# Business Law Study Set 1

## Quiz 8 :Crimes

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Doyle E. Campbell, an ophthalmologist, established his practice in southern Ohio in 1971. Many of Dr. Campbell's patients are elderly people who qualify for federal Medicare benefits and state Medicaid benefits. Under the existing financing system, a doctor who treats a Medicare patient is required to submit a "Medicare Health Insurance Claim Form" (HCFA Form 1500). The doctor is required to certify that "the services shown on this form were medically indicated and necessary for the health of the patient and were personally rendered by me or were rendered incident to my professional service by my employees." Claims Dr. Campbell submitted for his elderly patients ranged from $900 to$950, of which $530 to$680 were covered by the Medicare program. The government alleged that Dr. Campbell billed Medicare for several treatments that were either not performed or not necessary. Dr. Campbell was charged with fraud for the paperwork he submitted. Has he committed a crime [United States v Campbell, 845 F 2d 1374 (6th Cir)]
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Refer to the case US v Campbell (845 F2d 1374)
Facts:
1) Campbell (defendant) owns an ophthalmology clinic. His clinics served Medicaid and Medicare clients and which required submission of a claim form for services rendered
2) The government sued Campbell alleging fraud for submitting claims where services were not performed or were unnecessary
3) Trial court found Campbell and others guilty for making false claims. Campbell appealed
The appeals court affirmed. Campbell made a defense that he can't be convicted for fraud and false claims since he had gave treatment to those patients. However, the court reasoned that under law it doesn't matter whether a treatment was performed if it was unnecessary treatment it can still be treated as false claim. The expert witness another ophthalmologist testified that Campbell performed unnecessary eye laser treatments to patients who weren't even suffering from diseases requiring it. Furthermore, the treatment gave by defendant were ineffective and did not comply with standards.

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J., Inc., and other customers of Northwestern Bell Corp. alleged that Northwestern Bell had furnished cash and tickets for air travel, plays, and sporting events and had offered employment to members of the Minnesota Public Utilities Commission in exchange for favorable treatment in rate cases before the commission. A Minnesota statute makes it a felony to bribe public officials. H. J. and other customers brought suit against Northwestern for violating the criminal bribery statute. Can the customers bring a criminal action [H. J., Inc. v Northwestern Bell Corp., 420 NW2d 673 (Minn App)]
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Crime is referred as an action taken by a person which is punishable by law. Crimes which are less serious in nature and require person to spend less than 1 year in prison are called misdemeanors. While more serious crimes are referred as felonies.
Case summary:
Plaintiff is a group of people who are customers of N (defendant) a regional telephone company. Plaintiff sued defendant alleging defendant bribed members of Minnesota's Public Utilities Commission for favorable treatment in rates.
Bribery is an act of providing monetary or non-monetary benefits to an individual in order to influence his decision in one's favor. Bribery is a white-collar crime.
The plaintiff are civilians therefore, the action which was alleged under bribery statute of criminal law do not provide any private remedies as it contains no provision for such remedies.
Bribery under common law also do not have any cause of action in Minnesota state. Under criminal law the civil action can only be taken if it appears that it was the legislative intent. Since there was no legislative intent to provide civil cause of action in criminal statute, the customers cannot bring the criminal action.
Simply the private cause of action cannot come under the criminal statute. Thus, customers cannot bring the criminal action.
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Baker and others entered a Wal-Mart store shortly after 3:00 A.M. by cutting through the metal door with an acetylene torch. They had moved some of the merchandise in the store to the rear door, but the police arrived before the merchandise could be taken from the store. Baker was prosecuted for larceny. He raised the defense that he was not guilty of larceny because no merchandise had ever left the store. Is there enough intent and action for a crime [Tennessee v Baker, 751 SW2d 154 (Tenn App)]
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Crime is referred as an action taken by a person which is punishable by law. Crimes which are less serious in nature and require person to spend less than 1 year in prison are called misdemeanors. While more serious crimes are referred as felonies.
Case summary:
Defendant including B broke into a W after 3:00 AM. When they were in process of moving some goods out of the store via the rear door, police came and arrested them before goods were taken out of the store. T's prosecution included the charge of grand larceny. B argued not being guilty under larceny.
The criminal liability consists of two elements of crime namely:
• Mental state : It refers to the intent of the action. It does not require any knowledge of guilt, that is the voluntary action alone is enough to prove mental state.
• Act or omission : This refers to the conduct of person which when coupled with mental state form the crime.
In this case the metal door was cut through with the acetylene torch and goods were moved from their intended place to rear door. The defendants trespass the property which is referred as unauthorized entry to the owner's property. This proves that intent of the act was to steal the goods from the store. Thus, it forms the mental state and omission of a crime.
The larceny comes under common law crimes. It refers to taking the personal property of another person through fraudulent actions and intent. Depending upon the state the shoplifting comes under the larceny. The defendant contested that since goods were not moved from the store, they were not shoplifted.
However, the goods were not in place where they should be or intended to be by the store. The only reason they were not able to shoplift them was because of timely arrival of police. The intent was fraudulent because of trespassing and the action was fraudulent too, which is trying to take away the personal property of other person or company.
There must be asportation that is the goods must be moved after the trespass for crime to be considered. The goods were moved to rear door from their intended place after trespassing. Thus, it was case of asportation.
There was no doubt that defendants had trespass into the store. The main contention was whether their handling of the goods fall under asportation. The court believed it did, reasoning that just moving the good within the store with the intention of taking it is asportation hence larceny. Thus, there was enough action and intention for a crime.

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James Durham runs an art gallery. He has several paintings from unknown artists that he has listed for sale. The paintings always sell at his weekly auction for $20,000 to$50,000 above what James believes them to be worth. James learns that the bidders at the auctions are employed by an olive distributor located near the shipping yards of the city. What concerns should Durham have about the art, the bidders and the large purchase prices
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Howell made long-distance telephone calls through the telephone company's computercontrolled switching system to solicit funding for a nonexistent business enterprise. What crimes did Howell commit [New Mexico v Howell, 895 P 2d 232 (NM App)]
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Carriage Homes, Inc. was a general contractor that built multifamily residential and land-development projects in Minnesota. John Arkell was Carriage Homes' chief executive officer, president, and sole shareholder. Carriage Homes built Southwinds, a condominium development of 38 residential units in Austin, Minnesota. The foundation elevations of some of the Southwinds units were lower than permitted under the State Building Code, causing storm water to pool in the units' driveways and garages. The city of Austin's development director sent Arkell a series of seven letters in 1999 and 2001 concerning the elevation problems, and Arkell gave the letters to the project managers, who failed to resolve the problems. Minnesota makes a violation of the State Building Code a misdemeanor. On May 30, 2001, the state charged Carriage Homes and Arkell with three misdemeanor counts each, alleging a violation of the Uniform Building Code (UBC). Carriage Homes pleaded guilty and was sentenced to a $1,000 fine. But Arkell pleaded not guilty, asserting that he could not be held criminally responsible for the violation. After a bench trial, the district court found Arkell guilty. He was sentenced to pay a fine, pay restitution to the condominium owners, and serve 90 days in jail, with 80 days stayed pending his compliance with sentencing conditions. Mr. Arkell appealed on the grounds that the employees and subcontractors had simply not followed his orders and he was not responsible for their failures. Is he correct [State v Arkell, 657 NW2d 883 (Minn. App. 2003)] Essay Answer: Tags Choose question tag Jennings operated a courier service to collect and deliver money. The contract with his customers allowed him a day or so to deliver the money that had been collected. Instead of holding collections until delivered, Jennings made short-term investments with the money. He always made deliveries to the customers on time, but because he kept the profit from the investments for himself, Jennings was prosecuted for embezzlement. Was he guilty [New York v Jennings, 504 NE2d 1079 (NY)] Essay Answer: Tags Choose question tag In the late 1980s, Life Energy Resources, Ltd. (LER), a New York corporation, was a multilevel marketing network. LER's marketing plan provided that members of the general public could purchase its products only through an official LER distributor or by becoming LER distributors themselves. Each potential distributor had to be sponsored by an existing distributor and was required to sign a distributorship agreement with LER stating that he or she would not make medical claims or use unofficial literature or marketing aids to promote LER products. Ballistrea and his partner Michael Ricotta were at the top of the LER distribution network. Two products sold by LER were the REM SuperPro Frequency Generator (REM) and the Lifemax Miracle Cream (Miracle Cream). The REM, which sold for$1,350 to distributors, was a small box powered by electricity that ran currents through the feet and body of the user. Ballistrea and Ricotta distributed literature and audiotapes to many potential downstream distributors and customers-some of whom were undercover government agents-touting the REM and the Miracle Cream. Other literature claimed that the Miracle Cream could alleviate the discomforts of premenstrual syndrome and reverse the effects of osteoporosis. The Food and Drug Administration charged Ballistrea and Ricotta with violating federal law for making medical claims concerning LER products. Their defense is that they never sold any of the products. They simply earned commissions as part of the marketing scheme and could not be held criminally liable on the charges. Are they correct [United States v Ballistrea, 101 F 3d 827 (2d Cir)]
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In April 2006, a DC-9 aircraft landed in the port city of Ciudad del Carmen, located 500 miles east of Mexico City. When the plane's crew began directing security personnel away from the plane, the suspicious activity piqued the curiosity of local law enforcement officials. They decided to search the plane and found 128 suitcases packed with over 56 tons of cocaine. The cocaine was to have been delivered to Toluca, near Mexico City. In investigating the plane and individual involved, law enforcement agents discovered that the plane had been purchased with money that had been laundered through two U.S. banks, Wachovia Corp. and Bank of America Corp. Neither bank was actually aware that the money was being used to purchase a plane that would then be used for drug trafficking. Are the banks still criminally liable for breaking the rules Explain why or why not. What if the banks were aware of large sums of money being run through particular customers' accounts Would that knowledge make a difference
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The Banco Central administered a humanitarian plan for the government of Ecuador. Fernando Banderas and his wife presented false claims that the bank paid. After the fraud was discovered, the bank sued Banderas and his wife for damages for fraud and treble damages under the Florida version of RICO. Banderas and his wife asserted that they were not liable for RICO damages because there was no proof that they were related to organized crime and because the wrong they had committed was merely ordinary fraud. They had not used any racketeering methods. Is involvement with organized crime a requirement for liability under RICO [Banderas v Banco Central del Ecuador, 461 So2d 265 (Fla App)]
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Bernard Flinn operated a business known as Harvey Investment Co., Inc./High Risk Loans. Flinn worked as a loan broker, matching those who came to him with lenders willing to loan them money given their credit history and the amount involved. From 1982 through 1985, Flinn found loans for five people. Indiana requires that persons engaged in the business of brokering loans obtain a license from the state. Flinn was prosecuted for brokering loans without having a license. He raised the defense that he did not know that a license was required and that, accordingly, he lacked the criminal intent to broker loans without having a license. Does Flinn have a good defense [Flinn v Indiana, 563 NE2d 536 (Ind)]
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Gail drove her automobile after having had dinner and several drinks. She fell asleep at the wheel and ran over and killed a pedestrian. Prosecuted for manslaughter, she raised the defense that she did not intend to hurt anyone and because of the drinks did not know what she was doing. Was this a valid defense
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