Crimes of the business world
CRIMES OF THE
Crime is recognized widely
as a serious problem in the United States, but there is little agreement over
how to cope with it. It is important to understand that most of the specific
crimes discussed in this text are not new or unique.
~The discussion of property
crimes noted that historically, under a laissez-faire attitude of "let the
buyer beware," individuals were expected to examine carefully every
business deal. Today, with a much more complicated social and business system,
criminal law has become more realistic and more protective of businesspeople
and other consumers. Changing technology has altered the nature of criminality,
too, bringing new possibilities for committing crimes and thus creating the
need for new statutes.
Various terms have been used
to describe the crimes. The term white-collar crime is used frequently
to refer to business crimes, and it defined as "a crime committed by a
person of respectability and high social status in the course of his occupation."
Under today's federal law,
white-collar crime is defined as "an illegal act or series of illegal acts
committed by nonphysical means and by concealment or guile, to obtain money or
property, to avoid the payment or loss of money or property, or to obtain
business or personal advantage
White-collar crimes are
illegal acts that use deceit and concealment—rather than the application or
threat of physical force or violence—to obtain money, property, or service; to
avoid the payment or loss of money; or to secure a business or personal
advantage. White-collar criminals occupy positions of responsibility and trust
in government, industry, the professions, and civil
Corporate crime is another term used in reference to
business crimes. It is a narrower term than white-collar crime, focusing on
organizational crime. The terms have been distinguished as follows:
If a policymaking corporate
executive is acting in the name of the corporation and the individual's
decision to violate the law is for the benefit of the corporation, as in
price-fixing violations, the violation would constitute corporate
If on the other hand, the
corporate official acts against the corporation, as in the case of
embezzlement, and benefits in a personal way from his official connections with
the corporation, his acts would constitute white-collar or occupational
Individual liability for any
of the crimes committed by people in the course of business may be determined
by the same principles discussed earlier regarding criminal liability. Some
crimes have special elements that must be proved in each case. When individuals
are charged with bribery, extortion, employee theft, fraud, false pretense, tax
evasion, or any other business crime, any elements peculiar to that crime must
be proved along with the required act mental element, and causation. The
same is true when several people are-charged, as in conspiracy.
The rules change when a
corporation is charged with a crime or when a corporate executive is
charged with a crime committed by an employee. Is addition, a
distinction must be made between allegations of criminal and ton liability. That
discussion noted that there are three types of liability without fault or areas in which an
individual may be held liable for a crime without a criminal intent or without
even having knowledge that a crime is being committed.
Under a strict liability
theory, a person may be held criminally liable for such acts as statutory rape
or selling liquor to a minor even if that person did not know the victim or
buyer was under the legal age. Under vicarious liability theory, individuals
may be held criminally liable for the crimes of those who work for them; for
example, employers may be held liable for employees who sell food or drugs that
are in violation of pure food and drug laws and that result in the injury or
death of consumers.
Enterprise liability theory, also called corporate
liability, provides that under some circumstances corporate officers and
officials may be held criminally liable for the acts of their employees.
Historically corporations were not held liable for homicide, although as far
back as 1909 the Supreme Court upheld the constitutionality of holding a
corporation criminally liable for the acts and omissions of its agents. In New
York Central and Hudson River Railroad Co. v. United States, the
Court permitted imputing the criminal intent of a corporate agent to the
corporation. This case was a break with the traditional common law approach
that corporations could not be held criminally liable, although their agents
could. As corporations became more powerful and more dangerous, legislatures
and courts began to recognize corporate criminal liability.
In recent years there have
been an increasing number of indictments and prosecutions against corporations
for violent crimes such as homicide.
Corporate agents may be held
criminally liable for the acts of other employees within the corporation, but
the corporate agent may not be convicted if he or she can prove a lack of power
to control the situation. When criminal liability is imposed on corporate
agents for the acts of their employees, most courts limit punishment to
penalties such as a fine.
The Model Penal Code (MPC)
provides for corporate liability in three areas, with the broadest base of
liability "incurred as a consequence of conduct by an agent of the
corporation acting on behalf of the corporation and within the scope of his
employment." That liability is "limited to violations and to offenses
defined by statutes outside the criminal code that plainly evidence a
legislative purpose to impose liability on a corporation.
Because many business crimes
are prosecuted under federal law, federal statutes are used to illustrate most
of the crimes discussed here. States prosecute these crimes, too, but their
statutes vary. Furthermore, there is considerable overlap among criminal,
civil, and administrative laws covering business crimes.