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  • Understanding White Collar Crime

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  • Carolina Academic Press Understanding Series

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    Understanding White Collar Crime, Fourth EditionJ. Kelly Strader

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  • Understanding White Collar Crime

    fourth edition

    J. Kelly StraderProfessor of Law

    Southwestern Law School

    Carolina Academic PressDurham, North Carolina

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  • Copyright 2017J. Kelly StraderAll Rights Reserved

    Library of Congress Cataloging-in-Publication Data

    Names: Strader, J. Kelly, author.Title: Understanding white collar crime / J. Kelly Strader.Description: Fourth edition. | Durham, North Carolina : Carolina AcademicPress, LLC, 2017. | Series: Understanding series | Includesbibliographical references and index.

    Identifiers: LCCN 2016052050 | ISBN 9781522105121 (alk. paper)Subjects: LCSH: White collar crimes--United States.Classification: LCC KF9350 .S77 2017 | DDC 345.73/0268--dc23LC record available at https://lccn.loc.gov/2016052050

    e-ISBN 978-1-52210-513-8

    Carolina Academic Press, LLC700 Kent StreetDurham, North Carolina 27701Telephone (919) 489-7486Fax (919) 493-5668www.cap-press.com

    Printed in the United States of America

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  • For Hal

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  • Contents

    Preface xxviiAcknowledgments xxix

    Chapter 1 Introduction to White Collar Crime 3 1.01 The Definition of White Collar Crime 3 1.02 Recurring Issues in White Collar Investigations and Prosecutions 5[A] The Harm Caused by White Collar Crime 5[B] Difficulties in Enforcing White Collar Statutes 6

    1.03 Issues of Federalism in White Collar Prosecutions 7[A] Federal and State Overlap 7[B] Federal Jurisdiction 8[C] The Debate Concerning the Federalization of Crimes 8

    1.04 Parallel Civil and Administrative Proceedings 9 1.05 Issues of Prosecutorial Discretion in White Collar Crime 10 1.06 White Collar Crime and the General Criminal Law 12[A] Mens Rea 12[1] Purpose, Knowledge, and Willful Blindness 13[2] Willfulness 14[3] Recklessness and Negligence 15[4] Strict Liability 15

    [B] Statutory Construction 15[C] Vicarious Liability 16[D] Inchoate Crimes 16

    1.07 Application of Criminal Procedure Principles to White Collar Crime 17

    Chapter 2 Corporate and Individual Liability 19 2.01 Introduction 19 2.02 The Development of Corporate Criminal Liability 20 2.03 Standards for Imputing Liability to Corporations 21[A] Respondeat Superior 21[1] Application in the Federal System 21[2] Elements of Respondeat Superior 21[3] Agents Whose Liability May Be Imputed to the Corporation 22[4] Liability of Successor and Non- Existent Corporations 22

    [B] Model Penal Code 23[C] Comparing Respondeat Superior and 2.07 23

    ix

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  • [D] The Debate over Corporate Criminal Liability 24[E] DOJ Guidelines 24

    2.04 Issues Arising under the Model Penal Code 25[A] Legislative Intent to Impose Liability 25[B] Approval by High Managerial Agent 26

    2.05 Acting on Behalf of the Corporation 27[A] Model Penal Code vs. Respondeat Superior 27[B] Corporate Compliance Programs and Actions Contrary to Corporate Policy 28

    2.06 Acting to Benefit the Corporation 30 2.07 Corporate Mens Rea 31[A] Managerial Approval of Criminal Conduct 31[B] Collective Knowledge 32

    2.08 Liability of Corporate Officers and Agents 33[A] Scope of Individual Wrongdoers Liability 33[B] Strict Liability of Management for Subordinates Acts 35

    Chapter 3 Conspiracy 39 3.01 Introduction 39[A] Nature of Conspiracy Charges 39[B] Policy Bases 40

    3.02 The Federal Conspiracy Statutes 40[A] Types of Federal Conspiracy Statutes 40[B] The Elements of the General Conspiracy Statute 371 41[C] The Overt Act 42[D] The Unlawful Object 43

    3.03 The Advantage of a Conspiracy Charge 44[A] Joinder 44[B] Venue 44[C] Evidence 44[D] Vicarious Liability The Pinkerton Rule 45[E] Multiple Punishments 45[F] Statute of Limitations 45

    3.04 The Agreement 46[A] Government Agents as Co- Conspirators 47[B] Plurality in the Corporate Context 47[C] Whartons Rule 48

    3.05 The Offense Clause and the Defraud Clause 49[A] The Offense Clause 49[B] The Defraud Clause 50[1] Breadth of the Defraud Clause 50[2] The Federal Government as Victim 50

    [C] Relationship between the Offense Clause and the Defraud Clause 51

    x CONTENTS

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  • 3.06 Required Mental State 53[A] Specific Intent 53[B] Knowledge vs. Specific Intent 54[C] Conscious Avoidance 56[D] Mens Rea and Federal Jurisdiction 57

    3.07 Proof of Guilt in a Conspiracy Case 57[A] Level of Required Proof 57[B] Co- Conspirators Exception to the Hearsay Rule 58

    3.08 The Breadth of the Agreement 59[A] Overview 59[B] Advantages of a Single Trial 60[C] Single Conspiracy vs. Multiple Conspiracies 60[1] Joinder Issues 60[2] The Showing of Prejudice 63[3] Double Jeopardy Issues 64

    3.09 Duration and Withdrawal 64[A] Duration of a Conspiracy 64[B] Withdrawal from a Conspiracy 65

    3.10 Vicarious Liability The Pinkerton Doctrine 66[A] The Pinkerton Decision 66[B] The Policy Debate 67[C] Application to White Collar Crimes 67

    3.11 Inconsistent Verdicts 68 3.12 Duration 69 3.13 Withdrawal 70

    Chapter 4 Mail Fraud, Wire Fraud, and Related Offenses 73 4.01 Breadth of the Mail and Wire Fraud Statutes 73[A] The Statutes Appeal to Prosecutors 73[B] Courts Interpretations of the Statutes 75

    4.02 Statutory Overview 75[A] Sections 1341 and 1343 75[B] The Elements 76[C] The Inchoate Nature of Mail and Wire Fraud 76[D] Federal Jurisdiction 76[1] Jurisdictional Bases 76[2] Federalism Issues 78

    4.03 The Scheme to Defraud 79[A] Intent to Defraud 79[1] The Durland Decision 79[2] Deception Relating to the Economic Bargain 79[3] Literally True and Misleading Statements 80[4] Omissions and Concealment 81[5] Good Faith and Reliance on C