Module Four
Learning Objectives
By the end of this module, you will meet these learning objectives:
Identify potential rights, defenses, and remedies, based on criminal and civil law Determine the legal and ethical implications of the most common crimes in business
Chapter 7
Case Opener
For about 20 months, Robert E. McDonald perpetrated a scheme to solicit millions of dollars to make a
$100 million purchase of 14 Marriott and Hilton hotels
He made false representations that the RAI entities or related entities has substantial capital assets
toward the purchase and that they had tens of millions of dollars deposited at several bank locations
including Chase and Citibank
: McDonald knew these representations were false o He created fake bank statements o Failed to inform the hotel investor he has been previously convicted fro fraud offenses and was
on federal supervised release
He obtained $1,486323 from one investor and sent him stock certificates by federal express from New York, New York o He then transferred the funds into his own use
o Including $145,000 through wire transfer on January 15, 2010 to a Citibank account maintained
in New York.
Elements of a Crime
Purpose of criminal law is to punish an offender for causing harm to public health, safety, or morals
In a criminal trial, society is seen as the victim, and the government files charges against the defendant
In a civil trial there is an individual victim or victims and an individual person or corporation can file a suit
To punish an individual for criminal behavior, the government must demonstrate the two elements of a
crime
o Wrongful behavior, that is actus reus or a guilty act o Wrongful state of mind, also known as men's rea or a guilty mind
In order to prove the first element, actus reus, the government must establish the nonmental elements of
the crime and demonstrate that a prohibited act or consequence resulted because of the defendant's
actions
To prove the second elements, menus rea, the government must prove that the defendant acted with
purpose, knowledge, recklessness or negligence o Type of wrongful state helps determine the seriousness of the punishment First, a defendant can purposefully commit a crime by engaging in a specific wrongful behavior
to bring about a specific wrongful result Second, a defendant can knowingly commit a wrongful act if the person knows the act is
wrongful or believed so yet does nothing to confirm or disconfirm this belief
o Third, a defendant is reckless if a criminal act occurs when the individual consciously ignored
substantial risk
o Finally, a defendant is negligent is he or she does not meet the standard care of a reasonable
person would use under the circumstances
Certain crimes allow punishment without proof of guilty mild, mostly violations of regulatory statues Liability without fault applies to actions that regardless of the car taken, are prohibited o Like selling alcohol to a minor
Classification of Crimes
Crimes are divided into categories based on the seriousne