White Collar Crime Fall 2017 Outline
Federal Criminal Law Principles
a. White Collar Crime: it is illegal acts that use deceit and concealment (not force) rather than the application of threat of physical force or violence to obtain money, property, or services, to avoid the payment of or loss of money, or to secure a business or personal advantage.
b. The federal role:
limited resources should not be wasted in prosecuting inconsequential cases or only technical violations. Look at : criminal history, willingness to cooperate, seriousness of the offense, deterrent effect, probable sentences, willingness to cooperate.
no one was harmed, I’m an idiot (this is good b/c white collar crimes are specific intent crimes), prove it, these are ordinary business practices, it was technically truthful.
d. Collateral Consequences:
civil penalties, private liability, license revocation and professional discipline, bankruptcy, loss of status
2. International White Collar Crime
a. Federal Authority:
-Constitutional and Statutory
-Custody: Alvarez-Machain: SC said due process only goes to the borders of our country and we don’t care how you get into the country.
-extradition(??most countries don’t do it)
b. US v. Castle
This case is an example of the limit on jurisdiction
Foreign Corrupt Practices Act:
This Act does not apply to foreign officials. The statute does not mention it, it’s only illegal for US citizens to do the bribing, but not the foreign official to receive the payment. So what do you do? Charge them with conspiracy to violate it.
c. US v. Tarkoff
Charged under the money laundering statute. Lawyer hid money from client medicare fraud. Guilty under the money laundering statute, even though all transactions were outside the US.
d. Money Laundering
1. Knowing the money is from a form of unlawful activity
2. Financial Transaction: conducts or attempts to conduct
3. Proceeds from an unlawful activity: unlawful activity includes an offense against a foreign nation involving bribery of a public official.
4. Intent to conceal or disguise the nature, location, source, etc of the money.
b. Financial Transaction requirement: means a transaction which in any way or degree affects interstate or foreign commerce (THIS IS VERY BROAD); or using a financial institution which is engaged in or the activities of which affect interstate or foreign commerce.
c. Extraterritorial Jurisdiction: US has it if the conduct is by a US citizen OR if a non-citizen, if the conduct occurs in part in the US and the value is $10,000 +.
e. Wire Fraud
anything transmitted by means of wire, radio, or television communication in interstate or foreign commerce.
US v. Kim
In Europe double billed the UN. He says he’s innocent b/c all conduct outside the US. Conviction for wire fraud upheld b/c the wire transfer went through the US.
f. Arabian American Oil Presumption
Is that legislation of Congress, unless a contrary intent appears, is mean to apply only within the territorial jurisdiction of the US.
g. Sherman Antitrust Act
agreements in restraint of trade among the state or with foreign nations is illegal.
US v. Nippon Paper
Held: US can prosecute even though there was no conduct within the US.
i. See Last Slide
3. Statutory Interpretation
a.Intro: There are no federal common law crimes. They are only created by statute. Statutory interpretation is a defense to criminal charges. Two ways:
1. raise the intent element of the statute, to make proof more difficult
2. narrow the actus reus so it falls outside of the scope of the statute.
3. minimize the sentencing guidelines (they are based on real offense conduct: how much harm was done or how much gain d got.
So, any mistake will negate specific intent and a reasonable mistake will negate general intent.
b. Ratzlaf v. US
Casino debt case. Anti-structuring provision requires that D act willfully.
US v. Cheek: willfully requires proof of voluntary, intentional violation of a known legal duty.(tax law case)
Held: willfully requires proof here that the D knew the structuring was unlawful b/c currency structuring is not inevitably nefarious(now you only have to show purposeful evading)
c. Bronx Reptiles
‘Knowingly’ requirement includes consciously avoiding investigation of facts from which a reasonable person would have said needed investigating; then you can show avoidance and this equal knowledge.
d. US v. Dowling
Elvis bootlegger. Charged under the Interstate Transportation of Stolen Property Act. D won b/c his lawyer convinced the court that ‘property’ was needed for this statute and this was a copyright violation.
Elements of ITSP
1. transport in interstate or foreign commerce
2. goods, merchandise with a value of $5,000 pluls
. Brumley – focuses on the loss
Atty pays workers comp board member ‘loans’.
Rule: when you use the right of honest services in mail fraud, you need to show breach of a state law duty, that the state lost something. He must act contrary to the requirements of his job under state law, alleging just not honesty does not violate the statute.
Held: Conviction upheld: d violated his state law duty by taking compensation from those appearing before him.
d. Bloom – focuses on the gain
Chicago Alderman who is a lawyer told his client how to cheat at a tax sale, therefore depriving Chicago of the taxes due it. He breached his fiduciary duty to the city. The city lost what an honest employee would have done.
Rule: for right to honest services violation you have to show misuse of the office for private gain.
Held: he is not guilty, he didn’t gain anything.
5. Private Sector Fraud – Property
1346 right of honest services/mail fraud does apply in the private sector.
Basic insider trading – selling stock info out of the WSJ before it was published.
McNally says you have to be out property, not anything intangible
Held: the information is ‘property’ within the reach of the mail fraud statute. Confidential business information is valuable, and the D’s deprived them of their right to use it. Intangible property can be the subject of a scheme to defraud, and improper use, interfering with ownership can also be.
Lied on application for video poker machines, to get a license.
Held: licenses aren’t property, they are regulatory, so they are not guilty. The focus on property is it’s economic quality.Need direct economic value for it to be property.
Professional sports agent case – gov charged d with defrauding colleges out of their scholarship money that they paid to the athletes.
Rule: there has to be a link between the deception and the victim’s loss. The loss has to be more than a byproduct of the deception. The loss has to be from the victim.
Held: not guilty