The world of business like any other area of our society has laws in place to protect transactions between people and companies, while attempting to maintain a degree of economic prosperity for both parties. Business law can be very complex with the different types of crime classifications such as white-collar crimes, administrative crimes, and damage suits which have become the most popular type of suit. Similar to other areas of criminal law there are certain criteria that have to be met before a criminal case can be established against the defendant such as act and intent. Without sufficient evidence of a crime beyond a reasonable doubt, it is almost impossible to confirm the defendant’s actions in the crime. Unfortunately, criminal actions within business have become a common place, making it increasingly more difficult to catch and convict every offender.
Crime, just the word almost instills an immediate response from people for justice or revenge for being wronged. Most of the crimes that involve physical harm to a person like murder or assault are easy to identify a victim and once caught the perpetrator is the face of the resentment and need for justice through a long prison term. A crime without physical harm often seems to take a back seat as you do not have graphic photos of physical damage or permanent scars and dramatic evidence like a gun or knife. However, these types of crimes are often more costly and have far more victims than a crime with physical harm. The types of cases without the dramatic evidence and one sole victim with obvious injury is often harder to prove and more difficult to convict.
All crime within business is not classified the same, there are classifications that have distinct differences. The first type of crime that is thought of when business is involved are white-collar crimes. These types of crimes differ form traditional crime in that they do not use violence, “illegal acts of omission or commission of an individual or a group of individuals in a legitimate formal organization” (Cliff, 2017). One of the most famous white-collar crime cases involved Charles Ponzi who was famous for developing the Ponzi Scheme which involved, “using new investments to pay existing investors and finance a highflying lifestyle is alive and well” (Frankel, 2012). The reason why this type of crime is so devastating is that it uses deceitful means in order to swindle investors out of money based on false promises. Unlike many other types of criminal cases white-collar crimes can take large amounts of time and man power to prove, which makes it hard for courts to gather all of the necessary evidence to convict. According (Cliff, 2017) “The 2015 Identity Fraud Study, released by Javelin Strategy & Research, found that $16 billion was stolen from 12.7 million U.S. consumers in 2014, compared with $18 billion and 13.1 million victims a year earlier”. As you can tell by this information white collar crime has been on the rise at an alarming rate.
Since the early 2000’s white-collar crime has seen a significant increase due to the low likelihood of being caught. Not only this but many large corporations have been caught conducting illegal activates and have received minor sentences or simply just had to pay fines which they can easily afford. The stigma around business crime is that since nobody is being physically harmed then a strict sentence should not be imposed. These types of crimes should be held to the same standards as more physical crimes because otherwise they become more appealing to criminal minded people and organizations. “Treating a white collar crime less severely than a street crime would be unjust only if the white collar crime in question was no less blameworthy than the corresponding street crime” (P.S.K&B.M, 2012). Since the business world is becoming more technologically advanced there is more room for unethical business practices to be conducted, but white-collar crimes should always carry just sentences because they can cause large amounts of people great hardship.
Another type of crime that is fairly common is administrative crime these violations deal with rules put in place by administrative agencies such as the Environmental Protection Agency(EPA), Food and Drug Administration(FDA), and Occupational Safety and Health Administration(OSHA). These administrations are able to put in place these regulations through the power of the “The Necessary and Proper Clause assigns Congress the power to make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution (F.J, 2012). What this clause essentially does is giving congress the power to pass vital laws that pertain to the constitution, allowing for congress to establish and govern administrative agencies that enforce law. In addition, these agencies that are mentioned are designed to protect the public’s environment, food and drug sources and their safety in the workplace as well as the general environment where other people may be working.
Administrative crimes have their own courts which deal with these special circumstances, these administrative courts differ from criminal or civil courts in that the judge decides the outcome based on the facts. The judges are specially trained to deal with administrative law and hold many of the same requirement you find in regular trial court judges. However, they are limited in that they can only preside over administrative cases based on their knowledge of the federal regulations and interpretation of those regulations into everyday business.
Finally, there is damage suits which are fairly common in business because they deal with conflicts that arise between either two businesses or deal with consumers that are effected by mishaps due to faulty products. Most of the times these types of court hearings deal with people seeking monetary rewards to fix the damage caused by the negligent conduct. A popular form of suit that has gained traction over over the past forty years is the RICO law, this suit was meant to target organized crime through lawsuits. However, this law has not traditionally been used for its original purpose “75 percent of all RICO suits involve securities frauds and other types of business fraud. Less than 10 percent involve criminal activity generally associated with organized crime” (Morgan, p.143). During RICO trials the people who are impacted will benefit from both criminal and civil rewards, this means that the person on trial will have to pay a fine for the damages while also serving jail time. The fines will include enough money to pay for the cost of going to court and any hardships that may have been caused as a result of the initial offence. Although damage suits can come with criminal convictions, most of the time monetary rewards are what is being sought after.
Knowing the different types of criminal laws is not enough, having adequate knowledge of what constitutes a crime is keen in court cases. As a general rule two things must be established in order to convict someone of a crime, they are acts which involves the steps taken towards committing the crime and the second is intent which is having the knowledge of the illegal activity. Intent is often the harder of the two things to prove during a trail because nobody knows whether or not the defendant actually intended to cause harm, this is why evidence and motive play big parts in court cases. These terms are often synonymous with one another meaning that it is hard to prove one without first establishing the other.
When a court is deciding on whether or not the defendant displayed a clear intent and act during the crime, these are not the only factors taken into consideration. The jury must also decide on if the defendant had the mental capacity to fully understand the extent of the damages that they are committing. In the world of business capacity to commit crimes does not often play a role in the court process. This factor is usually for children who commit crimes, the age of the child helps the court determine whether there was clear intent to commit the crime in question. Additionally, the process of capacity to commit a crime is often closely scrutinized in the mentally handicapped as well and often determined by a court appointed psychiatrist after interviewing the defendant.
Establishing intent within a criminal case can be difficult in some instances, this is no different when a corporation is on trial. Previous ruling in the court of law allowed corporate entities to separate themselves from the actions of their employees. However current courts do not see employees as separate from the corporation, these organizations have a corporate responsibility for their workers. They hold businesses responsible for the actions of their employees because the employee is representing the company. Allowing businesses to pick and choose when they take responsibility for employee’s actions is not seen as solid business practices. An instance where a business could fight that they are not responsible for their employee’s actions would be in the case of the employee is acting outside the scope of their employment. If this was the case it would be much easier for a corporation to separate its intentions from the rouge employees. This type of behavior is often scrutinized in the process of sales either in person or over the phone where employees are trained on paper to do one thing but company practices push sales quotas and a close the sale at any cost mentality. Corporations like to stand behind the fact that the employee was trained correctly on paper and they were acting outside the scope of their job when they promised things that the plan could not deliver like returns on investment that sound to good to be true. The corporations like to take all of the money from these sales and build a wall of deniability between the employee and the corporation and view the employee as expendable when an issue arises and they can terminate them for not following company policy.
Corporations as a whole within the United states are considered a legal person, meaning that the corporation itself is not immune to prosecution (J&W,2012). These types of prosecutions are not typically criminal in the instance that people are going to jail, depending on the offence the corporation is typically fined for their wrongdoing in a civil case. This is not the case in all offences though, if the crime is serious enough then a more in-depth investigation will be conducted sending anyone who was connected to the crime to jail. Not only this but corporations can have any federal contracts or corporate charters revoked. This is because the corporation was found to be liable for the actions of a few within the company. Corporate liability has certainly changed in the aspect of how responsible corporations are for the actions of a few employees, this is because when damage is done to consumer’s people are always looking for someone to blame.
In review of these various types of crimes that can be committed by organizations it is very easy to see that opportunities for profits with lower risk and potential lighter sentences makes these attractive crimes. While certain types of these crimes have far reaching effects and potentially millions of victims it is not seen this way by most of the agencies and the criminal system. If you defraud one person with identity theft or if you defraud one hundred people with identity theft often the sentences are not drastically different. The opportunities within our current legal system to correct and establish a new precedent for these so called cyber crimes is here and now. The judicial system needs to take a hard line stance on these types of crimes that are taking place and hold corporations and individuals within the corporations accountable for their actions. Potentially stabling set sentence criteria for crimes like identity theft or Administrative law cases where a corporation is not being up front with clients to boost sales would be a help. If you were to get a one-year sentence for each count it would bring some more consequence to someone who is trying to make as much money as possible with a scheme before they are caught. In the end holding people and corporations responsible for their actions with punishments that are substantial is the only way to decrease this growing criminal enterprise where often times victims are not even aware they were victims until it is to late.