Source: http://www.4lawschool.com/outlines/bank/whitecollar.htm
Timestamp: 2019-04-24 08:27:33+00:00

Document:
o MPC not the federal law, but it is very influential.
o And legislative purpose to impose liability on corporation plainly appears.
§ Recklessly tolerated- there is a mens rea requirement.
A legislative purpose to impose liability on a corporation shall be assumed. Unless the contrary plainly appears.
o The federal courts observe the respondeat superior rule of corporate liability. Under the federal rule, a corporation is liable for the acts of its agents without regard to their status in the corporate hierarchy, and liability attaches without a showing of managerial complicity. Although the efforts of corporate management to prevent criminal misconduct may affect a prosecutor’s decision whether to prosecute, management’s due diligence is not a defense to a federal charge.
o Commonwealth v. Beneficial Finance Co.
§ Burden of proof to convict a corporation for the acts of its agents is sufficiently met if it is shown that the corporation has placed the agent in a position where he has enough authority and responsibility to act for and in behalf of the corporation in handling the particular corporate business, operation or project in which he was engaged at the time he committed the criminal act.
§ In this case, it was held that the resulting corporation is criminally liable for the criminal conducts of one of the corporations that merged.
§ Law prohibited throwing garbage into harbor waters. ?’s ship employee threw garbage into the water even though ? had prohibited such conduct and signs were posted. But still liable. According to the Court, “having committed his ship to the seas, an owner takes the risk of much which he cannot easily control. Any other construction would change the statute from one of prohibition to that requiring merely due care."
o United States v. Hilton Hotels Corp.
§ A corporation is liable under the Sherman Act for the acts of its agents in the scope of their employment, even though contrary to general corporate policy and express instructions to the agent.
o Due Diligence Defenseà Company’s good faith compliance efforts. Not really accepted defense anymore.
o NY Central & HudsonàCorporation punished under criminal law. Corp argued that this punished innocent shareholders, also no evidence that board of directors had authorized the illegal acts.
o Central National Bankàsuccessor corporation can be held liable for actions committed by agents of predecessor corporations. Also corporation can be indicted for a crime even if it is dead.
§ C.the commission of the offense was authorized, requested, commanded, performed or recklessly tolerated by the board of directors or by a high managerial agent acting in behalf of the directors or by a high managerial agent acting in behalf of the corporation within the scope of his office or employment.
o MPC provides “due diligence" defense where not contrary to legislative purpose.
o MPC provides a more restrictive test for corp liability. (a) applies to criminal cases where MPC general interpretative principles apply but where the specific criminal offense is not itself defined under the MPCàthere must be a clear legislative intent to impose liability on corps. Such clear intent is not a requirement in respondeat superior.
o (c) gov must show that agent’s act was approved or recklessly tolerated by high level management. No such requirement in RS.
Corporation convicted under antitrust law. ? argued that it cold not be guilty under statute because statute only provided imprisonment and corp can be imprisoned.
Court rejected: 1. statute provided that a person could be convicted, 2. the statute defined the term person to include corporations, and 3. the law provided that a fine could be imposed.
In this case, car dealership owned by close corp owned by one person. General manager committed license fraud not known to the owner. Court held that general manager was not a high managerial agent.
In this case, car salesman and mid level manager filled out rebate forms. An officer signed the rebate applications and the president was aware of the dispute. Benefited the corp, so held liable.
§ People v. Lessofàlaw firm partner= high managerial agent.
o Both MPC and RS require that agent have been acting on behalf of the corporation.
v Commonwealth v. BeneficialàCt. rejected the high managerial requirement of MPC and instead adopted RS because MPC too lenient and allows coprs to hide behind actions of low level employees.
o Dollar SteamshipàCorp held liable for employee’s act of throwing refuse into harbor. Company showed that its employees were advised of its policy against such dumping, ships officers had no knowledge, company had taken reasonable steps to prevent the dumping. Ct. rejected because statute imposed strict liability and due care no defense.
o US. v. Hilton HotelsàAgent involved in antitrust despite the company program and manager’s instructions. But ct. still affirmed corp conviction because corp not the employee benefited.
o Under RS, Corp not liable where acts not intended to benefit corp. But where agent and corp both benefit= liable. Actual benefit not needed. Agent’s intent rules.
o Standard Oilàemployees actions solely for personal benefit and actually harmed the corp. Therefore, corp not liable.
o Steere Tank LinesàHere also, actions of truckers in falsifying records solely for personal benefit. But here corp held liable because the work environment fostered such reporting and the management knew of this practice, so sufficient to show company’s intent.
o What happens when corp liability doctrine applied to crimes other than strict liability.
o Under strict RS, proof of mental state of the agent who committed the wrongdoing is all that is needed and no need to show that management possesses this.
o But some fed courts require more especially when crimes require knowledge or willfulnessàso not really applying RS.
§ Corporate mens rea can be shown through collective knowledge.
v Like attempt, conspiracy is an inchoate crime. Crime is complete when two or more people agree to commit a crime. Unlike attempt, conspiracy doesn’t require a substantial step toward the crime.
§ Theory that co-conspirators are responsible for each other’s acts.
o Conspiracy, unlike attempt, does not merge with the object crime.
o Defraud clauseàcriminalizes conspiracy to defraud the US. Includes both schemes to deprive the US of money or property (e.g. taxes), and schemes to obstruct or interfere with government functioning or to deprive the government of information.
? intended to defraud the wineries by mislabeling grapes. Court said that no conspiracy to defraud the US because ? intended to defraud the wineries not the US.
US made loans and ? tried to misuse loans. Conspiracy conviction upheld because US has a fundamental interest in the manner in which projects receiving its aid are conducted.
SC held that just because a private corp received gov. funding doesn’t make scheme to defraud that private corporation a crime against the US.
§ The actus reus is the agreement itself.
§ It is not necessary that all co-conspirators be charged or convicted or even known to the government for an individuals to be found guilty of conspiracy.
That the object crime or crimes be committed.
§ Need intent to agree and intent that the object offenses be committed.
§ Specific intent crime therefore ? must consciously desire the criminal result.
Mere knowledge of illegal activity, even in conjunction with participation in a small part of the conspiracy is not enough sufficient to establish that minor participant knowingly joined the conspiracy.
§ ? need not specifically intend that all the object crimes be committed.
§ ? need not know all the details of the object crimes. General knowledge ok.
§ The general federal conspiracy statute requires the government to prove an overt act in furtherance of the conspiracy.
§ Overt act is any act, or failure to act, by any co-conspirator during and in furtherance of the conspiracy.
§ Need not show overt act by each co-conspirator. Act by one attributable to others.
v Mail and wire fraud very often used because statutes are relatively simple requiring in the most basic terms a scheme to defraud and the use of mail and wires. Also statutes are extremely flexible.
o whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises,… for the purpose of executing such scheme or artifice or attempting so to do, places in any pose office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing.
o Wire fraud relies on commerce clause so must be interstate or international. ? doesn’t have to know that wire would cross state lines.
§ Durland v. United Statesà Court concluded that “any scheme or artifice to defraud" includes everything designed to defraud by representations a to the past or present, or suggestions and promises as to the future. The significant fact is the intent and purpose.
§ ? must intend that deception go to the substance of the bargain between the defendant and the intended victim.
§ Economic substance requirement. Mere puffing will not support mail fraud “e.g. this is the best car."
§ US v. Regent office SupplyàSalesperson tells receptionist that knows the boss and this way sells the items. But not mail fraud because legit items sold at legit price.
§ Lustiger v. USà ad to sell property went beyond puffing so false and misleading.
§ Material acts of omission or concealment can give rise to mail fraud.
§ US v. Siegelà?s made scheme to misuse proceeds form sale of employer’s products. Since breached their fiduciary duties to the corporation by failing to reveal their scheme to the company and its auditors, met the deception element of the wire fraud statute.
§ Intent to defraud is the key. Mail fraud requires proof of a specific intent to defraud. So if ? acted in good faith (e.g. acted with good will and without intent to harm) will provide a complete defense to the charge.
§ Nader v. United Statesàthe mail and wire fraud statutes require that the scheme to defraud involve a material deception. ? convicted for mail fraud for fraudulent bank loans applications. ? argued on appeal that trial judge erred by failing to require that the jury find the ?’s misstatements were material to the transactions. SC agreed.
Some circuits rule that material if a reasonable person would believe the fraudulent statements. Other disagree.
§ A mailing need not be essential to the fraudulent scheme and may even be incidental to the scheme.
§ United States v. Schmuckà? sold cars to used car dealers and rolled back the odometer. Dealers not involved in this. Dealers when selling cars mailed change forms to the state. Ct. held that this was sufficient for mail fraud. According to the Court, a failure in this passage of title would have jeopardized ?’s relationship of trust and goodwill with the dealers upon whose unwitting cooperation is scheme depended.
§ US v. Mazeà?s committed credit card fraud and the merchants who accepted cards mailed bills for payment to the credit card issuer. Ct. found that such mailing were not in furtherance of the underlying fraud.
§ If mail and wires are too far removed from ?’s plan, they mail fail even if the se of the mails and wires is in support of ongoing schemes (e.g. the NCAA case).
§ Even after fraud complete, if mail used to cover up or delay the detection, then the condition of use of mail suffices. E.g. case where burned house and got insurance money. But then sent false invoice to insurance company. Also case where fraudulently got money from people promising them that they will help obtain loans. After got the money from victims kept sending them letters that they will help them with the loans soon.
The false-statement rule (in some circuits- Note a on 184)- if the legally required mailing has the false statement in it, you are dead. You were legally required to make the statement but not lie in it. So it is sufficient mailing hook. This results in stacking of charges. But attorney general manual says that US attys shouldn’t stack charges this way.
§ The other view: Esterbrook in Green (184 note b)- If legally required mailings are important to the success of scheme, so looks at the intent. But this opinion is not being followed much.
§ In addition to requiring that the mail was in furtherance of the fraud, the courts have also required proof that the ? caused the mailing.
§ Causation requirement is usually proven by showing that ? knew or should have reasonably foreseen that the mail would be used as part of the scheme.
§ Pereira v. USà? induced the V to make some payments to him. ? deposited the check and check mailed to the bank in CA. ? claimed that didn’t cause the check to be mailed. The court disagreed. It is in common knowledge that checks are sent to the banks on which they are drawn, and ? knew or should have known that the Texas bank would mail the check to the CA bank.
§ SO GOVERNMENT HAS TO PROVE BOTH IN FURTHERANCE OF FRAUD AND THE CAUSATION ELEMENTS.
o US v. Carpenterà? working for Wall Street Journal and issued articles that affected stock prices and before publishing, traded stocks and made profits. ? argued that he did not deprive Wall Street of any property or money. Court disagreed. Paper was deprived of the rights to keep the information confidential and to have exclusive use of the information prior to its publication.
? lied in his application for a gambling license. Court held that unissued permits or licenses are not property. Even if a license may become property owned by the recipient after the license is issued, it is not property of the state or local authority that has the power to issue the license or permit.
o ? lied to US that weapons will be sold to some other county than Iran. Court held that this scheme did not involve a loss of money or property. The only right gov. had was to restrict the weapons’ destination, which was akin to a regulation but was not a property right.
§ For purposes of this Chapter, the term “scheme or artifice to defraud" includes a scheme or artifice to deprive another of the intangible right of honest services.
Minority Rule: Brumleyàviolation of state law required. Federalism concerns.
§ Fifth circuit affirmed the ee’s conviction for defrauding his er, a manufacturer, by arranging for it to buy raw materials from a firm in which ? had an interest. Even if no actual economic harm is shown, an ee can be liable so long as such harm was reasonably foreseeable. Because the er was deprived of the benefit of choosing among competitive suppliers, such harm was foreseeable.
§ Eighth Circuit required proof of intent to cause tangible harm from the fraudulent scheme. A psychologist was convicted for a receiving kickbacks from a psychiatric hospital. Court found that though the government had strong evidence of a patient referral kickback scheme, it had no evidence of tangible harm to the patients. The court rejected the argument that this case fell within the honest services provision of § 1346 noting that such cases are generally been brought against public employees.
o So the duty of honest service is pretty limited in private sectoràCts require actual harm.
v US v. Maze- when statute covers specific type of mail fraud, can you be charged with both it and mail fraud?
o But mostly now they can be charged with one or both.
o Extortion by exploiting fear of economic harm.
o Unlike federal crimes of bribery and gratuity, the federal crime of extortion under color of official right is not limited to federal public officials. So Hobbs can be applied to state and local officials.
v Extortion is an inchoate crimeà so covers inchoate conduct of conspiring or attempting to commit extortion. Because no general attempt statute under fed law, the crime of attempted extortion exists only because the statute itself contains this provision. But the conspiring to commit extortion could be charged under the extortion statute or under § 371, the general federal conspiracy statute.
o Courts have held that any moiré, or de minimis, effects on commerce will suffice. Under the depletion of assets theory, almost any extortionate activity will produce federal jurisdiction.
o Gov must show that ? obtained, or attempted or conspired to obtain, property from another. This has rarely provided a barrier to extortion prosecutions. E.g. interference with the right to participate in labor unions constitutes property deprivation. Anti-abortion activities implicate Hobbs Act.
o No mens rea required with respect to the jurisdictional requirement.
o Where fear- gov has to show that ? purposefully or knowingly used force, induced fear, or exploited the victim’s fear.
o Where color of law, gov must show that ? purposefully or knowingly used an official position to obtain property.
o May be by fear of physical or economic harm. ? must intend to take advantage of the victim’s fear. The prosecution need not show that ? created or attempted to create the fear.
o United States v. Capoà?s involved in job selling scheme. The plant needed large number of new employees. Prospective Ees paid ? who used their influence to ensure that these applicants received jobs. ?s charged for extortion based on theory that created fear of economic harm.
§ Second circuit ruled that there was insufficient evidence that victims acted out of fear. Whether there is fear must be viewed form the victim’s perspective. Gov. must show that the victim both actually and reasonably believed first that the ? had the power to harm the victim and that ? would exploit that power to the victim’s detriment. Here the activity was bribery and not extortion.
§ Principleàwhere a payer seeks to obtain an economic benefit rather than to avoid an economic loss, it is briber not extortion.
? elected county official. Undercover FBI agent sought ?’s help in zoning matter and gave ? $7K cash and 1K in check. ? only reported 1K. ? argues that no extortion because did not induce. Court rejected. The gov. need only show that a public official has obtained a payment to which he was not entitled, knowing that the payment was made in return for official acts. Here although ? did not initiate the transaction, his acceptance of the bribe constituted an implicit promise to use his official position to serve the interests of the bribegiver.
§ After Evans, line has become really blurry.
Receipt of campaign contributions may constitute extortion only where 1. the payments were induced by the use of force, violence, or fear, or 2. the payments were made under color of official right, i.e. in return for an explicit promise or undertaking by the official to perform or not to perform an official act.
o Most courts agree that quid pro quo is required in color of law extortion cases.
v § 201 criminalizes both the receipt of bribes and gratuities by, and the giving of bribes and gratuities to, federal public officials.
The ?’s scheme was designed to influence the public official in an official act.
The scheme’s design was that the ? be influenced in an official act.
The ? intended that the thing of value be given as compensation for an official act already performed or to be performed otherwise than as provided by law for the proper discharge of the ?’s official duty.
The ? received or agreed to receive the thing of value as compensation for an official act already performed or to be performed, otherwise tan as provided by law for the proper discharge of the ?’s official duty.
o Party’s intention provides the key distinction between bribery and gratuity.
o Briberyèintent that the public official be influenced in a particular way in connection with a particular official act.
o Timingà if ? formulates an intent to give the payment knowing that public official has already performed or decided to perform the official act, then only a gratuity charge is appropriate. Timing of the intent to pay is important, not the payment itself.
v Bribery is an inchoate crimeà the payment need not actually influence the public official so long as it was made with the necessary intent.
o Gov. must show that ? in a bribery or gratuity case offered to give or receive something of value.
o US v. Williamsà2nd circuit held that value is defined by ?’s subjective view, not by an objective measure. In this case, even though stock offered worthless, still he personal belief was controlling.
o US v. Gormanà? charged with gratuity for receiving a loan and future employment. ? argued no value because repaid loan with interest and any salary from employment in exchange for his work. Ct. said value because at the time he couldn’t get loan form anyone else and also employment at substantially higher salary than his gov. position.
o Any federal officer or employees will generally qualify.
§ Dixon v. USà?s employees of a corporation that received portion of federal housing block grants given to the city of Peoria. SC found them to be federal public officials. Whether ?s occupied a position of public trust with official federal responsibilities. YES.
§ To date lower courts applying Dixson have found that private actors and state and local employees are federal public officials if they have any responsibilities relating to federal matters. (e.g. a state deputy sheriff with authority over federal and state prisoners in a county jail, a lower-level corporate employee responsible for determining eligibility for federally-subsidized housing.
§ Gov. must show that the bribing party intended to influence a public official in an official act. In gratuity, must show that payment was intended as compensation for an official act.
§ § 201 defines official act as any decision or action on any question, matter, cause, suit, proceeding or controversy, which may at any time be pending, or which may by law be brought before any public official, in such official’s official capacity, or in such official’s place of trust or profit.
? a US Small Business Administration loan officer solicited money form person in order to approve loan. But had already approved loan and argued that he could not be convicted of bribery because he cold not actually be influenced in his official act because he had already undertaken the act when he solicited the money.
7th circuit upheld the conviction. The key point is the ?’s understanding of what the payer believes he is paying for.
§ But if public official receives something of value in a purely private venture, then there is not official act.
§ It is not necessary that both parties have same intent. So donor may be convicted of giving a bribe despite the fact that the recipient had no intention of altering his official activities or even lacked the power to do so.
o Sun-Diamond was trade association engaged in marketing and lobbying on behalf of members. Chard with paying gratuities to Secretary at the time payments made, two matters of importance to ? were pending before secretary. The gov. did not prove any specific connection between these official matters and payments.
o Court reversed. Simply finding that a payment was made to create goodwill, which might affect future official acts, is insufficient. To obtain a gratuity conviction, the government must show that the party intended to make the payment for specific official acts.
§ The entity for which the ? acted as an agent received more than $10,000 a year in federal assistance.
§ ? a local sheriff who received bribes from prisoner for contact visits. Prison also held fed prisoners and that’s why received >$10K fed funding.
§ Supreme Court held that in a § 666 case, the government is not required to prove that the bribes affected federal funds by, for example, diverting or misappropriating them. Court held that statute prohibits bribery in connection with any business, transaction, or series of transactions. The statute does not require that the bribe divert, misappropriate, or otherwise directly affect federal funds.
o Fischer v. USàSC held that a health care provider who received Medicare payments received benefits and thus was subject to prosecution under § 666 even though the individuals were the beneficiaries of the program.
§ To create, distribute, or dispense or possess with intent to distribute or dispense, a counterfeit substance.
D must know that the material is controlled substance but need not know the specific identity of the substance.
o 1. possessing 2. a controlled substance, 3. knowingly or intentionally 4. with intent to manufacture constructive possession- either sole or joint.
§ Constructive possession: the ability to obtain actual physical possession of property by ownership or by dominion and control over the person with actual possession or the property’s situs.
§ See above. Neither quantity or quality are an issue.
§ 1. distributing: the term distribute means to deliver (other than by administering or dispensing) a controlled substance… The term distribute means a person who so delivers a controlled substance or a listed chemical.
o 1. dispensing 2. a controlled substance 3. knowingly or intentionally 4. without a legitimate medical purpose or outside the scope of normal medical practice.
o 1. dispensing: the term dispense means to deliver a controlled substance to an ultimate user or research subject by, or pursuant to the lawful order of, a practitioner, including the prescribing and administering of a controlled substance and the packaging, labeling or compounding necessary to prepare the substance for such delivery. The term dispenser means a practitioner who so delivers a controlled substance to an ultimate user or research subject.
§ Examples: a. prescribing a controlled substance for someone who is not ill; b. filling a fraudulent (or counterfeit) prescription, c. repackaging or relabeling a controlled substance contrary to the statute.
o All circuits that have been presented with the issue have held that, even after Lopez, that purely local drug activity is within the scope of the CC. Interstate drug transactions are clearly within the scope and purely local activities are within the clause of activities, etc.
o Court held that the statute requires the weight of the carrier medium to be included when determining the appropriate sentence for trafficking in LSD, and this construction is neither a violation of due process, nor unconstitutionally vague.
§ crack cocaine is a substance that is distinguishable from other forms of cocaine based on appearance, texture, price, means of consumption, the character and immediacy of effects of use and chemical composition.
§ Cheapness and accessibility of crack could create other societal problems which required remedying.
o Concurrence: this ration is adversely affecting the black communities around the country.
v 31 USC § 5313 requires that banks and other financial institutions file with the IRS currency transaction reports (CTRs) of all case transactions of more than $10K.
v § 6050 of IRS Codeàanyone in a trade or business must report to the IRS cash receipts of more than $10K.
o Section 6050I requires persons who receive over $10K in cash in the course of their trade or business to report the transaction to the government on IRS Form 8300. Filing a false report or failing to file is a crime.
§ These monetary instruments are considered to be cash only if 1. they were received during designated reporting transactions or 2. where the recipient knows that the instrument is being used to avoid the reporting requirement.
§ A designated reporting transaction is defined as the retail sale of a consumer durable, a collectable or a travel or entertainment activity.
§ A collectible includes any work of art, antique, metal, gem, stamp or coin.
5. In one transaction or in two or more related transactions in a 24-hour period.
o The trade or business knows or has reason to know that each transaction is part of a series of transactions.
o SC ruled that the term willful in the statute requires proof that the ? knew structuring he undertook was unlawful. But later Congress removed the willfulness requirement from structuring. Courts have held that intent to violate the law is not an element of structuring under § 5324, but is an element of structuring under 6050I.
REMEMBER, NO ATTEMPT PROVISION HERE! FED LAW DOESN"T HAVE GENERAL ATTEMPT CRIME!
§ Scope: conspiracy law applies, but there is no attempt provision.
o This section creates two offenses: 1. failure to file and 2. false filing. There are no cases (and apparently no prosecutions) dealing with false filing. Accordingly, we focus on the failure to file offense.
The definitions include formal entities and any person acting in one of the above listed capacities whether or not on a regular bais or as an organized business concern. (31 C.F.R. Section 1-3.11(n).
Transaction: a currency transaction is a transaction involving the physical transfer of currency from one person to another, excluding the transfer of funds by bank check, bank draft, wire transfer or other written order.
o The transaction must amount to over $10,000 of cash in or out in a single day.
o The institution must have knowledge of both a & b.
Not filing treasury form 4789 within 15 days of the transaction.
§ Scope: conspiracy law applies, but there is not attempt provision.
§ Structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions.
o Courts have held that clt can just avoid the § 6050I’s reporting requirement by paying atty other than by cash.
o Specified unlawful activities include wide range of white collar crimes and other crimes. Mostly drugs.
o Statute defines “knowing that property involved in a financial transaction represents the proceeds of some form of unlawful activity" where the ? knew the property involved in the transaction represented proceeds form some form, though not necessarily which form, of activity that constitutes a felony under State, Federal, or foreign law.
§ the ? knew that the financial transaction involved the proceeds of some type of unlawful activity, which activity constitutes a felony under state, federal, or foreign law.
The ? engaged in the transaction knowing that the transaction is designed in whole or in part to avoid the currency transaction reporting laws.
§ Shall be punished according to the statute.
§ Avoid a currency transaction reporting requirement.
o NOTE 1956a1 deals with domestic whereas 1956a2 deals with foreign transport. A1 deals broadly with “financial transactions" whereas a2 only deals with transactions involving “monetary instruments"
o unlike 1956, 1957 doesn’t deal with attempts to hide the source of dirty money, but focuses on the use of such funds within the financial system.
§ The transaction took place in the United States or the ? is a “US person"
§ The ? had knowledge that the property was derieved from some form of unlawful activity.
o NOTE: 1957 makes exception for drug ?s when states that “such term does not include any transaction necessary to preserve a person’s right to representation as guaranteed by the 6th amendment to the Constitution."
only need to prove that knew the laundered money or property come from some kind of unlawful activity. Actual knowledge or willful blindness will work but negligence or recklessness will not.
US v. Campbellà? real estate agent and clt represented himself as bizman and then told the home seller to take $60K under the table. ? helped in this transaction. Ct. said that willful blindness. Also, whether ? knew is a jury question.
§ one of four alternative theories.
o Mere spending of dirty money in the absence of design to conceal not enough. Remember “money launder" not “money spending"
o US v. Jacksonà? was minister + drug dealer and deposited dirty money in church account and used it for personal expenses. Court said that both elements met. ? knew that money dirty and deposited it in the church account with the clean money to conceal dirty money.
o The government must rove that the defendant intended that the illegally-derived money be used to further the activity.
o Johnson case where investor fraud and ? bought house and expensive car and ct. said to promote unlawful activity because were used to impress investors.
o § 1957 only requires the government to show that ? engaged in a monetary transaction of more than $10K derived from specified unlawful activity, and that ? knew the money was derived from some form of unlawful activity.
gov has to prove that ? engaged in a monetary transaction in criminally derived property. Criminally derived prop defined as any prop constituting, or derived from, proceeds obtained from a criminal offense.
If at the time of the monetary transaction, the ? had not actually completed the crime and received the illegally-obtained funds, can’t be held liable. Only transactions occurring after the proceeds have been obtained from the underlying unlawful activity are covered.
§ requires that financial transactions at issue in fact involve the proceeds of specified unlawful activity. Timing defense less successful under 1956.
§ Under 1957, courts are split. Us v. Rutgardà? surgeon who operated two eye care clinics that served Medicare patients. Gov showed that clinic routinely submitted fraudulent claims for Medicare payments. Convictions based upon two large wire transfers out of Rutgard’s account. 9th circuit reversed conviction because gov was required to trace the transferred funds to MedCare fraud. Unlike 1956 with two level mens rea requirement, 1957 merely requires proof of knowledge that the funds were tainted. So where commingling, 1956 better route to take.
§ According to the court, commingling would not frustrate the purpose of 1957 because to prevail, the gov need to show only a single $10K deposit of criminally-derived proceeds. Commingling will frustrate statute if criminal deposits have been kept under $10K. But that is the way the statute is written, to catch only large transfers.
v RICO does not create any new underlying crime but criminalizes repeated predicate acts. Therefore, there is not separate mens rea requirement for RICO.
o The racketeering activity affected interstate commerce.
o A-C are considered substantive RICO theories.
§ Prohibits any person from using or investing any income derived from a pattern of racketeering activity in an enterprise.
§ E.g. Mislabeling crude oil and using the profits to invest in a company ?s had established, the enterprise. Investing proceeds from narcotics offenses in an Alaskan gold mine, the enterprise.
§ Prohibits any person from acquiring or maintaining control of an enterprise through a pattern of racketeering activity. Least frequently used.
§ E.g. ?s members of ongoing criminal confederation who had acquired interest in and control of a labor union through acts of extortion and murder.
§ Makes it unlawful for any person employed by or associated with any enterprise to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity. Most often used and covers issues such as Medicare fraud, bankruptcy fraud.
§ Conspire to commit A-C. Thus a ? violates RICO itself, and not only § 371 if ? enters into an agreement to violate any of the three substantive subsections of § 1962. Unlike § 371, no overt act requirement.
The main sheriff took bribes from prisoner for contact visits. ? was a deputy at the prison and he made some of these visits possible. Gov. said that ? conspired to commit Càconduct the activities of the enterprise (prison) through racketeering activity. Court upheld his conviction even though he personally didn’t agree to commit all of the acts needed for C. As long as the sheriff and ? had common goals, D met.
o Enterprise- any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.
o National Organization of Women v. Scheidlerà No economic motive requirement.
o Here it met because medical group and law firm provided other lawful services other than the fraudulent ones.
§ Circuits are split on whether the enterprise structure can be shown by proof of the illegal activity itself or whether the government must show that the enterprise had a structure distinct from the illegal activity.
o Gov alleged that ?s violated 1962(c) by associating with an enterprise “described as a group of individuals associated in fact to fraudulently sell securities of agricultural cooperatives. Court rejected this as an enterprise because statue designed to protect against infiltration of illegal activities into legit biz and not to prohibit individuals who simply associate for purposes committing the predicate acts.
o Proof of an enterprise separate form the racketeering activity can be inferred from proof of that activity. Existence of a group of individuals repeatedly committing predicate offenses alone does not constitute an enterprise absent some proof of organization. That proof can be inferred from the racketeering activity itself.
A common or shared purpose A common or shared purpose No distinction, except (perhaps) for a difference in the type of proof required.
Functioning as a continuing unit Organization The majority focuses on the durability beyond the predicate acts, whereas the minority focuses on the existence of an organization.
Usually, must have evidence beyond the predicate acts Proof of the predicate acts may suffice The majority focuses on the distinction between the enterprise evidence and the predicate acts evidence, whereas the minority allows the proof to completely overlap.
v Naming the enterprise as ?
o Courts agree that no barrier against this under subsec a and b.
o Most courts hold that enterprise cannot be named as ? under c. Language of this section requires a relationship between the person and the enterprise so separate.
§ Under C, a person who runs a solely owned corporation, biz be the ?.
? president and sole shareholder of a closely held corporation. SC held that the C applies when a corporate employee unlawfull conducts the affairs of the corporation of which he is the sole owner, whether he conducts those affairs within the scope, or beyond the scope, of corporate authority.
§ Can a corporation be the enterprise and its employees be the ?? OF COURSE! Under Subsection A, could you have sued Corp,YES.
§ Can a wholly owned subsidiary be the enterprise and the parent corporation be the ?? YES.
§ McCullough v. Suteràsole proprietorship can be an enterprise that the proprietor can be associated with, as long as that sole proprietorship has existing employees.
§ Fitzgerald v. Chrysler Corpàcourt held that it was not appropriate to name Chrysler and various of its subsidiaries and agents as an enterprise under Subsection 1962(c). Court noted that this is not a normal subsidiary context. “we cannot imagine is applying RICO to a free-standing corporation such as Chrysler merely because Chrysler does business through agents, as virtually every manufacturer does." If Chrysler was conducting all biz through employees, then couldn’t have been held liable.
Accounting firm conducted one audit for the cooperative. Supreme Court held that this wasn’t enough.
In order for an outside firm to be liable, it must have associated with the enterprise and must also have had some part in directing its affairs.
o State crimeàwill not qualify as a RICO predicate if maximum penalty for a state crime is one year or less.
§ State offenses: ten offenses listed generically: “any act or threat involving…" the ten.
§ All others: depends on whether conspiracy is included in the definition of the offense. If yes, no problem. If no (371 alone) not possible.
o ? must engage in a pattern of racketeering activity: requires at least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within 10 years (excluding any period of imprisonment) after the commission of the prior act of racketeering activity.
o Northwestern Bell Telephoneà ? alleged that ? bribed public officials over a six-year period in order to influence phone rates.
o Minimum number of predicate acts (2) are needed to establish a pattern but something more is needed. That requirement is met if relationship plus continuity.
o Relationship is established if acts have same or similar purposes, results, participants, victims, or methods of commission or otherwise are interrelated by distinguishing characteristics and are not isolated events.
o OPEN-ENDED Pattern- even if racketeering activity has occurred only over a short time, continuity can be demonstrated by the implicit or explicit threat of repetition extending into the future.
o Multiple schemes not needed.
§ For closed-ended, most cts will reject RICO if lasted for less than 1 year.
It shall be unlawful for any person to conspire to violate any of the provisions of subsections (a), (b), or (c) of this section.
Substance: to commit a target offense, but each conspirator need not agree to commit all of the acts necessary to complete the target crime.
Wharton’s Rule: there is no conspiracy when the crime necessarily requires the participation of two persons for its commission. Now a presumption in federal courts.
The split in the circuits: MAJORITY: RICO is the same as 371; Minority: Each RIOCO conspirator must commit or agree to commit the required two or more predicate acts.
The relationship between 371 & a RICO conspiracy: cumulative!
§ Rule 11 Sanctions: applies to Civil RICO.
v § 1001 applies to unsworn statements made to the government.
o Making or using any false writing or document knowing it to contain ay materially false, fictitious, or fraudulent statement or entry.
o the ? made the statement within the jurisdiction of the executive, legislative, or judicial branch of the federal government.
o Oral, written, sworn, unsworn, past, present, future, voluntary or coerced by law, and silence when one has a duty to speak (e.g. when carrying >$10 out of country and not report, can be convicted of false statement).
§ Brogan v. USà Exculpatory No is covered under the false statement law and is not prohibited by the 5th Amendment. Person has to right to keep quiet but not lie. But A.G. Manual discourages this.
Where statement is subject to two plausible interpretations, the burden on gov. to prove that ?’s intended to use the false one.
o Materiality is an element of every case brought under the statute.
o Materiality: a natural tendency to influence, or be capable of influencing, the decision of the decisionmaking body to which it is addressed.
o Materiality is a jury issueà some judges are still not doing this, so if prosecutor, have to insist.
o Rationale? This is a conduct crime.
§ ? had the knowledge at the time statements made. Knowledge can be established by evidence of actual knowledge or by evidence that ? intentionally or recklessly avoided learning whether the statement was true or false.
The gov need not prove that the ? knew that the statement fell within a matter of federal jurisdiction.
US v. Yermianà? applied for employment with private defense K and K forwarded application to defense department and ? lied in application. ? argued that didn’t know app would go to fed gov. SC rejected this argument and ruled that no knowledge needed in regard to the jurisdictional requirement. SO strict liability with jurisdiction.
§ Gov. must also prove that the ? acted with the intent to deceive.
§ Hilderbrant, Note 590àMistake of law is not applicable. So mistake has to be as to the facts, not law.
o US v. Rodgersà? lied to FBI and Secret Service that wife kidnapped and planning to kill wife. SC held that this was within the jurisdiction of these federal agencies. Ct. gave a wide definition to this element.
o US v. Lutzà violation of § 1001 does not require that the false statement be made directly to, or received by, the federal department or agency. The statute only requires the false statement to have the natural tendency to influence or be capable of influencing a federal agency.
o The unemployment split- Note 5, 584. LOOK AT IT.
§ There is no clear congressional intent to prohibit multiple charges.
o US v. Woodwardà Prosecution for both 1001 and 5316. ? lied and said not transporting over $5K but in fact transporting $20K. Charged with § 1001 and currency reporting. Court said ok because 1. § 1001 prohibits the failure to by any trick, scheme, or device to conceal a material fact. But in the currency reporting, a person could simply and willfully fail to file a currency disclosure report. Also second prong met because no intent on part of the Congress.
§ § 1623 only applies to court and grand jury proceedings.
o The ? knew the statement or information was false.
o Test for materiality is not whether statement had any actual effect on the proceeding but whether the statement has the capacity or tendency to influence the outcome of the proceeding.
§ BronstonàSC held that a literally true statement will not suffice for a conviction.
§ Under 1623 but not under 1621, the government may prove falsity by proving that the ? made two or more declarations which are inconsistent to the degree that one of them is necessarily false. In order for the inconsistency to suffice for conviction, each statement must be material to the point at issue and must have been made within the statute of limitations period.
§ Both 21 and 23 require that government prove beyond a reasonable doubt that the ? knew the statement was false at the time it was made.
§ 1621 unlike 1623 requires that in addition to proof of knowledge, the gov prove that the ? acted willfully. As a practical matter, once it has been proved that ? knowingly made a false statement, a jury can naturally infer that the ? intended to deceive.
o Gov must prove beyond reasonable doubt that the false statement was material. Material statement is that which is capable of having an effect on the tribunal or proceeding. I.e. a statement is material if a truthful statement would assist in the matter. No showing needed that tribunal or proceeding was actually affected.
§ ? told gov investigator that G committed robber and signed a statement. Later at grand jury denied. At 1621 trial, gov presented the testimony of the investigator and the only the signed note as corroborating evidence. Court said that this was enough corroborating evidence because it doesn’t independently has to show perjury. Also, ct. rejected ?’s argument that his own acts could not provide the corroboration.
§ Therefore, corroborating evidence need not be strong nor even independently sufficient in itself, it may be supplied by ?’s own conduct.
o 1623 doesn’t follow this rule and gov can prove that the witness made two inconsistent declarations under oath, one of which is necessarily false, without proving which of the two statements is false.
It has not become manifest that such falsity has been or will be exposed.
§ ? lied and after found out that would be discovered, recanted.
§ Court ruled that recantation defense only where false statement has not substantially affected the proceeding and if it has not become manifest that the falsity has been or will be exposed.
o A ? can be charged with perjury even if the allegedly perjurious testimony was given under a grant of immunity.
o Immunity statute states that such testimony may be used for prosecution for perjury, giving false statement, or otherwise failing to comply with the order.
§ Truth immunized statements can also be used in addition to the false immunized statements to show perjury. In this case, court used true immunized statements to place the false statements in contextàSC ruled it was OK.
o The test for whether perjured testimony subsequently can be used despite the absence of target warning is whether, considering the totality of the circumstances, the free will of the witness was overborne.
o The government creates a perjury trap when it calls a witness before the grand jury for the primary purpose of obtaining testimony to later use to prosecute the witness for perjury.
o Government must prove that the ?
Interfering with production of documentsèeven documents that have not been subpoenaed may be covered so long as ? has the corrupt intent.
Making false statements to government agents. As in 1001.
o An attorney who advises clt to take 5th though it is of no advantage to the clt, but will help another clt of the lawyer’s suffices as obstruction of justice- a lack of good faith grounds.
§ In addition to actus reus, gov must prove that a proceeding was indeed pending at the time of the endeavor.
§ Intend (purposely) to improperly interfere with the judicial proceeding.
§ NOTE: IN aguilar, court required that ? knew that actions would affect pending proceeding.
o A majority (following the 9th Circuit) concludes that there is overlap between two section. 9th Cir. Concluded that amendment of § 1512 in 1988 to cover non-coercive witness tampering did not repeal the application of the omnibus clause of § 1503 to witness tampering. A minority concludes that the two sections are mutually exclusive.
v A ? is not entitled to a downward motion if admits responsibility. But most courts allow it.
§ What features of this case, potentially, take it outside the guidelines heartland and make of it a special, or unusual, case?
§ Has the commission forbidden departures based on those features?
§ If not, has the commission encouraged departures based on those features?
§ If not, has the commission discouraged departures based on those features?
 This is what separates extortion from robbery.
 Just another reason why I’m drifting away from religion. I still believe in God though.
 E.g. ct. held that wire fraud not complete and ? did not obtain the funds until they were actually deposited into his account.
 E.g. saying water is available but only ½ inch. You are implying that your statement means that water for use is available.

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 § 666
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 § 666

§ 1
 § 5313
 § 6050
 § 5324
 § 6050
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 § 1957
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 § 371
 § 1962
 § 371
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 § 1001
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 § 1001
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 § 1001
 § 1001
 § 1623

§ 1621
 § 1512
 § 1503