorized…or recklessly tolerated by the BOD or a high managerial agent
b. DEFENSE = E by preponderance of E of due diligence to prevent the act
1. Collective Knowledge
a. US v. Bank of New England (1987): A corporation’s knowledge is the sum of the knowledge of all of the employees.
II. Individual Responsibility
A. Responsible Corporate Officer Doctrine
1. G must show: D had, by reason of his position in the corp, responsibility and authority either to prevent or promptly correct the violation, and he failed to do so.
2. Defense: D was “powerless” to prevent or correct the violation.
a. Duty not only to seek out and remedy violations, but also a duty to implement measures that will insure that violations will not occur.
b. D must have:
i. a responsible relation to the situation and
ii. by virtue of his position,
iii. authority and responsibility to deal with the situation
PRINCIPLES OF STATUTORY INTERPRETATION
1. A statutory term is generally presumed to have its common law meaning.
I. The Mens Rea Element
A. Willfulness
1. Elements:
a. D acted with knowledge
b. unlawful conduct
2. Defense:
a. good faith reliance on advice of counsel
b. good faith belief that one is not violating the law
3. Jury may draw reasonable inferences from E of D’s conduct.
4. 1994 Amendment: D need only have the intent to conduct the unlawful act.
B. Exception: Ignorance
1. Rule: Ignorance of the law does not excuse.
2. Exception: Good Faith Reliance on Counsel
a. A good faith belief that one is not violating the law negates willfulness.
b. Elements to establish an Advice of Counsel Defense:
i. before taking action
ii. he in good faith sought the advice of an attorney whom he considered competent
iii. for the purpose of securing advice of the lawfulness of his possible future conduct
iv. and made a full and accurate report to his attorney of all material facts which the D knew
v. and acted strictly in accordance with the advice of his attorney who had been given a full report
C. Reading in a Mens
another of the intangible right of honest services.
1. Cleveland v. US (2000) – State and municipal licenses do not constitute property, because the state’s core concern is regulatory.
IV. Intent
A. Elements:
1. deceit/misrepresentation
+
2. contemplated injury to the V
B. The scheme need not be successful or complete, therefore injury to V not required.
D. Intent to Cause Economic Harm
1. US v. Welch (2003): Intent to defraud does not depend on intent to gain, but rather on intent to deprive.
V. Materiality
A. Neder v. US (1999): Materiality of falsehood is an element of Mail Fraud.
VI. Mailing
A. Need:
1. mailing by the D
2. or caused to be mailed by the D
B. FedEx, UPS, etc. included.
VII. In Furtherance (the Nexus between Scheme and Mail)
1. A mailing is in furtherance if it is “part of the execution of the scheme” as conceived by the perpetrator at the time, regardless of whether the mailing later proves to have been counterproductive.
3. Dissent: Creates mail + fraud requirement, rather than requiring a nexus.
VIII. Wire Fraud and Other Frauds
1. Confidential information may constitute intangible “property” and its unauthorized use or dissemination may deprive the owner of its property rights.
RICO
i. In a CIVIL RICO action, no requirement that the D previously criminally convicted of the predicate offenses that constitute the pattern of racketeering or the RICO violation itself.
