Business Organizations Law Commons^™

Coordinating Compliance Incentives, Veronica Root

Faculty Scholarship

In today’s regulatory environment, a corporation engaged in wrongdoing can be sure of one thing: regulators will point to an ineffective compliance program as a key cause of institutional misconduct. The explosion in the importance of compliance is unsurprising given the emphasis that governmental actors — from the Department of Justice, to the Securities and Exchange Commission, to even the Commerce Department — place on the need for institutions to adopt “effective compliance programs.” The governmental actors that demand effective compliance programs, however, have narrow scopes of authority. DOJ Fraud handles violations of the Foreign Corrupt Practices Act, while the …

The Question Concerning Technology In Compliance, Sean J. Griffith

Brooklyn Journal of Corporate, Financial & Commercial Law

In this symposium Essay, I apply insights from philosophy and psychology to argue that modes of achieving compliance that focus on technology undermine, and are undermined by, modes of achieving compliance that focus on culture. Insisting on both may mean succeeding at neither. How an organization resolves this apparent contradiction in program design, like the broader question of optimal corporate governance arrangements, is highly idiosyncratic. Firms should therefore be accorded maximum freedom in designing their compliance programs, rather than being forced by enforcement authorities into a set of de facto mandatory compliance structures.

Zappers - Technological Tax Fraud In New Hampshire, Richard Thompson Ainsworth

Faculty Scholarship

No other State is as vulnerable to Zappers as is the State of New Hampshire. Zappers and related software programming, Phantom-ware, facilitate an old tax fraud – skimming cash receipts. In this instance skimming is performed with modern electronic cash registers (ECRs). Zappers are a global revenue problem, but to the best of this author’s knowledge they have not been uncovered in New Hampshire. Seen from a global perspective however, it seems unlikely that they are not here.

New Hampshire’s fiscal vulnerability to Zappers comes from its heavy reliance on precisely the industry segment that has been found to be …

Rwu's New 'Rising Tide' Of Educational Opportunity 9-8-2016, Roger Williams University

School of Law Conferences, Lectures & Events

No abstract provided.

Vat In The Gcc - Missing Trader Frauds, Richard Thompson Ainsworth, Musaad Alwohaibi

Faculty Scholarship

All VATs are susceptible to missing trader (MT) fraud. VATs adopted in an economic community are particularly more susceptible. The EU, for example, loses in excess of €100b annually to this fraud. Given the anticipated adoption of a European-style credit-invoice VAT in the GCC by January 1, 2018, this paper offers a technology-based solution involving the real-time tracking of taxable transactions with centrally collected (securely encrypted) data flows that are risk-analyzed by artificial intelligence (AI).

Too Vast To Succeed, Miriam H. Baer

Michigan Law Review

If sunlight is, in Justice Brandeis’s words, “the best of disinfectants,” then Brandon Garrett’s latest book, Too Big to Jail: How Prosecutors Compromise with Corporations might best be conceptualized as a heroic attempt to apply judicious amounts of Lysol to the murky world of federal corporate prosecutions. “How Prosecutors Compromise with Corporations” is the book’s neutral- sounding secondary title, but even casual readers will quickly realize that Garrett means that prosecutors compromise too much with corporations, in part because they fear the collateral consequences of a corporation’s criminal indictment. Through an innovation known as the Deferred Prosecution Agreement, or DPA, …

Reducing The Rate Of Prison Recidivism In Florida By Providing State Corporate Income Tax Credits To Businesses As An Incentive For Employment Of Ex-Felons, Heidi A. Hillyer

Barry Law Review

No abstract provided.

Skilling Reconsidered: The Legislative-Judicial Dynamic, Honest Services, Fraud, And The Ill-Conceived "Clean Up Government Act", J. Kelly Strader

Fordham Urban Law Journal

No abstract provided.

Introduction: Examining White Collar Crime With Trifocals, Ellen S. Podgor

Fordham Urban Law Journal

No abstract provided.

Skilling: More Blind Monks Examining The Elephant, Julie Rose O'Sullivan

Fordham Urban Law Journal

No abstract provided.

Voluntary Disclosure Fostering Overenforcement And Overcriminalization Of The Fcpa, Karen E. Woody

Scholarly Articles

Professor Peter Reilly’s article, Incentivizing Corporate America to Eradicate Transnational Bribery Worldwide: Federal Transparency and Voluntary Disclosure Under the Foreign Corrupt Practices Act, 67 Fla. L. Rev. 1683 (2015), challenges the notion that voluntary disclosure of potential Foreign Corrupt Practices Act (FCPA) violations to the government is always the best course of action for a company. In a world where whistleblowers can receive a bounty for information provided to the Securities and Exchange Commission (SEC),2 self-reporting is a critical, high-pressure decision that each company must undertake when faced with potential FCPA liability.

This Article takes a broader look at …

The Development And Evolution Of The U.S. Law Of Corporate Criminal Liability And The Yates Memo, Sara Sun Beale

Faculty Scholarship

No abstract provided.

The Pendulum Swings: Reconsidering Corporate Criminal Prosecution, David M. Uhlmann

Articles

Corporate crime continues to occur at an alarming rate, yet disagreement persists among scholars and practitioners about the role of corporate criminal prosecution. Some argue that corporations should face criminal prosecution for their misconduct, while others would reserve criminal prosecution for individual corporate officials. Perhaps as a result of this conflict, there has been a dramatic increase over the last decade in the use of deferred prosecution and non-prosecution agreements for some corporate crimes, even as the government continues to bring criminal charges for other corporate crimes. To move beyond our erratic approach to corporate crime, we need a better …

Another Bite At The Apple For Trade Secret Protection: Why Stronger Federal Laws Are Needed To Protect A Corporation's Most Valuable Property, Alissa Cardillo

Brooklyn Journal of Corporate, Financial & Commercial Law

Trade secrets are one of a corporation’s most valuable assets. However, they lack adequate protection under federal law, leaving them vulnerable to theft and misappropriation. As technology advances, it becomes easier and less time consuming for individuals and entities to access and steal trade secrets to a corporation’s detriment. Most often these thefts involve stealing trade secrets in an intangible form. Current legislation fails to adequately protect intangible trade secrets, leaving them vulnerable to theft. An amendment to the National Stolen Property Act that encompasses intangible trade secrets would close a loophole that currently exists relating to intangible assets, allowing …

Trending @ Rwulaw: Susan Schwab Heyman's Post: Defining The Boundaries Of Insider Trading, Susan Schwab Heyman

Law School Blogs

No abstract provided.

Unsophisticated Sentencing, Miriam Baer

Faculty Scholarship

No abstract provided.

Phishing And Vat Fraud In Co2 Permits: The Digital Invoice Customs Exchange Solution, Richard Thompson Ainsworth

Faculty Scholarship

In accordance with Directive 2003/87/EC of October 13, 2003, trade in greenhouse gas emissions commenced in the European Union (EU) on January 1, 2005. The EU-Emissions Trading System (EU-ETS) was born.

The EU has a Value Added Tax (VAT). VAT is a transaction-based levy on all trade in goods and services. Each Member State has a VAT as a condition of membership. Until January 3, 2017 transactions in CO2 permits are taxed as services. After this date they are exempt as financial instruments.

This change in VAT treatment of CO2 permits is directly attributable to rampant fraud in the market. …

Deferred Prosecutions And Corporate Governance: An Integrated Approach To Investigation And Reform, Lawrence A. Cunningham

Florida Law Review

When evaluating how to proceed against a corporate investigative target, law enforcement authorities often ignore the target’s governance arrangements, while subsequently negotiating or imposing governance requirements, especially in deferred prosecution agreements. Ignoring governance structures and processes amid investigation can be hazardous, and implementing improvised reforms afterwards may have severe unintended consequences—particularly when prescribing standardized governance devices. Drawing, in part, on new lessons from three prominent cases—Arthur Andersen, AIG, and Bristol-Myers Squibb—this Article criticizes prevailing discord and urges prosecutors to contemplate corporate governance at the outset and to articulate rationales for prescribed changes. Integrating the role of corporate governance into prosecutions …

Confronting The Two Faces Of Corporate Fraud, Miriam H. Baer

Florida Law Review

Some criminals engage in meticulous planning. Others commit crimes in the heat of the moment. Corporate fraud incorporates both planned and spur-of-the-moment misconduct. Although law and economics scholars have traditionally viewed corporate fraud as a manifestation of opportunism among the corporation’s agents, a new generation of scholars, influenced by findings in behavioral psychology, has focused on the temporal aspects of corporate misconduct. Wrongdoing comes about, not simply because an agent opportunistically takes advantage of her principal, but also because her short-term self falls prey to temptations and cognitive biases that effectively disable her law-abiding long-term self.

Although the law and …

"Defensive Territoriality": A New Paradigm For The Prosecution Of Extraterritorial Business Crimes, Ellen S. Podgor

Georgia Journal of International & Comparative Law

No abstract provided.

Sales Suppression As A Service (Ssaas) & The Apple Store Solution, Richard Thompson Ainsworth

Faculty Scholarship

The problem of sales suppression fraud is estimated to cost state and local governments $20 billion annually ($2 billion in New York restaurants alone). Modern sales suppression (skimming) is carried out with technology (Zappers and Phantom-ware). Nine undercover sting operations in and around Manhattan and the Bronx by investigators working for New York’s Department of Taxation and Finance (NY-DT&F) have identified the SSaaS variant of modern skimming.

A striking example of SSaaS may be unfolding in the $1 million sales suppression case against Congressman Michael Grimm (R-NY). It is alleged that Grimm skimmed sales from his Healthalicious restaurant in Manhattan, …

The Year Of Magical Thinking: Fraud, Loss, And Grief, Jayne W. Barnard

Faculty Publications

In The Year of Magical Thinking, her wrenching memoir of the year following the death of her husband John Gregory Dunne, Joan Didion describes the episodes of magical thinking that forestalled her acceptance of Dunne's sudden absence from her life. In the hours after his death, she charged his cell phone. Weeks later, she gave his clothes to charity but kept his shoes because, she thought, "He would need shoes if he were to return."

Modern grief theory tells us that episodes like these are common during the months following a loved one's death, particularly when the death, like …

Toward Greater Guidance: Reforming The Definitions Of The Foreign Corrupt Practices Act, Matthew W. Muma

Michigan Law Review

The Foreign Corrupt Practices Act of 1977 is the cornerstone of the United States’ efforts to combat the involvement of U.S. companies and individuals in corruption abroad. Enforced by both the Securities and Exchange Commission (“SEC”) and the Department of Justice (“DOJ”), the Act targets companies and individuals that pay bribes to “foreign officials,” a nebulous category of persons that includes everyone from foreign cabinet members to janitors at companies only partially owned by a foreign state. After only sporadic enforcement in the early years of the Act’s existence, the SEC and DOJ now bring many cases annually. This increased …

Pre-Crime Restraints: The Explosion Of Targeted, Non-Custodial Prevention, Jennifer Daskal

Scholarly Articles in Law Reviews & Journals

This Article exposes the ways in which noncustodial pre-crime restraints have proliferated over the past decade, focusing in particular on three notable examples — terrorism-related financial sanctions, the No Fly List, and the array of residential, employment, and related restrictions imposed on sex offenders. Because such restraints do not involve physical incapacitation, they are rarely deemed to infringe core liberty interests. Because they are preventive, not punitive, criminal law procedural protections do not apply. They have exploded largely unchecked — subject to little more than bare rationality review and negligible procedural protections — and without any coherent theory as to …

The Development And Evolution Of The U.S. Law Of Corporate Criminal Liability, Sara Sun Beale

Faculty Scholarship

In the United States, corporate criminal liability developed in response to the industrial revolution and the rise in the scope and importance of corporate activities. This article focuses principally on federal law, which bases corporate criminal liability on the respondeat superior doctrine developed in tort law. In the federal system, the formative period for the doctrine of corporate criminal liability was the early Twentieth Century, when Congress dramatically expanded the reach of federal law, responding to the unprecedented concentration of economic power in corporations and combinations of business concerns as well as new hazards to public health and safety. Both …

Shirking, Opportunism, Self-Delusion And More: The Agency Problem Today, Jayne W. Barnard

Faculty Publications

No abstract provided.

When Does Sleaze Become A Crime? Redefining Honest Services Fraud After Skilling V. United States, Teresa M. Becvar

Chicago-Kent Law Review

Honest services fraud, which is defined as a scheme or artifice to deprive another of the intangible right of “honest services,” is just one tool in the federal government’s extensive arsenal used to prosecute public corruption and private corporate fraud. The Supreme Court curtailed the expansion of this versatile theory twice in the past three decades, most recently in June 2010 in Skilling v. United States. In Skilling, the Court held, inter alia, that the federal honest services statute covers only bribery and kickback schemes and not undisclosed self-dealing. Months later, members of Congress proposed the Honest Services …

Zappers & Employment Tax Fraud, Richard Thompson Ainsworth

Faculty Scholarship

Beyond the grey area of worker misclassifications and general employment tax irregularities there are darker employment relationships where workers are intentionally paid in cash “off-the-books” or “under-the-table.” Grey employment relationships present civil enforcement issues that may become criminal; darker-relationships are criminal from the beginning. Zappers are found on the dark side.

Zappers are fraud-technologies that automatically (and remotely) skim cash from electronic cash registers (ECRs) or back room point of sales (POS) systems. Globally, tax auditors are finding that Zappers frequently provide the cash that is used to compensate “under-the-table” workers. In fact, a Zapper appears to be at the …

Responsible Shares And Shared Responsibility: In Defense Of Responsible Corporate Officer Liability, Amy J. Sepinwall

Studio for Law and Culture

When a corporation commits a crime, whom may we hold criminally liable? One obvious set of defendants consists of the individuals who perpetrated the crime on the corporation’s behalf. But according to the responsible corporate officer (RCO) doctrine – a doctrine that is growing more widespread – the state may also prosecute and punish those corporate executives who, although perhaps lacking “consciousness of wrongdoing,” nonetheless have “a responsible share in the furtherance of the transaction which the statute outlaws.” In other words, the RCO doctrine imposes criminal liability on the executive who need not have participated in her corporation’s crime; …

Deferred Prosecution And Non-Prosecution Agreements And The Erosion Of Corporate Criminal Liability, David M. Uhlmann

Articles

On April 5, 2010, a massive explosion killed twenty-nine miners at Massey Energy's Upper Big Branch mine near Montcoal, West Virginia. Following the explosion, President Barack Obama vowed that the U.S. Department of Labor would conduct "the most thorough and comprehensive investigation possible" and work with the U.S. Department of Justice ("Justice Department" or the "Department") to address any criminal violations. Later in the month, the President and Vice President flew to West Virginia to eulogize the victims and comfort their families. It was the nation's worst coal mining disaster in forty years. The tragic loss of life at the …