Florida White Collar Criminal Defense
- White Collar Criminal Defense
White Collar Criminal Defense
Reviewed and edited by Leading Florida Attorney E.
C. Deeno Kitchen at the law firm of Kitchen Judkins
Simpson & High
Business owners need to be increasingly aware of how
they might run afoul of criminal laws in the operation
of their businesses. Newspapers today are so full of
reports of corporate criminal investigations and prosecutions
that most business owners do not even realize that
business entities were once thought to be incapable
of committing crimes. Under the common law, corporations
were considered artificial constructs without minds
of their own, incapable of forming the intent necessary
to be guilty of crimes. All this has changed. During
the last two decades, the federal and state governments
have increased the number of criminal investigations
of businesses and the people who run them. High-profile
prosecutions of large corporations have caught the
attention of the press and the public.
Today, business owners and corporate executives should
have a basic understanding of how criminal laws can
impact their businesses. This chapter is designed to
acquaint the reader with criminal statutes that most
affect businesses and the steps businesses can take
to avoid criminal liability. It outlines the fundamentals
of corporate criminal law, such as the elements of
a crime and some of the different types of corporate
felonies and white collar crime.
Criminal Liability of a Corporation
As mentioned earlier, corporations were once thought
to be incapable of forming the intent necessary to
commit crimes. This attitude now has been erased and
corporations have even been found guilty of crimes
requiring specific intent. A corporation may be prosecuted
for any crime other than a crime that is only committed
by a natural person, such as bigamy or rape. The law
recognizes that corporations may be reckless and may
commit crimes requiring specific intent. For a corporation
to be responsible, the action usually must be committed
by an agenta director, employee or officer authorized
to act on behalf of the corporationacting in the scope
of employment. The corporation may also be held responsible
for its part in a conspiracy.
Criminal Liability of a Corporate Officer or Agent
In addition to the corporation’s liability, corporate
officers and agents may be found personally liable
for their criminal conduct. Some businesspersons mistakenly
believe that criminal liability is an “either/or”
proposition. That is, they believe that if their actions
subject the business to criminal liability, they will
be free of personal liability. This belief is incorrect,
however, because many criminal statutes allow prosecutors
to prosecute both the business and the individuals
who run it. Individual and corporate liability are
cumulative, not exclusive.
Participation in business criminal activity does not,
by itself, make a person criminally liable. Usually
the prosecution must show that the participating officer
or agent consciously promoted or at least knew about
the illicit act. Ordering a subordinate to commit a
crime or silently acquiescing to another’s commission
of a crime will make most officers or agents personally
liable for the crime. Some officers within a corporation
have even been held responsible for criminal activity
of which they were unaware because they had an obligation
to ensure compliance with the law or to detect and
prevent violations of criminal regulations. The law
does not look kindly on corporate officers who claim
to have been asleep at the helm while their subordinates
were engaging in criminal activity. Especially in the
context of environmental regulations, with their substantial
penalties, the defenses, “I did not know”
and “I was not aware” are insufficient if
the court or jury believes the officer should have
known or had an obligation to be aware of what was
happening in the company.
Classification of Crimes
Under Florida’s criminal law, crimes are divided into
two major classifications: felony and misdemeanor.
A felony is generally defined as any crime punishable
by death or more than one year in prison. A misdemeanor
is any crime punishable by imprisonment for less than
one year. Felonies and misdemeanors are further divided
into different degrees, dictating the maximum level
of punishment. In addition, punishments vary depending
on whether a natural person or a corporation commits
the crime.
White Collar Crime
White collar crime is the most common type of business
crime. White collar crime is generally used to describe
crimes that have cheating or dishonesty as their common
basis. These crimes typically are committed by professionals
or entrepreneurs under cover of legitimate business
activity. Such crimes may be difficult to prosecute
because of their complexity. Often, they carry lesser
penalties because they are not associated with violence.
However, defendants convicted of white collar crimes
may incur enormous fines, be ordered to pay restitution,
lose professional or business licenses or spend time
in jail.
As a practical matter, it is impossible to describe
every activity that fits within the definition of white
collar crime, because white collar crime takes many
forms. Some criminal actions are prohibited by specific
laws narrowly drawn to outlaw a particular activity.
Other actions are not covered by specific laws but
instead are prosecuted under one or more catch-all
laws that criminalize dishonest behavior.
Conspiracy is the term for a broad category of crimes
involving multiple actors coming together to engage
in concerted criminal activity. A person or business
generally is guilty of conspiracy to commit a crime
if that person or business does one of the following:
*With the purpose of facilitating or promoting its commission,
agrees with another person or business to engage in
conduct that constitutes a crime or an attempt or solicitation
of a crime
*Agrees to aid another person or business in planning,
committing or attempting to solicit a crime
The agreement forming the basis for conspiracy need
not be written, oral or even explicit, but often is
inferred from the facts of the specific case. If the
parties meet and reach an understanding to work for
a common purpose, there is an agreement. For example,
if the producers of a particular product meet to exchange
information on prices and later they set identical
prices, a prosecutor may be able to prove they conspired
to set prices even though there was never an explicit
agreement to do so. Most criminal conspiracy statutes
also require that at least one of the parties has committed
an overt act in furtherance of the conspiracy.
A procedural issue of great importance to parties accused
of conspiracy is whether government prosecutors try
to frame the conspiracy as a hub-and-spoke conspiracy
or as a chain conspiracy. In a hub-and-spoke conspiracy,
many parties (the spokes) conspire with one person
(the hub) but not with other defendants. In contrast
to a hub-and-spoke conspiracy, a chain conspiracy involves
several parties as links in one long criminal chain.
Defendants in chain conspiracies are responsible for
the actions of all participants in the chain, even
if they never met some of the other participants in
the chain.
Specific federal anticonspiracy statutes are found throughout
the United States Code. Florida statutes also contain
anticonspiracy laws. In recent years, a growing number
of white collar criminal prosecutions have included
allegations of conspiracy.
Fraud
Fraud is intentionally lying in order to induce someone
into relying on the lie to part with something of value.
Like embezzlement, fraud can be either complex or simple.
The federal government has three general antifraud
statutes for mail fraud, bank fraud and wire fraud.
Mail fraud is a broad crime with two elements: 1) a
scheme, devised and intended to obtain property or
money by fraudulent means, and 2) using the mail in
furtherance of that fraudulent scheme. The “scheme
to defraud” element of mail fraud is deliberately
broad. It encompasses a wide variety of criminal activity,
including credit card fraud, securities fraud, medical
drug fraud and fraud based on political malfeasance.
Because the mail fraud statute uses such broad language
and because it is relatively easy to prove, mail fraud
is one of the most common charges brought by federal
prosecutors. Charges of mail fraud frequently are made
even in cases in which more specific crimes have been
charged.
The federal wire fraud statute is similar to the mail
fraud statute, but requires an interstate or foreign
transmittal of a communication by wire, radio or television.
This interstate requirement sets wire fraud apart from
mail fraud. An intrastate mailing is sufficient to
trigger liability for mail fraud, while an intrastate
wire, radio or television communication is insufficient
for wire fraud liability.
The federal bank fraud statute criminalizes the conduct
of any party who “knowingly executes, or attempts
to execute, a scheme or artifice to defraud a financial
institution, by means of false or fraudulent pretenses,
representations or promises.” The federal bank
fraud statute is newer than the mail fraud and wire
fraud statutes, so it has not received a great deal
of interpretation in the courts. Because its language
is so similar to that used in the mail and wire fraud
statutes, however, it is expected to be broadly applied
and interpreted.