You and the other members of your group are paralegals and research attorneys in a law firm. You are representing a corporation and its chief executive officer in a criminal case alleging repeated fraudulent business practices in the collection of debts, and the charge falls under the Racketeer Influenced and Corrupt Organizations Act (RICO). Your staff is to do the following.
Determine the possible criminal and civil liability if convictions are obtained against the corporation and/or against the chief executive officer.
Determine whether the evidence obtained through the criminal investigation and prosecution can subsequently be used in other civil or criminal cases against these defendants that might be alleged by other victims of these fraudulent debt collection practices.
Determine whether any plea admitting responsibility by the corporation or by the chief executive officer in this case could be used against the company or its officials in any future criminal or civil case concerning similar fraudulent debt collection practices of the company.
Let us understand first about the criminal code. The Criminal Code requires various elements to be proven before a person can be convicted of a crime. The commission of a prohibited act by the accused - for example, causing bodily harm, counselling a person to commit an offence, driving while impaired, or touching a person for a sexual purpose, must first be proven.
The Racketeer Influenced and Corrupt Organizations Act
As per wikipedia, The Racketeer Influenced and Corrupt Organizations Act (commonly referred to as RICO Act or RICO) is a United States federal law that provides for extended penalties for criminal acts performed as part of an ongoing criminal organization. RICO was enacted by section 901(a) of the Organized Crime Control Act of 1970 (Pub.L. 91-452, 84 Stat. 922, enacted 1970-10-15). RICO is codified as Chapter 96 of Title 18 of the United States Code, 18 U.S.C. § 1961-1968. It was intended to make it easier to prosecute organized crime figures, but has been applied in several other cases as well.
Criminal liability of corporations - Corporations are already subject to the Criminal Code and whether a corporation has the requisite mental state is far more complicated than for an individual.
? Company treated as having itself committed the wrong
? Crime: fault will be attributed by statute
? Tort: fault may be attributed by common law or statute
Corporations can only act through their employees and agents. For example, although we commonly consider that a bank makes a loan, in actuality it is the bank employees who gather information, check out security, authorize the loan and transfer money to the customer's account. The question becomes whether a bank making a loan to a borrower who uses the money for a criminal purpose like importing drugs, is committing a crime? The bank has made a loan that is used for a crime, so clearly it committed a prohibited act. But did the bank know of the criminal purpose and intend to finance it?
Basically, a corporation is guilty of a crime if its "directing mind" committed the prohibited act and had the necessary state of mind. To be a "directing mind", a person must have so much authority in the corporation that the person can be considered the "alter ego" or "soul" of the corporation (terms used in recent case law). Determining who is a directing mind depends on the facts of each case, but generally the person must have authority to set policy ...
This explains the criminal and civil liability for a corporation