The Legal Environment of BusinessFINA 2244 Christina Sheppard Futrell, Esq.Chapter Five:Criminal Law and BusinessI. Crime Categories- Crimes are violations of the law. They may be positive or negative.A. Felony- Serious crimes generally punishable by more than one year in prison.B. Misdemeanors- Lessor crimes that may be punishable by fines or less than one year in prison.II. Crimes and Elements of Crime- To be convicted of a crime, the prosecution must prove beyond a reasonable doubt that a crime was committed and that the perpetrator had the necessary state of mind.A. Intentional Crimes- 1. A Criminal Act was Committed- An actus reus is the act of performing a wrongful deed. 2. That the Perpetrator had the Necessary Intent or State of Mind- The mens rea is the criminal intent that must be established, the showing of the wrongful purpose in the crime that was committedB. Criminal Negligence- Results when a crime is committed that is not necessarily intentional but that is a result of not acting with the reasonable care that is expected under the circumstances.1. Miranda- Persons accused of a crime, or held in suspicion of a crime, must be informed of their rights under the Fifth Amendment:a. Right to remain silent-b. Right to be Represented by Counsel-c. That any statement they Make can be Used against them as Evidence at Trial-2. Defenses-a. Statute of Limitations- Is the time frame set by statute by which a crime must be prosecuted. If the statute of limitations has run on a crime it cannot be prosecuted. Statutes of limitation may toll under certain circumstance,i.e., this means that clock stops running. The crime may still be eligible for prosecution although technically that time frame has expired.The Legal Environment of BusinessFINA 2244 Christina Sheppard Futrell, Esq.b. Affirmative Defense- Is based on the premise that even if the prosecution’s claims are true, there are other facts that make the act not a crime.c. Entrapment- When law enforcement sets up a trap to lure one into committing a crime that they otherwise would nothave committed.3. Evidence-a. Chain of Custody- Prosecution must show a chain of custody of the evidence from the time it was collected until trial. Who handled the evidence, where was it located etc. b. Exclusionary Rule- Prosecution cannot introduce evidence that was obtained as a result of an inappropriate search and seizure. This applies to any evidence subsequently located as a result of improperly obtained evidence. c. Warrant- Is a document issued by a judge that allows law enforcement to search and confiscate property that may be used as evidence in a criminal proceeding.d. Probable Cause- Law enforcement must show that they have reasonable grounds, based on what they know to believe a person should be searched or arrested. III. Prosecution Process-A. Arraignment- Is the formal reading of a criminal complaint against in the presence of the defendant to inform him or her of the charge. Here the defendant is advised of his or her rights, advised of the crime for which he or she has been charged and the defendant may enter a plea.1. Guilty-2. Not Guilty-3. Nolo Contendere- or a plea of no contest. The defendant does not specifically admit or deny the charges. However, a plea of nocontest is generally treated as a guilty plea.B. Discovery-1. Exculpatory Evidence- Evidence that may show the defendantis not guilty.C. Trial-The Legal Environment of BusinessFINA 2244 Christina Sheppard Futrell, Esq.1. Double Jeopardy- prevents a defendant from being tried a second time for the same grime. IV. White Collar Crime-A. Antitrust- Refers to anticompetitive crimes such as price fixing, bid rigging, and procurement fraud.B. Bankruptcy Fraud- When a business or individual conceals assets in a bankruptcy proceeding.C. Bribery- The offer of or taking of money, goods, services, or other things of value to influence official actions or decisions.D. Counterfeiting- The copying of a genuine item without authorization, especially when it is passed off for the genuine item.E. Credit Card Fraud- The unauthorized use of a credit card to obtain goods, services or cash.F. Computer and Internet Fraud- The unauthorized use of computers and computer files to fraudulently access financial accounts.G. Economic Espionage- The theft or misappropriate of valuable business information such as a trade secret.H. Embezzlement- When someone is in a position of trust with money or other valued property and they take it for their own use.I. Environmental Law Violations- Violations of environmental statutes and/or regulations.J. Financial Fraud- Fraud in lending, financial documents, mortgages, etc. committed by banks and other financial institutions or by their employees.K. Government Fraud- Fraud in obtaining government subsidies, contracts, etc.L. Healthcare Fraud- Fraud in obtaining healthcare, healthcare supplies or healthcare related products.M. Insider Trading- Fraudulent activities in connection with the offer, purchase, or sale of securities.N. Insurance Fraud- Fraud in obtaining insurance proceeds or by insurers in charging higher rates than allowable.O. Mail Fraud- Fraud committed when one uses the mail in a scheme to obtain money or property by false pretenses. P. Money Laundering- Hiding the truth about the origins of money.The Legal Environment of BusinessFINA 2244 Christina Sheppard Futrell, Esq.1. Business Implications-2. Elements of Control within Business-a. Identify the Beneficial Owner of Assets-b. Trace the Transmission of Assets-c. Report Suspicious Transactions-3. Consequences of Non-Compliance- May result in civil penalties up to the grater of the amount involved in a transaction or criminal penalties including a fine of up to $250,00 or five years in prison.Q. RICO- A pattern or illegal activity, such as bribery or extortion, which is part of an enterprise controlled by those engaged in theillegal activity. In the modern context, RICO includes mail fraudand other illegal activities. R. Securities Fraud- Violations of the securities law, including dipping into client accounts, market rigging etc.S. Tax Evasion- Not paying your taxes, i.e., not reporting all income, not filing, or overstating expenses. T. Telephone and Telemarketing Fraud- Any scheme to defraud in which the perpetrator uses the telephone as the primary means of communicating with victims.U. Wire Fraud- Much like mail or telephone fraud. Applicable if any