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White Collar Crime
Villanova University School of Law
Chanenson, Steven L.

Corporate & White Collar Crime
Outline – Spring 2011
Professor Chanenson
I. OVERVIEW OF WHITE COLLAR CRIME                                                                                                    Chapter 1
A. Introduction
1.        White collar crime in the news bc so many high profile defendants
2.        Causes enormous harm – e.g. savings & loan industry collapsed and thousands of investors lost their life savings.
3.        Most significant WCC prosecutions occur at the federal level – this is our focus
4.       Commonly understood idea about WCC is that it’s “nicer” than street  crime
a.        Somehow less significant; less serious
b.       However this view is being changed & with good reason
5.        Element of Intent – VERY important in WCC
6.       Annual loss in excess of $40 billion from fraud
7.        One of the fastest growing legal specialties in the US
B. Defining White Collar Crime
1.         WCC offenses include non violent offenses that lead EITHER to:
a.        ECONOMIC HARM (e.g. mail/wire fraud, securities fraud, and financial crimes) –OR-
b.       HARM TO THE GOVT’S ABILITY TO FUNCTION effectively without conflicts of interest (e.g. perjury, false statements, obstruction of justice, currency transaction violations)
2.        WCC does NOT include
a.        Crimes that necessarily involve or use threat of physical force, either against the victim or the victim’s property
b.       Offenses directly related to the possession, sale, or distribution of controlled substances
c.        Crime directly related to organized crime activities
d.       Crime directly related to certain national policy-driven areas such as immigration and civil rights
e.       Common theft crimes & “vice” crimes
3.        Note – white collar crime isn’t just rich people; can be done by people of lower social statuses as well (e.g. tax fraud)
4.       WCC is different from street crime in important ways
a.        Facts difficult to reconstruct in WCC
                                                   i.      In street crime its easier to reconstruct a crime scene
                                                  ii.      In white collar crime the “scene” is not so concrete
b.       May be difficult to determine if a white collar crime was committed at all
                                                   i.      In street crime, it’s pretty clear a crime occurred once you know what happened factually – there’s an easily definable harmed person, etc.
c.        WCC is “Mala Prohibita” – wrong because we say it’s wrong
                                                   i.      Street crime is “Mala Insee” (“bad in itself”)
d.       WCC Statutes are Vague & “Squishy”
                                                   i.      Court will later decide something isn’t a crime even though it once was
                                                  ii.      May different definitions of common words
                                                iii.      Many dangers associated with vague statutes:
1.        Uncertainty
2.        Over-deterrence of behavior that should be allowed and even encouraged from competitive stand point – we don’t want to hinder productive corporate activity in a free market system. Over criminalization may make people too wary.
3.        Fairness
4.       Questions of intent – strict liability? Shifting definitions of the word “willfulness”
e.       Methods of Investigation may differ
                                                   i.      In WCC, there can be months/years of investigation by grand juries under direction of prosecutions in conjunction w/ law enforcement.
                                                  ii.      Especially at federal level where resources are more available
C. Recurring Issues in White Collar Investigation
1.         Criminalization
a.        Determining when its appropriate to label conduct “criminal”
b.       When should society subject defendant to full force of criminal law instead of civil and/or admin remedies?
c.        Arguments that its often not appropriate to criminalize complex economic & business activities for two reasons:
                                                   i.      Such activities are morally ambiguous and may not deserve the full condemnation of criminal law; and
                                                  ii.      Criminal statutes designed to cover such matters are often flawed, in large part bc economic crimes are difficult to define.
2.        Distinguishing Civil & Criminal Liability
a.        PROF. COFFEE on increased criminalization of certain areas of law (1991):
                                                   i.      What’s the proper role of the criminal law? Has it lost its “condemning” power?
                                                  ii.      Disappearing line between criminal law and civil law
                                                iii.      This blurring results in injustice and ultimately will weaken the efficacy of the criminal law as an instrument of social control.
                                                iv.      The factor that MOST distinguishes criminal law from civil law is its operation as a system of moral education and socialization.
1.        Crim law is obeyed not simply bc there is a legal threat underlying it but bc the public perceives its norms to be legit & deserving of compliance.
2.        Crim law is a system for public communication of values
3.        Thus while tort law seeks to balance private benefits & public costs, the crim law does not possibly bc balancing would undercut moral rhetoric of the crim law.
                                                  v.      As we proceed, helpful to ask whether the particular criminal statute or prosecution serves the goals articulated by Prof. Coffee. 
1.        Does the conduct merit criminal sanction?
2.        What

o commit an illegal/wrongful act
                                                   i.      Doesn’t need to be an official agreement – can be inferred; an informal, ad-hoc understanding
                                                  ii.      Can be shown by taking all facts into consideration – like a mosaic
b.       INTENT to commit the illegal or wrongful act or that one of the co-conspirators commit the wrongful act
c.        Commission of at least one OVERT ACT by at least one co-conspirator in furtherance of the conspiracy
                                                   i.      Overt act can be almost anything – doesn’t need to be criminal itself (can in fact be perfectly lawful like checking bank hours)
                                                  ii.      Bank robbery – overt act is checking what time bank closes. Can be small.
                                                iii.      Co-conspirators are agents of each other so overt acts are attributable to all
B. Prosecutorial Advantages to a Conspiracy Charge
1.         Conspiracy as a Separate Offense
a.        If you rob a bank with a co-conspirator, you can be charged for bank robbery & for conspiring to commit bank robbery.
2.        Birds of a Feather Flock Together – easier job for the prosecutors
a.        More likely to get a conviction
b.       Easier to prove culpability if you can show a group of people acting together; show D acting as part of greater operation
c.        Most likely going to be some finger-pointing and prosecutor will easily get Ds to turn against each other.
d.       Conspiracy charges permits joinder of co-Defendants’ cases for trial
                                                   i.      If weak evidence against one defendant, throw him in with the others and charge them all with same conspiracy. 
3.        Jury Benefits
a.        Jury less likely to feel sympathy toward D when there is more than one
b.       Won’t feel bad for the “poor likely defendant”
4.       Conspiracy is an Inchoate Crime
a.        Can be charged before it comes to fruition
b.       Conspiracy can be charged where there is an agreement and no actual overt harm or act.
c.        Not necessary to wait for the criminal conduct to be complete before arresting and charging conspirators
d.       You can charge even before you’d be allowed to charge attempt.