8
8.1 Introduction
LEARNING OBJECTIVES
- Understand what crime is and learn about common business crimes.
- Compare and contrast the differences between criminal law and civil law.
- Understand the constitutional protections given to those accused of committing a crime.
- Explore the exceptions to the Fourth Amendment’s warrant requirement.
A crime is a social harm that the law punishes. At the most basic level, criminal statutes reflect the rules that must be followed for a civil society to function. Like individuals, businesses can be both victims and perpetrators of crime.
Crime affects businesses both from outside and inside the organization. Criminal activity “from the outside” may include property damage, theft, shoplifting, corporate espionage, fraud, and arson. Threats “from the inside” may include crimes such as embezzlement, computer crimes, and fraud. Moreover, businesses must also protect themselves from the bad judgment and behavior of their employees. If an employee acting within the scope of employment commits a crime from which the business will benefit, then the business can be convicted of the crime, too. Businesses may actively perpetrate crime, through a bad corporate culture or through organized crime, such as money laundering.
8.2 The Nature of Criminal Law
When crime occurs in the context of business, some people think that no one is “really” injured. When an insurance company has to pay for a claim arising from a crime, the insurance company is injured, as are the victim and society at large. Crime undermines confidence in the social order and public safety. No crime is victimless.
In general, a crime requires someone to (1) commit a criminal act, known as actus reus, and (2) possess the required criminal state of mind, or mens rea. For example, if an accountant thinks about stealing money from her company but does not take any steps to do it, then no crime has been committed. Similarly, if an accountant makes a mistake and transfers money inappropriately between accounts, he has not committed fraud unless he had the required criminal state of mind.
Strict liability crimes are an exception to the mens rea element. Strict liability crimes are acts that the legislature defines as social wrongs that do not need proof of the defendant’s intent to complete the act. For example, speeding while driving a motor vehicle, possession of child pornography, and sale of tobacco and alcohol to minors all carry criminal liability without the government needing to prove the defendant’s intent.
Criminal Law versus Civil Law
Criminal law differs from civil law in several important ways.
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Because crimes are public injuries, they are punishable by the government. It is the government’s responsibility to bring charges against criminals. In fact, private citizens may not prosecute each other for crimes. When a crime has been committed, the government collects the evidence and files charges against