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I. COMMON LAW:
A. RULE: Corporations can be held criminally liable for the actions of its agents and officers. New York Central (S.Ct.)
1. FACTS: assistant traffic manager paid rebates to suger shippers and thier consignees in violation of Elkins Act.
2. FACTORS: (New York Central):
a. agents has requisite knowledge and intent;
b. corp intrusted authority for agent to act in subject matter;
c. agent's knowledge and purpose attributable to corp.
d. who commited (Heaton)
e. how many time comitted (Heaton)
f. acts ratified by higher authority (Heaton)
a. Majority of transactions conducted through corps;
b. giving corps immunity would take away means of
effectively controling corp conduct;
c. (H) otherwise incentive created for top management to
delegate and insulate corp liability.
d. structure of corp makes difficult to pinpoint individual
e. provides incentive for corp to watch employees more
f. stigma of corp guilty image = deterence
II. MODEL PENAL CODE (2.07):
A. NOTE: Only 8 states define corp liability as strictly as MPC 2.07. Many other states that follow the MPC extend MPC liability of corp to include those who supervise subordinate employees in managerial or non-managerial capasity. p.35
B. Photo Copy of p8,9 and 12 (MPC Section 2.07)
C. RULE: Corp can be held responsible for unauthorized acts of agents. Chapman Dodge (La.) [but not in chapman]
D. RULE: When a corp is accussed of crime requiring intent,
it must be determined who within the corp had the intent to commit
the crime. Chapman
1. FACTS: Retention of illegal funds by manager for corp, but not authorized nor knowen by corp officers.
2. ISSUE: Role of intent/proving corp intent when corp is defendant.
3. DECISION: Evidence insufficant to hold corp liable for unauthorized acts.
a. NOTE: explicit or tacit evidence of officers or board of director approval would be enough.
E. RULE: A corp's agent's intent can be transferred to corp even if person is not convicted. Heaton on Christy Pontiac
F. RULE: If the corp is to be criminally liable, it must be clear that the crime must not be a personal abberation of an employee acting on his own; the criminal activity must in some sense, reflect corp policy so that it is fair to say that the activity was the activity of the corp. Christy Pontiac (Minn.)
G. FACTS: Salesman/fleet manager forged new car purchusers name and backdated forms to get GM rebate for dealership. Car dealership = corp.
H. RULE ELEMENTS (of holding corp responsible for specific
intent crime) Christy Pontiac:
1. agent acting in the course and scope of employement;
2. authority of agent to act for corp with regard to subject matter;
3. agent was acting, at least in part, in furtherence of the corp's business interest;
4. criminal acts were authorized, tolorated, or ratified by corp managment.
a. NOTE: Corp can be liable for expressly forbidden activity. Prosecution could show those in managerial authority or positions of responsibility acted or failed to act in such a manner that the criminal activity reflects corp policy.
III. HYPOS ON PAGE 19
A. Corp criminally liable for vehicular homicide under MPC for mechanic's failure to install mirrors on bus?
1. Mechanic is not "high managerial agent" under MPC 2.07(1)(c); but if statutorily the offence imposes corp liability then agent need only acting within scope under MPC 2.07(1)(a) - unlikely in this case since offence of no mirrors is general/simple vehicular statute.
IV. RESPONDEAT SUPERIOR (case law developed/especially Fed)
A. NOTE: "By and large, the fed courts observe the respondeat superior rule of corp liability." p34
B. NOTE: More states recognize respondeat superior than strict MPC approach. 1. NOTE: 19 states extend the general respondeat superior rule to include acts of corp agents under any statute that imposes, or clearly/plainly indicates a legislative purpose to impose, criminal liability on corps.
C. GENERAL RULE: Allows imposition of corp liability for criminal acts performed by officers and agents in the course of thier employment, without regard to thier status in the corp hierarchy or if there was an absense of management complicity. 1. NOTE: Conflicts with MPC regime.
D. LIMITATION: Agent who commits the crime must be acting
within the scope of his or her authority and on behalf of the
1. DEF: "Scope of Authority"= agent must perform acts on behalf of the corp and that the acts must be directly related to the performance of the type of duties the employee has general authority to perform.
2. DEF: "acting on behalf of corp" = acting with the purpose of forwarding corp business (aka an intent to benefit corp).
E. RULE: Under Respondeat Superior a corp may incur liability for wrongful acts committed by an independant contractor, a subsidiary, or a division. pg 27
F. RULE: New corp. entity resulting from merger can be
criminally liable for pre-merger activities of former
corp/division. Central National Bank (5th Cir)
1. NOTE: Case focused on whether the state's merger statutue allows.
2. LOGIC: State Merger statute allows merged corp to exist for three years after merger for civil liability purposes, no reason not to apply to criminal/ prevents immunity through merging.
G. RULE: Corps can be held strictly liable for agents even
if they take resonable precautions to prevent violation. Dollar
Steamship (9th Cir).
1. FACTS: Despite company issuing orders, posting signs, locking chutes and lack of officer knowledge, company held strictly liable for employee dumping of garbage in harbor. Violation of strict liability anti-dumping law.
2. NOTE: Under Fed sentencing guidlines complience plans by corp can reduce penalties for agent's violation.
H. RULE: Corp liable under Sherman Act for agent's actions
committed in the scope of thier employment, even though contrary
to general corp policy and express instructions to agent. Hilton
Hotels (9th Cir)
1. FACTS: Despite telling thier purchusing agent twice not to threaten supplier with loss of Hilton business unless supplier paid an association fee used to attract coventions to the city, corp held liable under Sherman Act.
2. NOTE: Logic of decision centered on public purpose of Sherman Act; but book notes overwhelming authority that is that "good faith" efforts or due dilegence to prevent is not a defence for the corp. p33-34.
a. NOTE: Efforts by managment to prevent criminal
misconduct may affect prosecutor's decision to prosecute. p34
3. FACTOR: (Heaton) Clear that Hilton benefits from criminal activity despite repeated warnings to employee.
A. Some Statutes expressly make corps criminally liable:
1. e.g. Sherman Anti-Trust Act
INDIVIDUAL LIABILITY OF CORP EMPLOYEE FOR CORP CONDUCT
II. MPC 2.07:
A. NOTE: MPC codifies that corp officers and agents are personally accountable for crimes committed in the name of the corp. p44
III. FACTORS which make individual accountibility reasonable (Heaton):
1. Responsibility for act in question;
2. did act benefit corp;
3. knowledge of act;
4. repetiveness of the conduct;
5. severity of penelty under Fed guidlines.
IV. US v. Wise (S.Ct,)
A. RULE: Sherman Act imposes criminal sanctions for individually responsible officers/director/agent as well as the corp. even if agent was acting only for corp and not as an individual.
B. FACTS: Corp officer acting soley for corp and not as an individual, held criminally liable for violating the Sherman Act.
V. Burgeiois (Va.)
A. No oath requirement:
1. Statute does not contain an oath requirment, instead it punishes unsworn falsifications relating to any matter within jurisdiction of a fed dept or agency.
1. To prevent the use of fraud or trickery to subvert the governmental processes as conducted by gov agencies/departments. 2. Prosecution typically involves using false info to:
(1) obtain monetary benefit;
(2) obtain a priviledge from the gov;
(3) resist monetary claims by the gov;
(4) frustrate a lawful regulation.
A. Section 1001 punishes only the making of false statements. Misleading but true statements are not within the reach of this provision. Thus, the gov must prove the statement's falsity at the time it was made (p202).
VIII. 18 U.S.C. 1001 (Three Operative Clauses):
A. All Three Clauses Require:
1. Any matter within jurisdiction of gov dept or agency; a. RULE: "dept" under 1001 includes all three branches (exec, judic, cong). Bramblett
(1) NOTE: Possible to argue a legislatures statements to another legislator in course of formal congressional proceedings should come under Morgan judicial proceeding exception listed below. [Heaton]
b. RULE: Tax court (which is an executive and not a judicial agency) is covered under 1001 and Morgan exception does not apply. Stein (5th Cir)
c. RULE: In judicial setting, 1001 only applys to admin functions and not formal judicial proceedings. Morgan (DC Cir)
(1) FACTS: Def's lie about his identity as a lawyer is admin related and thus comes under 1001.
(2) EXAMPLE FROM HYPO: Def lying about his identity at bail hearing does not come under 1001 since = judicial proceeding.
(3) LIMITATION: Morgan line drawn in Stein as court refused to apply to tax court proceeding (tax court is an executive and not a judicial agency).
d. RULE: A statement that was never actually submitted to gov may satisfy requirment provided it was to be utilized in a matter which was within the juris of a dept or agency. Candella (2d Cir)
e. RULE: Statute covers keeping false business records that may later be audited or inspected by a federal official.
(1) EXAMPLES: plasma center bleeding records, narcotic perscription files.
f. EXAMPLE: Plane canopy maker shipped canopies to Navy without proper inspection by switching approval and serial stamps. Within gov juris since sub-K provided that canopies were subject to inspection by representaives from the Navy and def intended scheme to defraud Navy. Steiner (2d Cir)
(1) FACTORS: Target, K provision.
g. EXAMPLE: Def's statements to FBI about wife wanting to kill prez covered uner 1001. Rodgers (S. Ct.)
(1) FACTORS: Statutes use of "any" matter within juris of gov. Wouldnt deter crime reporting since falsity must be made knowingly and willfully.
2. must be committed knowingly and willfully;
a. RULE: No def knowledge/mental state of gov jurisdiction over matter is required. Yermian and Green
3. must be a material fact;
a. RULE: Legal not jury determination.
b. MATERIAL = Capability or ability to influence gov agency about decision to be made. Gov need not show loss, relience or capable of being affected. Need not show statement made to Gov. [Heaton]
(1) Can only be non-material if incapable of influencing an agency to do anything.
B. PLUS One of the Following Three operative clauses:
1. a trick, scheme or device that falsifies, conceals or covers up; OR
a. NOTE: No statement neccessary and dosen't matter if cover up of truth or falsity.
(1) EXAMPLE: Inspection stamp scheme used to conceal non- inspection enough to prove, need not show evidence that canopies were in fact defective. Steiner
2. makes false, ficticious or fraudulent statement or representation; OR
a. RULE: Gov must prove falsity at time statement was written/made.
3. makes or uses any false writing or doc.
a. RULE: Gov must prove falsity at time statement was written/made.
C. Alterntive Pleading:
1. Gov can argue any or all of the three operative componets of 1001, but cannot add penalties together if prove all three.
D. RULE: Most courts say an ommission can suffice under
1. Look at entire admission, if all answered but one = false statement by creating a false representation by implying no info was available.
2. EXAMPLE: Steiner canopy leaves blank box on form asking if any canopies have been previously rejected.
IX. COMMON DEFENCES:
A. Argue no requisite intent:
1. "I didnt know it was false when I said it";
2. "Someone else told me to write it that way";
3. "I didnt read it carefully before I signed it".
B. Argue that a Morgan exception should apply/ be extended
to the area covered by the facts.
1. NOTE: Morgan line drawn in Stein as court refused to apply to tax court proceeding (tax court is an executive and not a judicial agency).
X. EXCULPATORY NO'S DEFENCE/EXCEPTION TO 1001 LIABILITY:
A. ISSUE: Def argues that a simple "no" answer, when questioned by gov, is not a "statement" under 1001.
B. RULE: (Courts Split) An exculpatory no answer without
any affirmative, aggressive or overt misstatement on the part of
the def does not come within the scope of 1001. Paternostro (5th
1. LIMITATION: Seems to only apply when questioned by gov or anser to question is solisited.
2. FACTOR SOME COURTS IDENTIFY:
a. If def is sworn, allowing prosecution under 1001 would undermine perjury statute. Levin
b. Not statement since a no did not subvert the functioning of a gov agency. Davey
c. 5th amend concerns - would truthful answer incriminate. If yes then should not allow a no to fall under 1001 prosecution.
PERJURY AND FALSE DECLARATIONS
II. DIFFERENCES/SIMULARITIES BETWEEN PERJURY 18 USC 1621 AND FALSE DECS 1623:
A. Both apply to sworn falsifications made before Fed cts and grand juries.
B. Both have liability predicated on lying under oath although no particular form of oath is required and no proof need establish administration of oath by someone who had authority to do so. All the gov must do is prove that the falsehood was made after administration of an oath authorized by law. (p 233)
C. Perjury statute applies to a broader range of proceedings;
D. Perjury statute requires more rigorous proof of falsity;
E. Unlike perjury, false dec statute provides limited defence of recantation.
III. PERJURY 1621 (ELEMENTS/REQUIREMENTS):
A. False statement (written or oral/testimony, deposition);
1. NOTE: Gov therfore must identify which statement was false, unlike in 1623.
2. HYPO: Def thought he had no bank account, but he really did. When asked if he did he said yes in attempt to decieve. Perjury?
a. No, technically he made a truthful statement even though he intended to lie.
B. Regarding a material matter;
1. DEF: whether the statement has the capacity or tendency to influence the outcome of the proceeding.
a. RULE: Actual effect not required.
b. RULE: Materiality is matter of law.
2. RULE: Answer that is literally true but not responsive or possibly misleading to question asked, is not subject to fed perjury prosecution. Bronston (S.Ct.)
a. LOGIC: Def attorney's job to question further when def evades, don't want to discourage testifying by going after possible witness misunderstanding. Precident reflects desire to narrowly constue perjury statute.
3. RULE: Person who knowingly causes a false doc to be entered into evidence can be guilty of false dec under 18 USC 2 (aiding and abetting statute) Walser (11th Cir):
a. 2 does not create seperate crime rather it permits aider to be punished as principal.
b. Aider can be guilty even if intermediary had no criminal intent.
c. Section 2 applies generally to all Fed crimes.
d. LOGIC: Section 2 operates to unite intermediary innnocent third party's capacity to commit perjury with def's intent that perjury be committed.
C. made ("used" if doc) willfully;
1. EXAMPLE: Def asked if had Swiss bank account and said no because he forget. Not perjury since not willfully false.
2. DEFENCE TACTIC: Can destroy willfullness by saying/admitting a doc is false before turning over when doc is supeanad.
D. made with the knowledge of its falsity;
E. made under oath (lawfully authorized oath);
F. made before a competent authority.
1. Applies to fed court or grand jury, cong. committee, gov dept or agency, or notary pubic.
G. SEE 2 witness rule below!
IV. FALSE DECLARATION 1623 (ELEMENTS/REQUIRMENTS):
A. Same as for purjury; except
1. no 2 witness rule req
2. must be made before or ancillary to Fed court or grand jury.
a. EXAMPLE: Interview in lawyer's office under oath does not qualify as ancillary. Dunn (S.Ct.)
3. Gov need only show falsity/inconsistancy, not which statement is false to get 1623 coviction.
a. NOTE: Need to have both statements qualify under 2 for this rule to apply.
4. DEFENCE OF RECANTATION:
a. Apply section (d) - def must meet critera.
(1) NOTE: Courts split if "or" means "and". If "or" means "and" then def must show both not affect and not manifest. If "or" means "or" def need only show one critera as ruled in Moore case.
b. LIMITATION: A discovered lie/falsity acts as a bar to the use of the recantation defence.Moore (DC Cir).
V. TWO WITNESS RULE FOR PERJURY CONVICTION:
A. Evidentary rule that requires that the falsity of the
def's statements must be proved by:
1. the testomony of two witnesses; or
2. the testomony of one witness + corroberating evidence.
a. RULE: Corr. ev need only be circumstantial in nature, does not have to independently sufficiant.
b. RULE: Corr. ev is sufficiant if it, together with direct evidence, is inconsistant with the innocence of the def.
(1) EXAMPLE: Signed admissions of def enough to satisfy corrab. ev. Davis (9th Cir)
VI. IMUNIZED TESTIMONY & WHEN CAN STILL GET FOR PERJURY:
A. RULE: Gov can use non-false immunized statements to show perjury commiteed during immmunized testomony. Apfelbaum (S.Ct.)
B. NOTE: Court likely to not allow use of truthful, later
immunized testomony against previous lies in different
->[truth/immune] = not prosecute
C. NOTE: Probably can use truthful statements from second
proceeding against non-immunized lie in 3rd proceeding.
1. [lie/nonim]-->[truth/immu]--->[lie/nonim]= pros OK
D. NOTE: Probably cannot use truth in immunized statement
in second proceeding against past lie.
[truth/immune] = not pros a. *<
II. 18 USC 201:
1. preventing public officials from accepting anything of value in exchange for particular decisions or actions taken or to be taken by public officials in thier official capacity.
2. Bribary should not substitite the will of an interested person for the judgement of a public official as a controlling factor in the offical decision. Muntain
1. condemns the use of public office for private gain and punishes both the giving and the receipt of bribes and gratutities.
2. DEFENCE TACTIC NOTE: Bribary has harsher sentence than gratuity (15 vs 2 years impris). Often gratuity is a lesser included offence in bribery prosecutions. Can try to cut deal/argue gratuity applies.
C. ELEMENTS: (See statute)
1. pubic offical as defined by law
2. def did corruptly ask, demand, exact, solicit, seek, accept, recieve and agree to recieve money;
3. def represented or caused to be rep. that the thing of value was in return for influence in the performance of an official act.
D. Two distinct crimes:
a. corruptly attempting to influence a public official in the performance of official acts through the giving of valuable consideration; or
b. when a public official seeks something of value in return for being influenced in the performance of any official act.
c. appies to both offers and promises of bribes.
d. No need to prove actual bargin fullfilled, acceptance/offer of a bribe is a violation.
(1) RULE: Thus, members of congress that can only be prosecuted under a criminal statute if the gov dosent inquire how member spoke, debated, voted or did anything in the chamber/committee (because of Speech or Debate Clause) can be prosecuted by proving acceptance of the bribe. Brewster (S.Ct.) e. The payment and receipt of a bribe are not
interdependant offences, for obviously the donor's intent may differ from the donee's. Thus the 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. Anderson
f. INTENT REQUIRED: bribe be given or recieved corruptly.
a. rewarding a public official on account of or because of an official act, whether or not the payor acts with corrupt intent.
b. unlike bribary section, gratuity applies to both past and future official acts. Campbell (DC Cir).
c. payments to public officials for acts that would have been perofrmed anyway, whether before or after act has occurred, is probably a gratutity and not a bribe. Campbell
d. may be hard to distinguish illegal gratuities from innocent campaign contributions. Brewer
(1) RULE: Federal Campaign Act prohibits direct corp campaign contributions and authorizes criminal penalties for knowing and willful violations. (p330)
e. INTENT REQUIRED: No specific intent required only requires value given "otherwise than as provided by law for the proper discharge of an official duty".
f. RULE: Economic coersion is not defence. Barash
III. "Official Act":
A. RULE: The determinative factor is whether def's actions involve a matter or issue that could properly, by law, be brought before him in his official capasity. Muntain (DC Cir)
B. RULE: Not neccesary that the public official actually have the power to perform the act that he promises in return for the money. What is neccessary is that the public offical solicit or recieve the money on the representation that the money is for the purpose of influencing his performance of an official act. Arroyo (7th Cir)
IV. "THING OF VALUE":
A. RULE: In order to put the underlying policy of the statute into effect, the term "thing of value" must be broadly construed. Gorman
B. RULE: Statute focuses on the value that the def subjectively attached to the items given/recieved, (whether or not the def correctly assessed the worth of the bribe). Williams
V. "PUBLIC OFFICIAL":
A. To be a public official under 201(a), an individual must
possess some degree of official responsibility for carrying out a
federal program or policy. Dixson (S.Ct.)
1. LIMITATION: Thus, the mere presense of fed program does not automatically bring within 201, nor neceessarily all employees.
2. FACTS: Private non-profit agency officer that contractually was acting on behalf of US gov in admin of fed grant program = public official under 201.
3. FACTORS: Position of public trust, determined who would get fed dollars, K, def salary paid by gov grant, defs personal responsibilities.
4. FACTS: Abscam senator recieved worthless stocks in return for influence. Fact that stock was worthless not relevent given senator's expected/percieved long term value of stocks.
VI. FOREIGN CORRUPT PRACTICES ACT (p350-351)
A. Act prohibits corruptly making payments to foriegn officials to influence an official act or deicision or to influence a foreign gov or its instrumentality to affect an official act or decision.
B. RULE: Grease payments are excluded from the Act.
C. RULE: Cannot charge foreign officials with conspiricy to violate FCPA. Blondek (5th Cir)
D. TWO DEFENCES TO FCPA:
1. good faith payment of reasonable and bona fide promotional and performance expenses.
2. payment is lawful under the written laws and regulations of the foriegn country.
A. to address infultration of legitamate business by organized crime.
A. RULE: Activity is only brought into RICO jurisdiction is
it affects interstate or foreign commerce.
1. NOTE: juris req can be satisfied by presence of minimal contact with interstate commererce.
2. RULE: prosecution need only show that the enterpise itself has some involvement with commerce, not the that the activity actually affects interstate commererce. (p363)
B. RULE: Construe broadly to effect congressional intent.
C. RULE: RICO not limited to organized crime. Northwestern
1. LOGIC: Such interp is at odds with cong intent.
D. NOTE: Provision for civil action with treble damages.
A. Listed on Heaton Handout
1. RULE: The statute does not exclude identification of a governmental office as a RICO enterprise. Thompson (6th Cir)
a. LOGIC: "group of individuals associated in fact although not a legal entity" which made use of the Office of Tenn. govoner.
2. RULE: An association of corporations or an association of individuals and corporations may constitute a RICO enterprise. Huber
3. RULE: In most circuits, definition does not specifically require economic motivations for establishing a RICO enterprise. However, some circuits require a showing of financial purpose before association will be deemed a RICO enterprise. (p358)
4. NOTE: Courts divided if "structure" is a required element to = an enterprise. (Heaton)
a. Those that dont require an asertainable structure, will apply RICO to situations where the enterprise was no more than the sum of the predicate racketeering acts. United Energy Owners
5. RULE: Def's position within the enterprise need not take a particular form. [Heaton]
6. RULE: Sole proprietership can = an enterpise, but the sole prop must be seperate from the individual. This can occur if:
(1) incorperated (due to statutes def)(aka a "formal seperation" of indiv & entrerprise)
(2) if it has other employees (because then "it is a group associated in fact")(aka a "practical" seperation of individual from enterprise)
B. SECTION A (no seperate requirement):
1. RULE: Allows corps to serve both as the RICO person and the RICO enterprise. Scholfield
C. SECTION C (seperate/dinstinct requirement):
1. RULE: Requires a relationship of employement or association between the person and the enterprise, thus this requires the person who engages in the pattern of rack be an entity seperate/deistinct from the enterpise. Scholfield
2. RULE: Section does not extent liability to the enterprise itself Scholfield
a. LOGIC: Can get enterprise under section A, congress intent.
b. NOTE: Cannot use respondeat superior to hold corp liable in section C prosecution since section C directly denies holding the enterprise liable.
3. RULE: Non-economic activities are within RICO if activity affects commerce. NOW
VI. PATTERN OF RACKETEERING ACTIVITY:
A. Term includes more than 3 dozen listed crimes.
B. DURATION REQUIRMENT:
1. Statute says at least 2 acts within 10 years.
2. RULE: In determining the duration of a scheme involving mail fraud, the relevent criminal conduct is the def's deceptive or fraudulent activity, rather than otherwise innocent mailings that may continue for a long period of time. Kehr Packages (3rd Cir)
C. RULE: prosecuter must show that racketeering predicates
are related and that they ammount to or pose a threat of continued
criminal activity. Northwestern Bell (Sct)
1. Need coninuity, threat of continuity + relationship: a. Relationship:
(1) is acts form a pattern by embracing the same results, purposes, participents, victims, or methods.
(2) HEATON FACTORS:
(a) number of acts
(c) type of acts
(d) hurt on some way
(e) relevence of seperate schemes
(1) Satisfied by a showing of a series of related acts extending over a substantial period of time.
(a) NOTE: SCT said given congress intent & RICO, acts extending over a few weeks or months may not be enough.
(b) FACTS (NW Bell): Bribes extending repeatedly over 6 months enough.
c. Threat of Continued Activity:
(1) Depends on specific facts.
(2) threat can be explicit or implicit.
(3) May be established if predicate acts or offecnces are part of an ongoing entity's way of doing business.
VII. DINGUISHING ENTERPRISES FROM RACKETEERING ACTIVITY:
A. Rule: Under RICO, an enterprise must be "an entity
seperate and apart from the pattern of racketeering activity in
which it engages."
1. RULE: Proof of the two elements may "coalese" even though proof of one neccessarily does not establish the other. Turkette (SCt)
VIII. PROHIBITED CONDUCT:
A. RULE: Activity need not advance the interests of the enterprise. [Heaton]
IX. REQUISITE RELATIONSHIP TEST:
A. NOTE: Courts disagree over which is the correct test.
B. TEST #1: (2 parts/either will satisify):
1. whether def was able to engage solely by position or control in enterprise; or
2. whether racketeering act is related to enterprises affairs.
C. TEST #2: (All 3 parts required):
1. def must have committed acts;
2. def's position in the enterprise facilitated committion; 3. acts must have some indirect or direct affect on enterprise.
a. NOTE: Does not require enterprise profit, only that enterprise was affected.
X. STATE PREDICATE CRIMES: TAX
II. FOUR TYPES OF CASES:
A. 7201 (Tax Evasions) (5yr)(Commonly brought when false
1. must prove additional tax was due and owing;
a. can prove by direct (eg specific expence not reported) or indirect proof.
b. RULE: gov need not prove exact amount of tax evaded. Rischard
2. def committed affirmative act to evade;
B. 7206(1) (Subscribing to False Return)(3yr)
1. filed or caused to be filed written declaration signed under the penalty of perjury;
2. def who made or signed doc;
3. def knew doc was false regarding some material matter;
4. willfullness (def acted willfully).
5. NOTE: do not have to prove additional tax in owing.
C. 7206(2) (Aid/Abeit)(3yr)
1. def aided, assited, counceled, advised i nthe preperation of the doc;
2. falsity as to a material matter;
4. NOTE: dont have to have perosn who signed doc.
5. NOTE: dosen't have to be formal return (eg can be w-4's)
D. 7203 (1yr Misdemenor actions)
1. failure to file return;
(1) law requiring filing;
(2) failure to file at time required;
(3) failure was willful.
2. failure to pay tax;
3. failure to maintain records;
4. failure to supply required info.
III. STAGES OF INVESTIGATION:
A. Investigators into tax matters can be either grand jury
or administrative (eg IRS).
1. IRS has supeana power
2. investigators refer to IRS office of prosecution (tax division)
a. NOTE: Can intervene for client at this stage and say why pros would not win (eg willfullness), youll fight at trial and that your client would repay if charges dropped.
(1) IF DEAL: IRS requires def at minimum to plead guilty to highest count for plea deal, no exceptions.
3. IRS pros office refers to local area prosecutors
a. NOTE: Less flexible to make deal since IRS must approve all pleas and IRS dosent allow local prosecutors to use mail fraud, and tax crimes cannot be charged under RICO (not listed as a predicate act).
A. RULE: Defined generally as a voulentary, intentional violation of a knowen legal duty. Pomponio
B. RULE: A consistant pattern of understating income may be used to establish willfullness. Rischard
C. RULE: Judge can properly consider the general
educational background and experience of def as bearing on def's ability to form requisite intent. Rischard
1. NOTE: In this case court rejected based on facts, that def amended returns (because he amended after gov found out) and lack of experience.
D. RULE: Honest relience on expert advise, conditional on the def giving the expert all the facts, is a factor to consider in the willfullness requirement. Burnstein
E. RULE: Objectively reasonable mistakes negate the
neccessary mentle state for tax offences. Buckner (7th Cir).
1. LIMITATION: Believing an incorrect proposition of law is a reasonable mistake only if there is a boba fide dispute about it. Buckner (7th Cir)
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