Criminal law in the business context

Chapter 4: Criminal Law in the Business Context

4.1 Introduction to Criminal Law

Criminal law defined as a set of rules and regulations prohibiting certain conduct on pain of punishment.

A crime is an offence against the state.

It is the task of the police to apprehend those who commit crimes and prosecute them in a court of law.

There are four theories of punishment which explain the function of punishment. They are:

-          Retribution;

-          Deterrence;

-          Incapacitation; and

-          Rehabilitation.

4.2 Sources of Criminal Law

The main sources of criminal law in Malaysia is Penal Code.

-          It does not cover every criminal offences.

There are some relevant Acts under businesses, such as;

-          Anti-Money Laundering and Anti-Terrorism Financing Act 2001

-          The Computer Crimes Act 1997

-          The Companies Act 1965

-          The Financial Services Act 2013

-          The Islamic Financial Services Act 2013

4.3 Differences between Criminal Law and Civil Law

The Criminal Law and Civil Law are two broad and separate entities of law with separate sets of laws and punishments.

Comparison between Criminal Law and Civil Law

	Criminal Law	Civil Law
Definition	Criminal law is the body of law that deals with crime and the legal punishment of criminal offenses.	Civil law deals with the disputes between individuals, organizations, or between the two, in which compensation is awarded to the victim.
Purpose	To maintain the stability of the state and society by punishing offenders and deterring them and others from offending.	To deal with the disputes between individuals, organizations, or between the two, in which compensation is awarded to the victim.
Case filed by	Government	Private party
Decision	Defendant is convicted if guilty and acquitted if not guilty, the jury decide this.	Defendant can be found liable or not liable, the judge decides this.
Standard of proof	"Beyond a reasonable doubt"	"Preponderance of evidence." Claimant must produce evidence beyond the balance of probabilities.
Burden of proof	"Innocent until proven guilty": The prosecution must prove defendant guilty.	Claimant must give proof however, the burden may shift to the defendant in situations of Res Ipsa Loquitur (The thing speaks for itself).
Type of punishment	A guilty defendant is subject to Custodial (imprisonment) or Non-custodial punishment (fines or community service). In exceptional cases, the death penalty.	Compensation (usually financial) for injuries or damages, or an injunction in nuisance.
Examples	Theft, assault, robbery, trafficking in controlled substances, murder, etc.	Landlord/tenant disputes, divorce proceedings, child custody proceedings, property disputes, personal injury, etc.
Appeals	Only the defendant may appeal a court's verdict. The prosecution is not allowed to appeal.	Either party (claimant or defendant) can appeal a court's decision.
Jury opinion	In the criminal justice system, the jury must agree unanimously before a defendant is convicted.	In cases of civil law, the opinion of the jury may not have to be unanimous. Laws vary by state and country. Juries are present almost exclusively in criminal cases; virtually never involved in civil actions. Judges ensure law prevails over passion.
Commencement of proceedings	By way of pleadings, Representatives of the state, Prosecutor, Attorney General.	State/People/Prosecution by summons or indictment

4.4 Criminal Procedure

Criminal procedure is the adjudication process of the criminal law. While criminal procedure differs dramatically by jurisdiction, the process generally begins with a formal criminal charge and results in the conviction or acquittal of the accused. Criminal procedure can be either in form of inquisitorial or adversarial criminal procedure.

4.5 Elements of a Crime

Basic Elements

    Crimes (except for strict liability crimes) have two basic elements: the guilty mind and the guilty act. The technical terms for these elements are their Latin names: “mens rea” meaning “guilty mind” and “actus reus” meaning the “wrongful act or thing done.” Generally, a crime is committed when a person commits a guilty act accompanied by a guilty mind.

Specific Elements

    Crimes also have specific elements that are contained in the definitions of a crime. For example, a murder is an intentional killing of a human being. The elements are that the accused must have (1) purposely or knowingly (2) caused a death (3) of a human being. To obtain a conviction, the state must prove all of the elements of a crime beyond a reasonable doubt.

4.6 White-collar Crime

White-collar crime refers to financially motivated nonviolent crime committed by business and government professionals.

There are so many types of white collar crime in business;

• - Antitrust Violations: Price fixing, monopolies and other infractions of the Sherman Act and the Clayton Act.
• -  Bank Fraud: Fraud against a banking institution, including check fraud, commercial loan fraud, check kiting, and mortgage fraud.
• -  Bribery: Offering money or property with the intention of influencing the behaviour of others.
• -  Computer/Internet Fraud: Using the Internet or computers to defraud others.
• -  Credit Card Fraud: Using someone else's credit card to purchase goods illegally.
• -  Counterfeiting: Copying goods (such as designer merchandise) or money, and passing off the copies as genuine.
• -   Economic Espionage: Stealing or misusing trade secrets.
• -   Embezzlement: Using money or goods entrusted to you for your own benefit.
• -   Extortion: Taking money from someone through force, coercion or threats.
• -   Forgery: Manipulating or changing a written document for monetary gain.
• -   Insurance Fraud: Defrauding insurance companies by exaggerating or fabricating claims.
• -  Money Laundering: Running money obtained illegally through a legitimate business.
• -  Securities Fraud: Can include insider trading and theft through market manipulation.
• -  Tax Evasion: Filing inaccurate IRS returns, not reporting income on tax returns, not filing tax returns.