Business Law (part 7)

Business Torts and Crimes (part C)

 by

 Charles Lamson

Crimes

The news media report on crimes every day so everyone hears about murders, robberies, assaults, and break-ins. Some of these crimes involve businesses or businesspeople.

Business Crimes

Certain criminal offenses, such as arson, forgery, fraudulent conveyances, shoplifting, and embezzlement, closely relate to business activities. Business crimes are crimes committed against a business or in which the perpetrator uses a business to commit the crime.

Types of Business Crimes

The types of crimes committed by and against businesses appear to be limited only by the Ingenuity of the human mind. Many crimes include stealing from the business. In this age of computers, wire transfers, and organized crime, the range of crime has been growing. Today, crimes affecting business include:

1. Theft
2. RICO cases
3. Computer crimes

Theft. Theft is the crime of stealing. It involves taking or appropriating another's property without the owner's consent and with the intention of depriving the owner of it. This definition includes taking and depriving another of property even when the thief initially obtains the property lawfully. 

Some states use different terms to identify the various possible types of theft. As it relates to business, types of theft include such crimes as shoplifting, embezzlement, and larceny. The elements of each of these offences differ somewhat from state to state, but the crimes generally consist of the following:

1. Shoplifting: Taking possession of goods in a store with the intent to use as the takers own without paying the purchase price. In some states, merely concealing unpurchased goods while in a store constitutes shoplifting. The intent required for shoplifting is the intent to use the property as the takers. This crime must be committed in a store by taking store merchandise, so it is always a business crime.
2. Embezzlement: Fraudulent conversion of another's property by someone in lawful possession of the property. Embezzlement requires the intent to defraud the owner of the property. Conversion here means that the defendant handles the property inconsistently with the arrangement by which he or she has possession of it. Since many businesses rely on employees to receive payments and make disbursements, embezzlement is often a crime against the business. 
3. Larceny. Taking and carrying away the property of another without the consent of the person in possession and with the intention of depriving the possessor of the property. The intent to deprive the person in possession of the property must exist at the time the property is taken. For larceny to exist, the taker need not take the property from the owner---merely from the person in possession of it. Larceny can relate to business whenever someone takes any business property, weather inventory, tools, or even office supplies. 

Rico Cases. The Racketeer Influenced and Corrupt Organizations Act, called RICO for short, is a federal law designed to prevent the infiltration of legitimate businesses by organized crime. It prohibits investing income from racketeering to obtain a business, using racketeering to obtain a business (through conspiracy, extortion, and so on), using a business to conduct racketeering, and conspiring to do any of these. The conspirators do not have to do the acts themselves. If they direct the action, they are responsible. The law includes stiff criminal penalties for violation.

However, RICO includes civil sanctions as well as criminal ones. As a result, it has been used by one business against another in cases not involving organized crime. The injured party brings the action under RICO based on the perpetration of criminal activity and requests damages. In criminal cases a government brings the action. To find a business violation of RICO, a plaintiff must show all of the following:

1. Conduct
2. Of an enterprise (at least two people)
3. Through a pattern (at least two acts within 10 years)
4. Of racketeering activity

Racketeering activity means activity labeled criminal under state or federal laws. Examples of such activity include murder, kidnapping, arson, robbery, bribery, extortion, distribution of illegal narcotics, prostitution, and white collar crime such as mail fraud, money laundering, and securities fraud. The defendant does not have to have been convicted; it is enough just to have engaged in activity for which a conviction could be obtained. This makes it easier to win a civil RICO case than a criminal case.

Civil suits under RICO have been very popular because of the liberal damages available. Rather than allowing merely compensatory damages, RICO provides recovery of three times the damages suffered. It also allows the recovery of attorney's fees, which can be a substantial sum.

In addition to the federal RICO, many states have passed so-called Baby RICO laws. Similar to the federal law, these laws apply to activities an intrastate (within a state) commerce. The federal law has jurisdiction over interstate (between states) commerce. 

*SOURCE: LAW FOR BUSINESS, 15TH ED., 2005, JANET E. ASHCROFT, J.D., PGS. 28-31*

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