05/27/10 SVC J.C.

http://www.weblocator.com/attorney/fl/law/whitcolcrim.html#20

Guide to
Florida Law

Florida White Collar Criminal Defense

White Collar Criminal Defense

Reviewed and edited by Leading Florida Attorney E. C. Deeno Kitchen at the law firm of Kitchen Judkins
Simpson & High

Business owners need to be increasingly aware of how they might run afoul of criminal laws in the operation
of their businesses. Newspapers today are so full of reports of corporate criminal investigations and
prosecutions that most business owners do not even realize that business entities were once thought to be
incapable of committing crimes. Under the common law, corporations were considered artificial constructs
without minds of their own, incapable of forming the intent necessary to be guilty of crimes. All this has
changed. During the last two decades, the federal and state governments have increased the number of
criminal investigations of businesses and the people who run them. High-profile prosecutions of large
corporations have caught the attention of the press and the public.
Today, business owners and corporate executives should have a basic understanding of how criminal laws can
impact their businesses. This chapter is designed to acquaint the reader with criminal statutes that most affect
businesses and the steps businesses can take to avoid criminal liability. It outlines the fundamentals of
corporate criminal law, such as the elements of a crime and some of the different types of corporate felonies
and white collar crime.

Criminal Liability of a Corporation

As mentioned earlier, corporations were once thought to be incapable of forming the intent necessary to
commit crimes. This attitude now has been erased and corporations have even been found guilty of crimes
requiring specific intent. A corporation may be prosecuted for any crime other than a crime that is only
committed by a natural person, such as bigamy or rape. The law recognizes that corporations may be reckless
and may commit crimes requiring specific intent. For a corporation to be responsible, the action usually must
be committed by an agent[,] a director, employee or officer authorized to act on behalf of the corporation
acting in the scope of employment. The corporation may also be held responsible for its part in a conspiracy.

Criminal Liability of a Corporate Officer or Agent

In addition to the corporation's liability, corporate officers and agents may be found personally liable for their
criminal conduct. Some businesspersons mistakenly believe that criminal liability is an "either/or"
proposition. That is, they believe that if their actions subject the business to criminal liability, they will be free
of personal liability. This belief is incorrect, however, because many criminal statutes allow prosecutors to
prosecute both the business and the individuals who run it. Individual and corporate liability are cumulative,
not exclusive.
Participation in business criminal activity does not, by itself, make a person criminally liable. Usually the
prosecution must show that the participating officer or agent consciously promoted or at least knew about the
illicit act. Ordering a subordinate to commit a crime or silently acquiescing to another's commission of a
crime will make most officers or agents personally liable for the crime. Some officers within a corporation
have even been held responsible for criminal activity of which they were unaware because they had an
obligation to ensure compliance with the law or to detect and prevent violations of criminal regulations. The
law does not look kindly on corporate officers who claim to have been asleep at the helm while their
subordinates were engaging in criminal activity. Especially in the context of environmental regulations, with
their substantial penalties, the defenses, "I did not know" and "I was not aware" are insufficient if the court or
jury believes the officer should have known or had an obligation to be aware of what was happening in the
company.

Classification of Crimes

Under Florida's criminal law, crimes are divided into two major classifications: felony and misdemeanor. A
felony is generally defined as any crime punishable by death or more than one year in prison. A misdemeanor
is any crime punishable by imprisonment for less than one year. Felonies and misdemeanors are further
divided into different degrees, dictating the maximum level of punishment. In addition, punishments vary
depending on whether a natural person or a corporation commits the crime.

White Collar Crime

White collar crime is the most common type of business crime. White collar crime is generally used to
describe crimes that have cheating or dishonesty as their common basis. These crimes typically are committed
by professionals or entrepreneurs under cover of legitimate business activity. Such crimes may be difficult to
prosecute because of their complexity. Often, they carry lesser penalties because they are not associated with
violence. However, defendants convicted of white collar crimes may incur enormous fines, be ordered to pay
restitution, lose professional or business licenses or spend time in jail.
As a practical matter, it is impossible to describe every activity that fits within the definition of white collar
crime, because white collar crime takes many forms. Some criminal actions are prohibited by specific laws
narrowly drawn to outlaw a particular activity. Other actions are not covered by specific laws but instead are
prosecuted under one or more catch-all laws that criminalize dishonest behavior.

Conspiracy

Conspiracy is the term for a broad category of crimes involving multiple actors coming together to engage in
concerted criminal activity. A person or business generally is guilty of conspiracy to commit a crime if that
person or business does one of the following:
*With the purpose of facilitating or promoting its commission, agrees with another person or business to
engage in conduct that constitutes a crime or an attempt or solicitation of a crime
*Agrees to aid another person or business in planning, committing or attempting to solicit a crime
The agreement forming the basis for conspiracy need not be written, oral or even explicit, but often is inferred
from the facts of the specific case. If the parties meet and reach an understanding to work for a common
purpose, there is an agreement. For example, if the producers of a particular product meet to exchange
information on prices and later they set identical prices, a prosecutor may be able to prove they conspired to
set prices even though there was never an explicit agreement to do so. Most criminal conspiracy statutes also
require that at least one of the parties has committed an overt act in furtherance of the conspiracy.
A procedural issue of great importance to parties accused of conspiracy is whether government prosecutors
try to frame the conspiracy as a hub-and-spoke conspiracy or as a chain conspiracy. In a hub-and-spoke
conspiracy, many parties (the spokes) conspire with one person (the hub) but not with other defendants. In
contrast to a hub-and-spoke conspiracy, a chain conspiracy involves several parties as links in one long
criminal chain. Defendants in chain conspiracies are responsible for the actions of all participants in the chain,
even if they never met some of the other participants in the chain.
Specific federal anticonspiracy statutes are found throughout the United States Code. Florida statutes also
contain anticonspiracy laws. In recent years, a growing number of white collar criminal prosecutions have
included allegations of conspiracy.

Fraud

Fraud is intentionally lying in order to induce someone into relying on the lie to part with something of value.
Like embezzlement, fraud can be either complex or simple. The federal government has three general
antifraud statutes for mail fraud, bank fraud and wire fraud.
Mail fraud is a broad crime with two elements: 1) a scheme, devised and intended to obtain property or
money by fraudulent means, and 2) using the mail in furtherance of that fraudulent scheme. The "scheme to
defraud" element of mail fraud is deliberately broad. It encompasses a wide variety of criminal activity,
including credit card fraud, securities fraud, medical drug fraud and fraud based on political malfeasance.
Because the mail fraud statute uses such broad language and because it is relatively easy to prove, mail fraud
is one of the most common charges brought by federal prosecutors. Charges of mail fraud frequently are made
even in cases in which more specific crimes have been charged.

Avoiding White Collar Criminal Liability

It is challenging for a company to ensure that none of its employees will violate the law in any way. Some
laws are so complex that even knowing one's legal responsibilities can be difficult. However, there are ways
in which business owners and executives can avoid white collar criminal liability.
Businesses should establish internal procedures including training, documentation and thorough accounting
and auditing to prevent wrongdoing by employees. They should ensure that mechanisms are in place for
officers and managers to become aware of problems at an early stage. An attorney experienced in the
regulatory area can be an excellent source of information for helping managers understand their
responsibilities for overseeing corporate employees' actions and reporting accidents or wrongdoings.
Internal investigations are an integral part of the defense in many corporate criminal proceedings. When a
company learns that it may be the subject of a criminal prosecution, it is important to notify management
quickly and to act to resolve the situation. Sometimes a business can avoid criminal liability altogether if it
shows that it took proper action to correct a situation as soon as managers were made aware of the problem.
The internal investigation carries risks of its own, however. It may be wisest to have the investigation
conducted by outside legal counsel. Attorney-client privilege and the work product doctrine may prevent the
corporation's officers from being required to reveal the contents of a final report to prosecutors or from being
used at trial as evidence against the company.
No business should ever obstruct a government investigation into its affairs; such action could be perceived as
a coverup or obstruction of justice. If secrecy is necessary, being honest with all employees and fully
explaining their responsibilities can be excellent preventive medicine against criminal liability. Any employee
asked to keep anything secret for reasons he or she does not understand may assume his or her employer is
involved in illegal activity and testify later to that effect.