Essentials of Business Law 6th Edition Beatty Solutions Manual

Essentials of Business Law 6th Edition
Beatty Solutions Manual

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Chapter 7
CRIME
Unit 1 – The Legal Environment
Chapter 7 – Crime*
Chapter Overview
Chapter Theme
Criminal behavior extends far beyond the street crime that is fodder for television dramas—white collar
crime has a greater economic impact than street crime. Criminal law differs in important ways from civil
law, the subject of most of the text: the state prosecutes the wrongdoer, the wrongdoer can face lengthy
imprisonment or death, and rights embedded in the Constitution protect individuals accused by the state
of criminal behavior.
Approaching Criminal Law

Criminal law is a popular topic. Students have been exposed to it, primarily through media, for most of
their lives. Their knowledge and interest tend to focus on street crime. The text introduces a balanced
view, spending a number of pages on crimes that harm business and crimes committed by businesses.
When we think of crime, we imagine drug dealers and ban robbers; we do not think of corporate
executives sitting at polished desks. While “street crimes” are serious threats, they take second place to
white-collar crime, which costs society tens of billions of dollars annually.
Criminal law is a balancing act between making society safe and protecting us all from false accusations
and unfair punishment.
Guilty: A judge or jury’s finding that a defendant has committed a crime.
Criminal Procedure: The process by which criminals are investigated, accused, tried, and sentenced.
This chapter has three parts:
• Criminal procedure
• Crimes that harm businesses
• Crimes committed by businesses
7-1 Criminal Procedure

7-1 a Civil versus a Criminal Case
Criminal law: Prohibits and punishes conduct that threatens public safety and welfare.
Prosecution
Although a crime may give the victim a right to sue in civil court, only the government can prosecute a
crime and punish the perpetrator by sending him to prison. The government may also impose a fine, but
it keeps the fine and does not share it with the victim.
Burden of Proof
Beyond a reasonable doubt: The very high burden of proof in a criminal trial, demanding much more
certainty than required in a civil trial.
*Some footnotes added for reference; some footnotes appear in text only.
Chapter 7 Crime 2
In a civil case, the plaintiff must prove her case only by a preponderance of the evidence. But because the
penalties for conviction in a criminal case are so serious, the government must prove its case beyond a
reasonable doubt.
Right to a Jury
Bench trial: There is no jury; the judge decides the case.
A judge or jury decides the facts of a case. A criminal defendant has a right to a trial by jury for any charge
that could result in a sentence of six months or longer. The defendant may demand a jury trial or may
waive that right, in which case the judge will be the fact finder.
Felonies and Misdemeanors

Felony: A serious crime, for which a defendant can be sentenced to one year or more in prison.
Misdemeanor: A less serious crime, often punishable by less than a year in a county jail.
Restitution: A court order that a guilty defendant reimburse the victim for the harm suffered.
A felony is a serious crime, for which a defendant can be sentenced to one year or more in prison. Murder,
robbery, rape, drug dealing, money laundering, wire fraud, and embezzlement are felonies. A
misdemeanor is a less serious crime, often punishable by a year or less in a county jail. Public drunkenness,
driving without a license, and simple possession of one marijuana cigarette are considered misdemeanors
in most states.
Other than prison time, a court can also impose a fine that the government keeps and does not share with
the victim. It can order restitution, meaning that the defendant reimburses the victim for harm suffered.
The government can also limit the rights of convicted criminals in a surprisingly broad manner.
7-1b Conduct Outlawed

Crimes are created by statute (federal and state). The language of criminal statutes must be clear and
definite enough so that:
1. ordinary people can understand what conduct is prohibited, and
2. enforcement cannot be arbitrary and discriminatory
Case: Skilling v. United States1

Facts: Jeffrey Skilling was president and chief operating officer of Enron Corporation, the seventh largest
company in America in terms of revenue. At least, that is what everyone thought. Ten months into
Skilling’s term of office, Enron filed for bankruptcy protection. Its stock, which had been trading at $90
per share, became virtually worthless. A government investigation discovered that company executives
had conducted an elaborate conspiracy to prop up Enron’s stock price by overstating the company’s
finances.
1
561 U.S., 130 S. Ct. 2896 United States Supreme Court, 2010
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Chapter 7 Crime 3
Skilling was charged with a theft of honest services. Traditionally, this federal statute had been used to
prosecute public officials who took bribes or kickbacks. But then prosecutors began to charge employees
under this statute for having generally breached their duty to their employer—and that is what they
decided to do with Skilling. They alleged that his financial shenanigans constituted a theft of honest
services. He was convicted, sentenced to more than 24 years in prison, and ordered to pay $45 million in
restitution. Skilling appealed, arguing that the honest services statute was unconstitutionally vague. The
Fifth Circuit disagreed and affirmed his conviction. The Supreme Court granted certiorari.
Issue: Was the honest services statute unconstitutionally vague?
Excerpts from Justice Ginsburg’s Decision: To satisfy due process, a penal statute must define the
criminal offense [1] with sufficient definiteness that ordinary people can understand what conduct is
prohibited and [2] in a manner that does not encourage arbitrary and discriminatory enforcement.
According to Skilling, [the honest services statute] meets neither of the two due process essentials. First,
the phrase “the right of honest services,” he contends, does not adequately define what behavior it
bars. Second, he alleges, [the honest services statute’s] standardless sweep allows policemen,
prosecutors, and juries to pursue their personal predilections, thereby facilitating opportunistic and
arbitrary prosecutions.
In the main, prosecutions under this statute involved fraudulent schemes to deprive another of honest
services through bribes or kickbacks. Confined to these paramount applications, [the honest services
statute] presents no vagueness problem. The Government urges us to go further by locating within [this
statute’s] compass another category of proscribed conduct: “undisclosed self-dealing by a public official
or private employee”—i.e., the taking of official action by the employee that furthers his own
undisclosed financial interests while purporting to act in the interests of those to whom he owes a
fiduciary duty.
Reading the statute
to proscribe a wider range of offensive conduct, we acknowledge, would raise the due process concerns
underlying the vagueness doctrine. To preserve the statute without transgressing constitutional
limitations, we now hold that [the honest services statute] criminalizes only the bribe-and-kickback core.
The Government did not, at any time, allege that Skilling solicited or accepted side payments from a
third party in exchange for making these misrepresentations. It is, therefore, clear that Skilling did not
commit honest-services fraud.
Question: What was Skilling’s argument?

Answer: That §1346 should be declared unconstitutional for vagueness.
Question: What is the Court’s response?
Answer: The Court agreed that in its current state, §1346 was unconstitutionally vague; however,
rather than invalidating the statute altogether, the Court limited the statute’s permissible reach. The
Court declared a “new definition” of honest services fraud as including only (1) bribery and (2)
kickback schemes. This new definition excluded such corporation actions as nondisclosure of a conflict
of interest, and general self-dealing.
7-1c State of Mind

Guilty: A judge or jury’s finding that a defendant has committed a crime.
Chapter 7 Crime 4
Voluntary Act
Voluntary Act: a defendant is not guilty of a crime if she was forced to commit it; she is not guilty if she
acted under duress. However, the defendant bears the burden of proving by a preponderance of the
evidence that she acted under duress.
Entrapment
Entrapment: When the government induces the defendant to break the law, the prosecution must prove
beyond a reasonable doubt that the defendant was predisposed to commit the crime.
Conspiracy
Conspiracy: If the police discover a plot to commit a crime, they can arrest the defendants before any
harm has been done. A defendant can be convicted of taking part in a conspiracy if:
• a conspiracy existed,
• the defendants knew about it, and
• some members of the conspiracy voluntarily took a step toward implementing it.
7-1d Gathering Evidence: The Fourth Amendment

Warrant: Written permission from a neutral officer to conduct a search.
Probable cause: It is likely that evidence of crime will be found in the place to be searched.
The Fourth Amendment to the Constitution prohibits the government from making illegal searches and
seizures of individuals, corporations, partnerships, and other organizations. The goal of the Fourth
Amendment is to protect the individual from the powerful state.
Warrant
As a general rule, the police must obtain a warrant before conducting a search. The warrant must specify
with reasonable certainty the place to be searched and the items to be seized. If the police search without
a warranty, they have, in most cases violated the Fourth Amendment. But even a search conducted with
a warrant violates the Fourth Amendment if:
• There was no probable cause to issue the warrant;
• The warrant does not specify with reasonable precision the place to be searched and the things
sought; or
• The search extends beyond what is specified in the warrant
The magistrate will issue a warrant only if there is probable cause. Probable cause means that, based on
all of the information presented, it is likely that evidence of a crime will be found in the place to be
searched.
Searches without a Warrant
There are seven circumstances under which police may search without a warrant:
• Plain View.
• Stop and Frisk.
• Emergencies.
• Automobiles.
• Lawful Arrest.
• Consent.
• No Expectation of Privacy.
Chapter 7 Crime 5
Technology and social media have created new challenges for the courts in determining what is a
reasonable expectation of privacy. For example:
• DNA Tests.
• Heat Seeking Devices.
• Digital Cameras.
• Cellphones.
• Computers.
• Email.
• Websites.
• Chats.
• Social Media.
• GPS Tracking.
Case: Rodriguez v. United States 135 S. Ct. 1609 United States Supreme Court, 2015
Facts: Driving along the Nebraska State Highway just after midnight, Dennys Rodriguez briefly swerved
onto the highway shoulder, which is a violation of Nebraska law. At 12:06 a.m., Officer Morgan Struble
pulled Rodriguez over for erratic driving. Struble questioned both Rodriguez and his passenger and ran a
records check on the car registration and their drivers’ licenses. Struble gave Rodriguez a warning ticket.
At 12:27 a.m., Struble finished explaining the warning to Rodriguez and returned the documents to the
two men. He then asked permission to walk his police dog around Rodriguez’s vehicle, but Rodriguez said
no. On the officer’s instructions, Rodriguez exited the vehicle. At 12:33 a.m., Struble led the dog twice
around the SUV. During the second circuit, the dog signaled the presence of drugs. After searching the
car, Struble found methamphetamine, an illegal drug.
At trial, Rodriguez argued that the dog sniff was illegal because Struble had effectively conducted a stop
and frisk after the traffic stop was over. But Struble did not have a clear and specific reason to suspect
criminal activity for a legal stop and frisk. Both the trial court and the appellate court disagreed with
Rodriguez. The Supreme Court granted certiorari.
Issue: Was the dog sniff legal?
Excerpts from Justice Ginsburg’s Decision:

A seizure for a traffic violation justifies a police investigation of that violation. The seizure remains lawful
only so long as unrelated inquiries do not measurably extend the duration of the stop. An officer, in other
words, may conduct certain unrelated checks during an otherwise lawful traffic stop. But he may not do
so in a way that prolongs the stop, absent the reasonable suspicion ordinarily demanded to justify
detaining an individual.
Beyond determining whether to issue a traffic ticket, an officer’s mission includes ordinary inquiries
incident to the traffic stop. Typically, such inquiries involve checking the driver’s license, determining
whether there are outstanding warrants against the driver, and inspecting the automobile’s registration
and proof of insurance. These checks serve the same objective as enforcement of the traffic code:
Chapter 7 Crime 6
ensuring that vehicles on the road are operated safely and responsibly. A dog sniff, by contrast, is a
measure aimed at detecting evidence of criminal wrongdoing.
Traffic stops are especially fraught with danger to police officers, so an officer may need to take certain
negligibly burdensome precautions in order to complete his mission safely [such as asking the driver to
exit the car. But] the dog sniff could not be justified on the same basis. Highway and officer safety are
interests different in kind from the Government’s endeavor to detect crime in general or drug trafficking
in particular.
For the reasons stated the case is remanded for further proceedings consistent with this opinion.
Question: What are some ordinary inquiries incident to a traffic stop?

Answer: checking driver’s licenses, determining whether there are any outstanding warrants against
the driver, and inspecting the automobile’s registration and proof of insurance.
Question: Is it legally permissible for an officer to make unrelated inquiries pursuant to a traffic stop?
Answer: Yes, as long as they do not extend the duration of the stop.
Question: Was the officer in reasonable fear for his safety?
Answer: No, no threat was apparent.
Question: Do you agree with the Supreme Court’s decision in this case?
Answer: Answers will vary.
Bonus Case: United States v. Jones 2
Facts: The Washington, D.C. police suspected Antoine Jones of being a drug dealer. Without a valid search
warrant, they attached a GPS tracking device to his car. For 28 days, they used the GPS to determine his
whereabouts. Based on this evidence, Jones was convicted of a conspiracy to deal cocaine and was
sentenced to life in prison. The appellate court reversed his conviction on the grounds that the police
should have obtained a warrant before attaching the GPS. The Supreme Court granted certiorari.
Issue: Was the warrantless use of a GPS an illegal search under the Fourth Amendment?
Excerpts from Justice Scalia’s Decision:

The Fourth Amendment provides in relevant part that “[t]he right of the people to be secure in their
persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated.”
It is beyond dispute that a vehicle is an “effect” as that term is used in the Amendment.
The Government physically occupied private property for the purpose of obtaining information. We have
no doubt that such a physical intrusion would have been considered a “search” within the meaning of the
Fourth Amendment when it was adopted. [F]or most of our history the Fourth Amendment was
understood to embody a particular concern for government trespass upon the areas (“persons, houses,
papers, and effects”) it enumerates. The judgment of the Court of Appeals for the D.C. Circuit is affirmed.
Question: What language does a car fall under within the text of the Fourth Amendment?
Answer: An “effect.”
2
132 S. Ct. 945 United States Supreme Court, 2012
Chapter 7 Crime 7
Question: For what purpose did the Government physically occupy private property in this case?
Answer: The purpose of obtaining information.
Exclusionary Rule
Exclusionary Rule: Evidence obtained illegally may not be used at trial.
Under the exclusionary rule, evidence obtained illegally (or any information obtained as a result of this
illegal behavior) may not be used at trial.
Discussion: Exclusionary Rule

Many people have a fundamental conceptual problem with understanding the exclusionary rule: it only
applies to incriminating evidence. They would, presumably, support a (non-sensical) rule that excluded
non-incriminating evidence seized during an illegal search, but they believe that if incriminating evidence
is found, how can a search be illegal? It would, of course, serve no constitutional purpose to exclude from
trial evidence that has no bearing on a defendant’s guilt. The issue is to help those who stumble over this
fact understand why courts created the exclusionary rule. One can start by not calling an illegal search a
“technical violation” or “technical mistake.” We do not consider government’s seizure of a private
residence without compensation to be a technical violation of the due process clause, or banning of
peaceful political speech to be a technical violation of the First Amendment.
Question: How can it possibly make sense to exclude legitimate evidence because a police officer made a
mistake in getting a warrant? Aren’t we letting the criminal go free because the constable blundered?
Answer: The Supreme Court has created the exclusionary rule as a judicial remedy to protect all citizens
from potential police abuse. The theory is that if the police know in advance that illegally seized evidence
cannot be used at trial, they will have no motive to obtain such evidence, and will go about their
investigations lawfully.
Question: Does the Supreme Court think that all police want to abuse the average citizen?
Answer: No. What the court has said, by crafting the rule, is that one of the most valuable things there
is about living in a democratic society is the ability to live without fearing the police. We should be able
to sleep at night without worrying that our doors will be smashed in.
Question: I haven’t done anything wrong and am not worried about the police “smashing in my doors in
the middle of the night.” Why should I care about the exclusionary rule?
Answer: There’s a saying—”A liberal is a conservative who has just been arrested; a conservative is a
liberal who has just been mugged”—that, while obviously painting with overbroad strokes, contains an
important kernel of truth. Our relationship to the criminal justice system and our rights as citizens tend
to be grounded on personal experiences. Citizens of the United States, who live under the protection of
a Constitution that guarantees certain individual liberties from governmental intrusion, should not pick-
and-choose which Constitutional guarantees they will support.
Question: The difference between a lawful search or arrest and an unlawful one is often a warrant. What
is so special about a warrant?
Answer. The warrant requirement means that the police must obtain the permission of a neutral person
before conducting most searches or making most arrests. Because the police are charged with
responsibility to investigate crimes, they may have a vested interest in conducting investigations as
aggressively as possible. The warrant requirement means that someone who has no personal interest in
the investigation must first be convinced that there is probable cause to search some premises or make
an arrest.
Question: What might happen if there was no requirement for probable cause?
Answer: For example, police might reason that a certain percentage of students at a large university use
illegal drugs, and that therefore it would be profitable to stake out the campus and search everyone who
Chapter 7 Crime 8
enters it. Even if only a tiny percentage of students are carrying drugs, it might prove a good way to catch
criminals. The problem is that all of the innocent people would be forced to endure periodic searches.
Question: What is wrong with being searched if you don’t have anything to hide?
Answer: Being searched is—by definition—invasive. Some people might not mind it, but there are many
who do not want to feel that they live in a police state. Also, to allow police to search without a warrant
is to give them tremendous power, which some officers might abuse. For example, a particular policeman
might choose to search only minorities, or women, or students, or those living in a particular
neighborhood. Ours is supposed to be a society regulated by law, not by personal, police power.
Question: How many people go free because of the exclusionary rule?
Answer: Very few. As the text reports, most studies have shown that less than 1 percent of those
prosecuted go free because evidence is excluded. Courts deny the great majority of motions to suppress,
and in those few cases where they are allowed, the prosecution generally has additional evidence
sufficient to convict.
There are three exceptions to the exclusionary rule:

• Inevitable Discovery
• Independent Source
• Good Faith Exception
7-1e After Arrest

The Fifth Amendment
The Fifth amendment to the Constitution protects criminal defendants – both the innocent and the guilty
– in several ways:
Due Process: Requires fundamental fairness at all stages of the case.

Due Process – In the context of criminal law, due process sets additional limits. The requirement that the
prosecution disclose evidence favorable to the defendant is a due process rule. Similarly, if a witness says
that a tall white male robbed the liquor store, it would violate due process for the police to place the male
suspect in a lineup with four short women of color.
Self-Incrimination - The Fifth Amendment bars the government from forcing any person to testify against
himself. In other words, the police may not use mental or physical coercion to force a confession or any
other information out of someone.
Miranda Rights - The police cannot legally force a suspect to provide evidence against himself. But
sometimes, under forceful interrogation, he might forget his constitutional rights. In the following
landmark case, the Supreme Court established the requirement that police remind suspects of their rights
– the very same ones that we have all heard so many times on television shows.
Landmark Case: Miranda v. Arizona3

Facts: Ernesto Miranda was a mentally ill, indigent citizen of Mexico. The Phoenix police arrested him
at his home and brought him to a police station, where a rape victim identified him as her assailant.
Two police officers took him to an interrogation room but did not tell him that he had a right to have
a lawyer present during the questioning. Two hours later, the officers emerged with a written
confession signed by Miranda. At the top of the statement was a typed paragraph stating that the
3
384 U.S. 436; 1966 U.S. LEXIS 2817 SUPREME COURT OF THE UNITED STATES, 1966
Chapter 7 Crime 9
confession was made voluntarily “with full knowledge of my legal rights, understanding any statement
I make may be used against me.”
At Miranda’s trial, the judge admitted this written confession into evidence over the objection of
defense counsel. The officers testified that Miranda had also made an oral confession during the
interrogation. The jury found Miranda guilty of kidnapping and rape. He was sentenced to 20 to 30
years’ imprisonment. On appeal, the Supreme Court of Arizona affirmed the conviction. In reaching
its decision, the court relied heavily on the fact that Miranda did not specifically request a lawyer. The
Supreme Court of the United States granted certiorari.
Issues: Was Miranda’s confession admissible at trial? Should his conviction be upheld?
Excerpts from Justice Warren’s Decision: Our holding briefly stated it is this: the prosecution may not
use statements, whether exculpatory or inculpatory, stemming from custodial interrogation of the
defendant unless it demonstrates the use of procedural safeguards effective to secure the privilege
against self-incrimination. By custodial interrogation, we mean questioning initiated by law
enforcement officers after a person has been taken into custody or otherwise deprived of his freedom
of action in any significant way. As for the procedural safeguards to be employed, the following
measures are required. Prior to any questioning, the person must be warned that he has a right to
remain silent, that any statement he does make may be used as evidence against him, and that he
has a right to the presence of an attorney, either retained or appointed.
The defendant may waive these rights, provided the waiver is made voluntarily, knowingly and
intelligently. If, however, he indicates in any manner and at any stage of the process that he wishes
to consult with an attorney before speaking there can be no questioning. Likewise, if the individual is
alone and indicates in any manner that he does not wish to be interrogated, the police may not
question him. The mere fact that he may have answered some questions or volunteered some
statements on his own does not deprive him of the right to refrain from answering any further
inquiries until he has consulted with an attorney and thereafter consents to be questioned.
In a series of cases decided by this Court, the police resorted to physical brutality—beating, hanging,
whipping—and to sustained and protracted questioning incommunicado in order to extort
confessions. Only recently in Kings County, New York, the police brutally beat, kicked and placed
lighted cigarette butts on the back of a potential witness under interrogation for the purpose of
securing a statement incriminating a third party.
Unless a proper limitation upon custodial interrogation is achieved there can be no assurance that
practices of this nature will be eradicated in the foreseeable future. Not only does the use of the third
degree involve a flagrant violation of law by the officers of the law, but it involves also the dangers of
false confessions, and it tends to make police and prosecutors less zealous in the search for objective
evidence. As [an official] remarked: ‘If you use your fists, you are not so likely to use your wits.’
[C]oercion can be mental as well as physical, and the blood of the accused is not the only hallmark of
an unconstitutional inquisition. In a serious case, the interrogation may continue for days, with the
required intervals for food and sleep, but with no respite from the atmosphere of domination. It is
possible in this way to induce the subject to talk without resorting to duress or coercion.
Chapter 7 Crime 10
Even without employing brutality, the very fact of custodial interrogation exacts a heavy toll on
individual liberty and trades on the weakness of individuals. In [this case before the Court], the
defendant was thrust into an unfamiliar atmosphere and run through menacing police interrogation
procedures. It is obvious that such an interrogation environment is created for no purpose other than
to subjugate the individual to the will of his examiner. This atmosphere carries its own badge of
intimidation. To be sure, this is not physical intimidation, but it is equally destructive of human dignity.
The current practice of incommunicado interrogation is at odds with one of our Nation’s most
cherished principles—that the individual may not be compelled to incriminate himself.
All these policies point to one overriding thought: the constitutional foundation underlying the
privilege is the respect a government—state or federal—must accord to the dignity and integrity of
its citizens. To maintain a fair state-individual balance, to respect the inviolability of the human
personality, our accusatory system of criminal justice demands that the government seeking to punish
an individual produce the evidence against him by its own independent labors, rather than by the
cruel, simple expedient of compelling it from his own mouth.
Miranda was not in any way apprised of his right to consult with an attorney and to have one present
during the interrogation, nor was his right not to be compelled to incriminate himself effectively
protected in any other manner. Without these warnings the statements were inadmissible. The mere
fact that he signed a statement which contained a typed-in clause stating that he had “full knowledge”
of his “legal rights” does not approach the knowing and intelligent waiver required to relinquish
constitutional rights.
Question: What happened to Miranda after the Supreme Court ruling?

Answer: He was retried without the confession but due to witness testimony and other evidence, he
was convicted and sentenced to serve 20 – 30 years in prison. He was paroled in 1972.
Question: What was Miranda’s life after parole?
Answer: He autographed “Miranda cards” and was stabbed to death in an argument in a bar in January
1976.
Right to a Lawyer
As Miranda made clear, a criminal defendant has the right to a lawyer before being interrogated by the
police. The Sixth Amendment guarantees the right to a lawyer at all important stages of the criminal
process. Because of this right, the government must appoint a lawyer to represent, free of charge, any
defendant who cannot afford one.
Indictment
Grand jury: A group of ordinary citizens who decide whether there is probable cause the defendant
committed the crime with which she is charged.
Indictment: The government’s formal charge that the defendant has committed a crime and must stand
trial.
If the grand jury determines that there is probable cause, an indictment issues. Because the grand jury
never hears the defendant’s evidence, it is relatively easy for prosecutors to obtain an indictment.
Chapter 7 Crime 11
Arraignment
At an arraignment a clerk reads the formal charges of the indictment. The defendant must enter a plea to
the charges. At this stage, most defendants plead not guilty.
Plea Bargaining
Plea Bargain: An agreement in which the defendant pleads guilty to a reduced charge, and the prosecution
recommends to the judge a relatively lenient sentence.
In the federal court system, about 97% of all prosecutions end in a plea bargain. Such a high percentage
has led to some concern that innocent people may be pleading guilty to avoid the risk of tough mandatory
sentences. A judge need not accept the bargain, but usually does.
Discovery
If the defendant does not plead guilty, the prosecution is obligated to hand over any evidence favorable
to the defense that the defense attorney requests. The defense has a more limited obligation to inform
the prosecution.
Trial and Appeal

When there is no plea bargain, the case must go to trial. The mechanics of a criminal trial and appeal are
similar to those for a civil trial, described in Chapter 6, on dispute resolution.
Double Jeopardy
Double jeopardy: A criminal defendant may be prosecuted only once for a particular criminal offense.
The prohibition against double jeopardy means that a defendant may be prosecuted only once for a
particular criminal offense. The purpose is to prevent the government from destroying the lives of
innocent citizens with repetitive prosecutions.
Discussion: Double Jeopardy

Question: What does double jeopardy mean?
Answer: A criminal defendant may be prosecuted only once for a criminal offense.
Question: I recall reading about cases where people were prosecuted by a state and by the federal
government for the same offense. Why doesn’t that violate double jeopardy?
Answer: To qualify as double jeopardy a second prosecution must be done by the same sovereign
that prosecuted the first. There is no prohibition against a different sovereign prosecuting the same
defendant, based on the same incident. In the Rodney King trials in Los Angeles, the police officers
were first charged by the state of California. Their acquittal led to the 1992 Los Angeles riots. The
United States then prosecuted the officers for civil rights violations and obtained convictions against
two. Because the United States is a different sovereign from California, there was no double jeopardy
problem.
Question: Is that fair?
Answer: Some argue that it is not fair; it is, however, legal.
Question: O. J. Simpson was acquitted after the most highly publicized trial in history, yet he was
then sued by the families of the victims. Didn’t that violate double jeopardy?
Answer: No. The families filed a civil lawsuit. That is not a criminal prosecution and there is no double
jeopardy issue.
Chapter 7 Crime 12
Punishment
The Eighth Amendment prohibits cruel and unusual punishment. Courts are generally unsympathetic to
claims under this provision. For example, the Supreme Court has ruled that the death penalty is not cruel
and unusual as long as it is not imposed in an arbitrary or capricious manner.4
Another important case under the Eighth Amendment involved California’s “three strikes” law, which
dramatically increases sentences for repeat offenders. Gary Ewing, on parole from a nine-year prison
term, was prosecuted for stealing three golf clubs worth $399 each. Because he had prior convictions, his
crime, normally a misdemeanor, was treated as a felony. Ewing was convicted and sentenced to 25 years
to life. The Supreme Court ruled that this sentence was not cruel and unusual and that the three strikes
law was a rational response to a legitimate concern about crime.5
The Eighth Amendment also outlaws excessive fines. Forfeiture is the most controversial topic under this
clause. Forfeiture is a civil law proceeding that is permitted by many different criminal statutes. Once a
court has convicted a defendant under certain criminal statutes—such as a controlled substance law—
the government may seek forfeiture of property associated with the criminal act.
To determine if forfeiture is fair, courts look at three factors:
• Whether the property was used in committing the crime
• Whether it was purchased with proceeds from illegal acts, and
• Whether the punishment is disproportionate to the defendant’s wrongdoing
7-2 Crimes That Harm Businesses (And Their Customers)

Businesses must deal with four major crimes: larceny, fraud, arson, and embezzlement.
7-2a Larceny
Larceny: the trespassory taking of personal property with the intent to steal it.
7-2b Embezzlement
Embezzlement: The fraudulent conversion of property already in the defendant’s possession.
7-2c Fraud
Fraud: Deception for the purpose of obtaining money or property.
Fraud refers to a variety of crimes, all of which involve the deception of another person for the purpose
of obtaining money or property. Types of fraud include wire and mail fraud, insurance fraud, Internet
fraud, auctions, identity theft, and phishing.
Wire Fraud and Mail Fraud

These are additional federal crimes involving the use of interstate mail, telegram, telephone, radio or
television to obtain property by deceit.
4
Gregg v. Georgia, 428 U.S. 153 (S. Ct. 1976).
5
Ewing v. California, 538 U.S. 11 (S. Ct. 2003).
Chapter 7 Crime 13
Insurance Fraud
One example is a “swoop and squat” fraud scheme in which the perpetrator purposely causes an accident
so that they can collect on the insurance. Often, a dishonest doctor is part of the team.
Internet Fraud
The Internet’s anonymity8 and speed facilitate fraud. Common scams include advance fee scams, the sale
of merchandise that is either defective or nonexistent, the so-called Nigerian letter scam, billing for
services touted as “free,” and so on. Other common forms are:
Auctions – Shilling is an increasingly popular online auction fraud. Shilling means that a seller either bids
on his own goods or agrees to cross-bid with a group of other sellers. It is prohibited because the owner
drives up the price of his own item by bidding on it.
Identity Theft – This is one of the scariest crimes against property. Thieves steal the victim’s social security
number and other personal information such as bank account numbers and mother’s maiden name, which
they use to obtain loans and credit cards. Victims have the difficult task of proving that they were not
responsible for the debts and they may even find themselves unable to obtain a credit card, loan, or job.
Phishing
Phishing: A fraudster sends a message directing the recipient to enter personal information on a website
that is an illegal imitation of a legitimate site.
Spear phishing: Phishing that involves personalized messages that look as if they have been sent by
someone the victim knows.
7-3d Arson
Arson: The malicious use of fire or explosives to damage or destroy real estate or personal property.
7-3e Hacking
Hacking: Gaining of unauthorized access to a computer system.
Hacking is a crime under the federal Computer Fraud and Abuse Act of 1986 (CFAA).6 The CFAA prohibits:
• Accessing a computer without authorization and obtaining information from it,
• Computer espionage,
• Theft of financial information
• Theft of information from the U.S. government,
• theft from a computer,
• Computer fraud,
• Intentional, reckless, and negligent damage to a computer,
• Trafficking in computer passwords, and
• Computer extortion
Courts are now in the process of figuring out how to interpret the CFAA. In the following case, a former
employee clearly violated his company’s policies, but did he commit a crime? You be the judge.
6
18 U.S.C. Section 1030.
Chapter 7 Crime 14
You Be The Judge: United States v, Nosal7

Facts: David Nosal worked for an executive search firm, Korn/Ferry (K/F). Shortly after he left the
company to start a competing business, he convinced some of his former colleagues to log into the
company’s confidential database and give him customer names and contact information. K/F had
authorized the employees to access the database, but not to disclose confidential client information to
outsiders.
The government charged Nosal with aiding and abetting his former colleagues in violating a provision of
the CFAA that prohibits employees from exceeding their authorized access to a computer with intent to
defraud. The trial court granted Nosal’s motion to dismiss. The government appealed.
You Be the Judge: Did Nosal commit a crime when he aided and abetted others in violating a workplace
policy on computer use?
Argument for the Defendant: This provision of the CFAA can mean one of two things: (1) either it is a
crime to access unauthorized data or, (2) in a more expansive view, it can apply to anyone who is legally
entitled to access data, but who then uses this data in an unauthorized manner. That is what happened
here. The K/F employees were authorized to access the confidential database, but they were not
permitted to send it to Nosal.
Congress enacted the CFAA primarily to address the growing problem of computer hacking, i.e.,
“intentionally trespassing into someone else’s computer files.” But, under the government’s view,
everyone who uses a computer in violation of company policy, which may well include everyone who
uses a computer, would be a criminal. According to the government, if an employer keeps certain
information in a separate database that can be viewed on a computer screen, but not copied or
downloaded and an employee copies the information to a thumb drive, he could be charged with a
crime.
The computer gives employees new ways to procrastinate, by g-chatting with friends, playing games,
shopping or watching sports highlights. Such activities are routinely prohibited by many computer-use
policies. Under the broad interpretation of the CFAA, such minor violations would become federal crimes.
While it is unlikely that you will be prosecuted for watching cat videos on your work computer, you could
be. How will an employee know the difference between a minor personal use and a criminal act?
Employees who call family members from their work phones will become criminals if they send an email
instead. They can read the sports section of USA Today at work, but they’d better not visit ESPN.com. And
Sudoku enthusiasts should stick to printed puzzles, because visiting www.dailysudoku.com from their work
computers might give them more than enough time to hone their Sudoku skills behind bars.
Facebook prohibits its users from sharing login information. Are we going to cart every violator off to
prison? The terms of service on dating websites prohibit inaccurate or misleading information. If you
describe yourself as “tall, dark and handsome,” when you are actually short and homely, could you end up
wearing a handsome orange prison jumpsuit?
7
676 F.3d 854 United States Court of Appeals for the Ninth Circuit, 2012.
Chapter 7 Crime 15
Argument for the Government: This statute explicitly requires an intent to commit fraud. Therefore, it
has nothing to do with reading ESPN.com, playing Sudoku, checking email, or fibbing on dating sites.
Instead, the K/F employees knowingly exceeded their access to a protected company computer and they
did so with an intent to defraud.
This distinction is not complicated. A bank teller is entitled to access money for legitimate banking purposes,
but not to take the bank’s money for himself. A new car buyer may be entitled to take a vehicle around
the block on a test drive but not to drive it to Mexico on a drug run.
Holding: Judgment for Nosal.
Question: What does CFAA stand for?

Answer: The Computer Fraud and Abuse Act.
Question: What is hacking?
Answer: The gaining of unauthorized access to a computer system.
7-3 Crimes Committed by Business

A corporation can be found guilty of a crime based on the conduct of any of its agents, who include anyone
undertaking work on behalf of the corporation. An agent can be a corporate officer, an accountant hired
to audit a statement, a sales clerk, or almost any other person performing a job at the company’s request.
If an agent commits a criminal act within the scope of his employment and with the intent to benefit
the corporation, the company is liable. This means that the agent himself must first be guilty.
7-3a Making False Statements

It is illegal to make false statements or engage in a cover up during any dealings with the United States
government.
7-3b Workplace Crimes

The most important statute regulating the workplace is the federal Occupational Safety and Health Act
of 1970 (OSHA), which sets safety standards for many industries.
7-3c RICO
Racketeer Influenced and Corrupt Organizations Act (RICO): A powerful federal statute, originally aimed
at organized crime, now used in many criminal prosecutions and civil lawsuits.
Racketeering acts: Any of a long list of special crimes, such as embezzlement, arson, mail fraud, wire fraud,
and so forth.
RICO is one of the most controversial statutes ever written. Congress passed the law primarily to prevent
gangsters from taking money they earned illegally and investing it in legitimate businesses. RICO prohibits
u sing two or more racketeering acts to accomplish any of these goals: (1) investing in or acquiring
legitimate businesses with criminal money; (2) maintaining or acquiring businesses through criminal
activity; or (3) operating businesses through criminal activity.
It is a two-step process to prove that a person or an organization has violated RICO.
Chapter 7 Crime 16
• The prosecutor must show that the defendant committed two or more racketeering acts, which are
any of a long list of specified crimes: embezzlement, arson, mail fraud, wire fraud, and so forth. Thus,
if a gangster ordered a building torched in January and then burned a second building in October, that
would be two racketeering acts. If a stockbroker told two customers that Bronx Gold Mines was a
promising stock, when she knew that it was worthless, that would be two racketeering acts.
• The prosecutor must then show that the defendant used these racketeering acts to accomplish one
of the three purposes listed above. If the gangster committed two arsons and then used the insurance
payments to buy a dry cleaning business, that would violate RICO. If the stockbroker gave fraudulent
advice and used the commissions to buy advertising for her firm, that would violate RICO.
7-3d Money Laundering

Money laundering: Using the proceeds of criminal acts either to promote crime or conceal the source of
the money.
Discussion: Money Laundering Cases and Prosecutorial Ethics

Federal prosecutors have sharply increased the number of people they charge with money laundering.
Because more people are funneling drug money out of the country? Not necessarily, argue defense
lawyers. They say that prosecutors are now routinely adding on money laundering charges to cases that
used to be routine fraud cases. For example, a medical supply company bills the federal government for
prosthetic devices that it never delivered. Formerly, that would have been a simple Medicare fraud case.
Today, though, it is likely to be a Medicare fraud and money laundering case. Prosecutors in such a case
argue that the money obtained illegally from the federal government is used to invest in and maintain a
legitimate business, and that is money laundering. If the medical supply company uses money obtained
from fraudulent bills to pay the rent on its company headquarters, it has laundered the money.
What is the big deal? Time in prison. A simple fraud conviction typically results in a sentence of five
years or less; a money laundering conviction can increase the penalty to 20 years in prison. In addition, a
prosecutor who tacks on a money laundering charge puts extra pressure on the defendant to plea bargain,
because the penalty for a conviction could be so high.
Defense lawyers claim that this practice is unethical, in that Congress intended stiff money laundering
penalties for big-time drug dealers who gravely damage our country by importing harmful substances. A
small business dealer who cheats once or twice should not be treated like a drug kingpin. Prosecutors
respond that they are ethically required to charge the most serious provable crime, and that Congress
wrote the money laundering statute broadly in order to discourage all fraud, not just drug-related
offenses.
Bonus Case: United States v. Kennard 8
Facts: The reverend Abraham Kennard bilked hundreds of churches out of millions of dollars through a
phony grant scheme. Abraham created the Network International Investment Corporation and then
approached churches and other nonprofits with an offer: for every $3,000 in membership fees that an
organization paid to the Network, the Network would award $500,000 in grants. Abraham told investors
that the grants were possible because he had secured wealthy investors who would provide financing,
and that the Network expected to earn a profit from its Christian resorts. More than 1,600 churches and
other nonprofits paid Abraham over $8.7 million.
8 472 F.3d 851, 11th Circuit Court of Appeals, 2006.

Chapter 7 Crime 17
Abraham deposited the money into an escrow account in the name of his lawyer, and then transferred
the money into another account in the name of Promotional Times International, Ltd., which was
controlled by Abraham’s brother Laboyce Kennard.
The investors never received their money and Abraham was found guilty of various crimes. Laboyce was
found guilty of money laundering. He appealed, arguing there was insufficient proof that he knowingly
laundered money.
Issue: Was there sufficient evidence that Laboyce knowingly laundered money?
Holding: Yes, conviction affirmed. Laboyce claims that there was not enough evidence for a jury to find
beyond a reasonable doubt either the existence of a criminal agreement or his knowing participation in
it.
To convict Laboyce on the money laundering conspiracy charge, the prosecution had to prove that some
agreement existed to launder the proceeds of Abraham’s fraud scheme, and that Laboyce knowingly
participated in that agreement. The extent of Laboyce’s knowledge of the details in the conspiracy does
not matter if the prosecution can show that he knew the essential objectives of the conspiracy.
There was sufficient evidence to prove that Laboyce knowingly participated in the agreement to launder
the proceeds from Abraham’s fraud. Laboyce set up the Promotional account and made large deposits to
that account of cashier’s checks from Abraham and checks drawn on the escrow account. Laboyce made
most of the withdrawals from the Promotional account including cashier’s checks made payable to
Abraham.
Laboyce was also involved in Network events. For example: Laboyce went with Abraham to a Network
meeting in Charlotte, North Caroline at which Abraham gave Network members fake checks instead of
the promised grant money; Laboyce videotaped Abraham at a fake groundbreaking ceremony for a
Network resort which was used to hold off member complaints; Laboyce “worked security” at a Network
meeting where Abraham told the members their grants would be delayed again; and Laboyce was present
at a meeting where Abraham told him that an FBI investigation of the Network led to a seizure of the
escrow account.
This evidence, according to the court, was enough for a jury to find beyond a reasonable doubt that
Laboyce knowingly participated in the conspiracy to launder the proceeds of the fraud.
Question: What is money laundering?

Answer: Money laundering is taking the profits of certain crimes and either (1) using the money to
promote crime or (2) attempting to conceal the source of the money.
Question: How did the money laundering occur here?
Answer: Payments received from members based on a fraudulent investment scheme was passed
through two accounts to hide their source and relationship to Abraham.
Question: If Laboyce did not commit the fraud, what crime did he commit?
Answer: Laboyce was charged with conspiring to commit money laundering.
Question: How is that different than money laundering?
Answer: Conspiracy to launder money involves an agreement to launder money, and Laboyce’s
knowing and voluntary participation in that agreement.
Chapter 7 Crime 18
7-3e Hiring Illegal Workers

It is illegal to knowingly employ unauthorized workers.
7-3f Foreign Corrupt Practices Act

Under the Foreign Corrupt Practices Act (FCPA), it is illegal for any employee or agent of a U.S. company
(and some foreign companies) to give anything of value to any foreign official for purposes of influencing
an official decision (unless the payment was merely intended to facilitate a routine governmental action.)
The FCPA has two principal requirements:

• Bribes: The statute makes it illegal for U.S. companies and citizens (& some others) to bribe
foreign officials to influence a government decision. A promise to pay a bribe violates the statute.
• Recordkeeping: All publicly traded companies – whether they engage in international trade or
not -- must keep accurate and detailed records to prevent hiding or disguising bribes. These
records must be available for inspection by U.S. officials. However, note that a grease or
facilitating payment for a routine governmental action is permitted.
7-3g Other Crimes

Other crimes may be found throughout the text. Recent federal and state statutes are designed to punish
those who harm the environment.
7-3h Punishing a Corporation

Fines
The most common punishment for a corporation is a fine. This makes sense in that the purpose of a
business is to earn a profit, and a fine, theoretically, hurts. But most fines are modest by the present
standards of corporate wealth.
Compliance Programs
Federal Sentencing Guidelines: The detailed rules that judges must follow when sentencing defendants
convicted of federal crimes.
Compliance program: A plan to prevent and detect improper conduct at all levels of the company.
Chapter 7 Crime 19
The Federal Sentencing Guidelines are the detailed rules that judges must follow when sentencing
defendants convicted of crimes in federal court. The guidelines instruct judges to determine whether, at
the time of the crime, the corporation had in place a serious compliance program, that is, a plan to prevent
and detect criminal conduct at all levels of the company.
Chapter Conclusion
Crime has an enormous impact on society. Companies are victims of crimes, and sometimes they commit
criminal actions. Successful business leaders are ever-vigilant to protect their company from those who
wish to harm it, whether from the inside or out.
Multiple Choice Questions

1. In a criminal case, which statement is true?
A. The prosecution must prove the government’s case by a preponderance of the evidence.
B. The criminal defendant is entitled to a lawyer even if she cannot afford to pay for it herself.
C. The police are never allowed to question the accused without a lawyer present.
D. All federal crimes are felonies.
Answer: B.
2. The police are not required to obtain a warrant before conducting a search if:
A. a reliable informant has told them they will find evidence of a crime in a particular location.
B. they have a warrant for part of a property and another section of the property is in plain view.
C. they see someone on the street who could possibly have committed a criminal act.
D. someone living on the property has consented to the search.
Answer: D.
3. Under the exclusionary rule, which statement is true?

A. Evidence must be excluded from trial if the search warrant is defective, even if the police believed
at the time of the search that it was valid.
B. The prosecution cannot use any evidence the police found at the site of the illegal search but it
can use any evidence the police discover elsewhere as a result of the illegal search.
C. Any statements a defendant makes after arrest are inadmissible if the police do not read him his
Miranda rights.
D. If a conviction is overturned because of the exclusionary rule, the prosecution is not allowed to
retry the defendant.
Answer: C.
4. Henry asks his girlfriend, Alina, to drive his car to the repair shop. She drives his car all right—to Las
Vegas, where she hits the slots. Alina has committed:
A. fraud
Chapter 7 Crime 20
B. embezzlement
C. larceny
D. a RICO violation
Answer: C.
5. Which of the following elements is required for a RICO conviction?

A. Investment in a legitimate business
B. Two or more criminal acts
C. Maintaining or acquiring businesses through criminal activity
D. Operating a business through criminal activity
Answer: B.
Case Questions
1. You Be the Judge: WRITING PROBLEM. An undercover drug informant learned from a mutual
friend that Philip Friedman “knew where to get marijuana.” The informant asked Friedman three
times to get him some marijuana, and Friedman agreed after the third request. Shortly thereafter
Friedman sold the informant a small amount of the drug. The informant later offered to sell Friedman
three pounds of marijuana. They negotiated the price and then made the sale. Friedman was tried for
trafficking in drugs. He argued entrapment. Was Friedman entrapped?
Argument for Friedman: The undercover agent had to ask three times before Friedman sold him a
small amount of drugs. A real drug dealer, predisposed to commit the crime, leaps at an opportunity
to sell. If the government spends time and money luring innocent people into the commission of
crimes, all of us are the losers.
Argument for the Government: Government officials suspected Friedman of being a sophisticated
drug dealer, and they were right. When he had a chance to buy three pounds, a quantity only a dealer
would purchase, he not only did so, but bargained with skill, showing a working knowledge of the
business. Friedman was not entrapped—he was caught.
Answer: Friedman argued entrapment, claiming that there was no evidence of his predisposition to
traffic in drugs. The Alabama Supreme Court ruled against him. The court noted that Friedman
admitted to occasional use of marijuana, that he had been able quickly to locate marijuana to resell
to the agent, and that he showed a sophisticated knowledge of the drug when bargaining over the
price of three pounds. The court held that there was no evidence of entrapment. Friedman v. State,
654 So.2d 50, 1994 Ala. Crim. App. LEXIS 179 (1994).
2. Conley owned video poker machines. Although they are outlawed in Pennsylvania, he placed them in
bars and clubs. He used profits from the machines to buy more machines. Is he guilty of money
laundering?
Answer: Yes. It is money laundering to take the proceeds of illegal acts and either conceal them or,
as he did, use them to promote additional crimes.
Chapter 7 Crime 21
3. Shawn was caught stealing letters from mailboxes. After pleading guilty, he was sentenced to two
months’ in prison and three years’ supervised release. One of the supervised release conditions
required him to stand outside a post office for eight hours wearing a signboard stating, “I stole mail.
This is my punishment.” He appealed this requirement on the grounds that it constituted cruel and
unusual punishment. Do you agree?
Answer: The appeals court affirmed the sentence on the grounds that it did not violate standards of
decency. United States v. Gementera, 379 F.3d 596 (2004).
4. While driving his SUV, George Xinos struck and killed a pedestrian. He then fled the scene of the
crime. A year later, the police downloaded information from his car’s onboard computer which they
were able to use to convict him of the crime. Should this information have been admissible at trial?
Answer: A California court ruled that Xinos did have a reasonable expectation of privacy and the
data was not admissible in court. because the computer had simply been recording his movements
on a public road. People v. Xinos, 192 Cal. App. 4th 637 (Cal. App. 6th Dist. 2011).
5. Police arrested Hank on a warrant issued in a neighboring county. When they searched him, the
police found drugs and a gun. Only later did the police discover that when they had used the
warrant, it was not valid because it had been recalled months earlier. The notice of recall had not
been entered into the database. Should the evidence of drugs and a gun be suppressed under the
exclusionary rule?
Answer: No. The police conduct at issue here comes under one of the exceptions to the
exclusionary rule –the good faith exception. The police acted under what appeared to be a valid
warrant, and there was no indication that it had been recalled.
Discussion Questions
1. Under British law, a police officer must now say the following to a suspect placed under arrest: “You
do not have to say anything. But if you do not mention now something which you later use in your
defense, the court may decide that your failure to mention it now strengthens the case against you.
A record will be made of anything you say and it may be given in evidence if you are brought to trial.”
What is the goal of this British law? What does a police officer in the United States have to say, and
what difference does it make at the time of an arrest? Which approach is better?
2. ETHICS You are a prosecutor who think it is possible that Naonka, in her role as CEO of a brokerage
firm, has stolen money from her customers, many of whom are not well-off. If you charge her and her
company with RICO violations, you know that she is likely to plea bargain because otherwise her assets
and those of the company may be frozen by the court. As part of the plea bargain, you might be able
to get her to disclose evidence about other people who might have taken part in this criminal activity.
But you do not have any hard evidence at this point. Would such an indictment be ethical? Do the
ends justify the means? Is it worth it to harm Naonka for the chance of protecting thousands of
innocent investors?
Chapter 7 Crime 22
3. Officer Trottier stopped Marie Winfield for driving 20 miles over the speed limit. He then became
suspicious because her son would not make eye contact and she was eating a Powerbar in a
“hurried manner.” The officer asked for and Winfield granted him permission to search her car.
During the search, he found a letter, which he read. Has he committed an illegal search?
Answer: The court ruled that it was illegal – permission to search a car does not mean permission to
read a letter. Winfield v. Trottier, 710 F.3d 49 (2d Cir. 2013).
4. Mickle pleaded guilty to rape. The judge sentenced him to prison for five years and also ordered that
he undergo a vasectomy. Was this cruel and unusual punishment?
Answer: The appeals court ruled that this sentence was cruel and unusual. Although the operation in
itself is not cruel (indeed, many men voluntarily undergo it), when imposed as punishment, it is
degrading and in that sense cruel. It is also an unusual punishment. Mickle v. Henrichs, 262 F. 687
(1918).
5. Ramona was indicted on charges of real estate fraud. During a legal search of her home, the police
found a computer with encrypted files. Would it be a violation of her Fifth Amendment right against
self-incrimination to force her to unencrypt these files?
Answer: The courts are divided on this topic. This court did order Fricosu to unencrypt the files on
the theory that she was already incriminated because the police knew the laptop was hers. United
States v. Fricosu, 841 F. Supp. 2d 1232 (D. Colo. 2012). But a different court ruled that a man suspected
of having child pornography on his computer did not have to unencrypt the files. United States v. Doe,
670 F.3d 1335 (11th Cir. Fla. 2012)
6. Suppose two people are living together: the suspect and a tenant. If the tenant consents to a police
search of the premises, then the police are not required to first obtain a warrant. What if the
suspect and the tenant disagree, with the tenant granting permission while the suspect forbids the
police to enter? Should the police be required to obtain a warrant before searching? Or what if the
suspect denies permission to enter but the police go back later and the tenant consents?
Answer: In the first situation, the S. Ct. ruled that if the suspect is standing there and denies consent,
the police may not conduct a search. Georgia v. Randolph, 547 U.S. 103 (U.S. 2006). As for the 2nd
situation, in 2014, the S. Ct. refused to extend Georgia v. Randolph’s requirement of a co-occupant
consent to a situation where the objecting occupant is absent from the property. The decision has
implications for people who live with others. Co-occupants should be aware that their fellow co-
occupants may consent to a police search if they are not there, even if they previously objected to the
consent search. Fernandez v. California, 34 S.Ct. 1126 (2014).
7. Hiring relatives of foreign officials for no-show jobs is a violation of the FCPA. But what about hiring
children of government officials into real jobs? Is that also a violation? The U.S. government is
investigating JPMorgan Chase & Co.’s practice of hiring the children of top Chinese officials in Hong
Kong. What are the rules in this situation? What should they be?
Answer: According to the WSJ, “Factors that would help a company fend off bribery inquiries would
include proof that there was a vacant position to start with (as opposed to the company having
created a new position for the official's relative); that the relative was qualified to fill it; and that the
relative performed the duties of the position satisfactorily, legal experts said.” Of concern would be
any evidence of a quid pro quo around the time of hiring.
Chapter 7 Crime 23
8. A police officer in North Carolina stopped Nick’s car because it had a broken brake light. Nick
allowed the officer to search the car and, during the search, the officer found cocaine. It turns out
that the original stop was invalid because drivers in North Carolina are allowed to drive with only
one brake light. The cop did not know the law. Does the exclusionary rule prevent the cocaine from
being admissible in court?
Answer: If the original stop was illegal, then the search following from it, even though Nick gave
permission, cannot stand. The exclusionary rule will apply.
Suggested Additional Assignments

Research: Corporate Crime
Students should find a newspaper or magazine article involving crime committed by a business or
corporate executive. What are the economic costs of the (alleged) crime? What penalties can the state
impose for the crimes? Are they penalties too harsh or too weak when compared to penalties for street
crime? How should the law deal with the defendants’ conduct?
Research: Computer Crime
Students should find a newspaper or magazine article involving a computer crime, such as online fraud,
online identity theft, or use of sites such as Craigslist and MySpace to perpetrate crimes. What new issues
and/or obstacles are raised when crime is committed online? What new problems might the computer
raise for law enforcement?
Research: Revolving Door?
Students should research recidivism rates for U.S. prisons. What percentage of prisoners return to prison
for committing new crimes? Do recidivism rates differ by the type of crime a person committed? By age
of the prisoner when committed to prison? By race? By education? By sex? By the type of penal
environment in which the prisoner served time?
Field Work: Criminal Court
Students should visit a criminal session of a local trial court and observe court proceedings for a minimum
of two hours. (It is likely easier for students in an urban environment to complete this assignment, but
students near county seats should also have access to criminal court sessions.) Students should attempt
to find a criminal trial, sentencing, or pre-trial motions. They should sit, observe, and compare what they
see with the images they’ve formed of criminal court from the media.

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Approaching Criminal Law

7-1 Criminal Procedure

Felonies and Misdemeanors

7-1b Conduct Outlawed

Case: Skilling v. United States1

Issue: Was the honest services statute unconstitutionally vague?

Question: What was Skilling’s argument?

7-1c State of Mind

7-1d Gathering Evidence: The Fourth Amendment

Issue: Was the dog sniff legal?

Excerpts from Justice Ginsburg’s Decision:

Question: What are some ordinary inquiries incident to a traffic stop?

Bonus Case: United States v. Jones 2

Excerpts from Justice Scalia’s Decision:

Discussion: Exclusionary Rule

There are three exceptions to the exclusionary rule:

7-1e After Arrest

Due Process: Requires fundamental fairness at all stages of the case.

Landmark Case: Miranda v. Arizona3

Question: What happened to Miranda after the Supreme Court ruling?

Trial and Appeal

Discussion: Double Jeopardy

7-2 Crimes That Harm Businesses (And Their Customers)

Wire Fraud and Mail Fraud

You Be The Judge: United States v, Nosal7

Holding: Judgment for Nosal.

Question: What does CFAA stand for?

7-3 Crimes Committed by Business

7-3a Making False Statements

7-3b Workplace Crimes

It is a two-step process to prove that a person or an organization has violated RICO.

7-3d Money Laundering

Discussion: Money Laundering Cases and Prosecutorial Ethics

Bonus Case: United States v. Kennard 8

8 472 F.3d 851, 11th Circuit Court of Appeals, 2006.

Question: What is money laundering?

7-3e Hiring Illegal Workers

7-3f Foreign Corrupt Practices Act

The FCPA has two principal requirements:

7-3g Other Crimes

7-3h Punishing a Corporation

Multiple Choice Questions

3. Under the exclusionary rule, which statement is true?

5. Which of the following elements is required for a RICO conviction?

Suggested Additional Assignments

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