Business Law - Chapter 07 Crime and the Business Community

The primary purpose of criminal law is to compensate a victim. 
FALSE

Commission of the offense of grand larceny involves the theft of larger items as opposed to smaller items that can be hidden, for example, in a purse. 
FALSE

Under our criminal laws that exist today, white-collar crime is not punishable by imprisonment. 
FALSE

Congress amended the Foreign Corrupt Practices Act to conform to the Anti-Bribery Convention adopted by the Organization for Economic Cooperation and Development. 
TRUE

Mail fraud is a federal crime. 
TRUE

Embezzlement is distinguished from larceny because in embezzlement the individual does not take the property from another and is already in possession of the property. 
TRUE

China punishes embezzlement and bank fraud less severely than the U.S. 
FALSE

Under the common law, a corporation could not be considered a criminal because it was not an actual person and, thus, did not have a mind. 
TRUE

Under current law, corporations cannot be held criminally accountable for strict-liability offenses. 
FALSE

A person who is considered an infant under the law cannot be tried as an adult under any circumstances. 
FALSE

The test used to establish one's mental state when insanity is claimed is the same regardless of the jurisdiction involved. 
FALSE

The court in U.S. v. Gerson Cohen ruled that a person accused of mail fraud must place particular documents into the U.S. mail himself or herself in order to be convicted of that offense. 
FALSE

Which of the following is the term that describes wrongful behavior in a criminal action? 
A. Mens rea.
B. Actus reus.
C. Res judicta.
D. Stare decisis.
E. None of the above.

Which of the following is a term describing the wrongful state of mind needed for a criminal action? 
A. Mens rea.
B. Actus reus.
C. Res judicta.
D. Stare decisis.
E. None of the above.

Strict liability is a term used to describe which of the following?
A. Liability without fault.
B. Negligence.
C. Actus reus.
D. Intentional wrongdoing.
E. Recklessness.

Which of the following is an example of the imposition of strict liability? 
A. A robber pulls a gun to rob a bank teller.
B. A burglar breaks into a home to steal jewelry.
C. A business sells cigarettes to a minor.
D. A minor shoplifts in a department store.
E. An adult shoplifts in a department store.

Which of the following is punishable by imprisonment for more than one year or death? 
A. Misdemeanor.
B. Felony.
C. Petty offenses.
D. Tort offenses.
E. Any business related crime.

Which of the following are less serious crimes punishable by fines or imprisonment of less than one year? 
A. Misdemeanor.
B. Felony.
C. Petty offenses.
D. Tort offenses.
E. Any business related crime.

Which of the following are minor offenses usually punishable by a jail sentence of less than six months or a small fine with an example being violation of a building code? 
A. Insignificant offenses.
B. Felony.
C. Petty offenses.
D. Tort offenses.
E. Any business related crime.

Which of the following is the forceful and unlawful taking of personal property? 
A. Robbery
B. Burglary
C. Larceny
D. Arson
E. Criminal fraud

Which of the following occurs when someone unlawfully enters a building with the intent to commit a felony? 
A. Robbery
B. Burglary
C. Larceny
D. Arson
E. Criminal fraud

Which of the following is the secretive and wrongful taking and carrying away of the personal property of another with the intent to permanently deprive the rightful owner of its use or possession? 
A. Robbery
B. Burger
C. Larceny
D. Arson
E. Criminal fraud

Which of the following is the intentional burning of another's dwelling? 
A. Robbery
B. Burglary
C. Larceny
D. Arson
E. Criminal fraud

Which of the following serves to combat bribery of foreign officials? 
A. The Foreign Official Bribery Act
B. The International Bribery Prohibition Act
C. The Fair Business Act
D. The International Fair Business Practices Act
E. The Foreign Corrupt Practices Act

Which of the following is the making of threats for the purpose of obtaining money or property? 
A. Bribery
B. Criminal Fraud
C. Extortion
D. Both bribery and extortion
E. Importation

Which of the following is the making of an entry into the books of a bank or corporation that is designed to represent the existence of funds that do not exist? 
A. False entry
B. Defalcation
C. False pretenses
D. Ponzi scheme
E. Pretexting

Which of the following is a false document or sign of existence used to perpetrate fraud, such as making counterfeit money? 
A. False entries
B. False token
C. False pretenses
D. Ponzi scheme
E. Pretexting

Which of the following is the misappropriation of trust funds or money held in a fiduciary capacity? 
A. False entries
B. Defalcation
C. False pretenses
D. Ponzi scheme
E. Pretexting

Which of the following is an investment swindle in which high profits are promised from fictitious sources and early investors are paid off with funds raised from later investors? 
A. False entries
B. False token
C. False pretenses
D. Ponzi scheme
E. Pretexting

Which of the following is using fraudulent means to obtain information about someone's phone use? 
A. Pretexting
B. Ponzi scheme
C. False pretenses
D. False token
E. Defalcation

Zack, the president of ABC Company, falsified documents to make it appear as if he had been granted stock options on certain dates, and he selected the dates after the fact, picking dates on which the stock price was low. Which of the following offenses, if any, did he commit? 
A. Insider trading
B. Pretexting
C. Defalcation
D. Stock option backdating
E. He did not commit any offense

Ed goes door-to-door selling magazine subscriptions. Ed knows, however, that he is simply taking money for subscriptions and has absolutely no intention of ever arranging for the provision of magazines. Which of the following offenses, if any, has he committed? 
A. Defalcation
B. False entry
C. False token
D. False pretenses
E. Ponzi scheme

Which of the following occurs when companies bill consumers for optional services that the consumers did not order? 
A. Slamming
B. Cramming
C. Stuffing
D. Fraudulent adding
E. Fraudulent transfer

In which of the following involves tricking consumers into changing their phone service to another carrier without their consent? 
A. Slamming
B. Cramming
C. Stuffing
D. Fraudulent adding
E. Fraudulent transfer

Bank teller Ben receives $1,000 from a customer for deposit into the customer's bank account. Instead of placing the money into the customer's account, Ben puts it into his pocket. Which of the following offenses has he committed? 
A. Forgery
B. False entries
C. False token
D. Embezzlement
E. Both D and C

Which of the following is a person who illegally accesses or enters another person's or a company's computer system to obtain information or to steal money? 
A. Backer
B. Reacher
C. Hacker
D. Trespasser
E. Illicit user

Which of the following is true regarding corporate executives being held personally liable for business crime? 
A. Corporate executives may never be held personally liable for a business crime.
B. Corporate executives may only be held personally liable for a business crime if they benefited personally from their actions in executing the business crime.
C. Corporate executives may be found personally liable for a business crime regardless of whether the business crime was committed for personal benefit or for the benefit of the corporation.
D. A court may not assess criminal liability on a corporate executive unless the executive directly engaged in the specific criminal violation.
E. Criminal liability may not be assessed against a corporate executive unless the executive directly engaged in the criminal activity and also profited directly and personally from the criminal activity.

Which of the following are considered infants under the law in regards to criminal activity? 
A. Any child five and under.
B. Any child ten and under.
C. Any child twelve and under.
D. Any child sixteen and under.
E. Any person under the age of majority.

Which of the following is generally a legitimate defense to a charge of a crime? 
A. Mistake of law.
B. Vicarious liability.
C. Mistake of fact.
D. Mistake of fact and mistake of law.
E. Mistake of fact, mistake of law and vicarious liability.

Which of the following allows a defendant to be found not guilty by reason of insanity if he or she did not understand the nature of the act? 
A. Irresistible impulse act.
B. Involuntary act.
C. The substantial capacity test.
D. The M'Naghten test.
E. The necessity defense.

Which of the following holds that a person may be deemed not guilty by reason of insanity even if he or she knew that a criminal act was wrong, as long as some "irresistible impulse" resulting from a mental deficiency drove the person to commit the crime? 
A. Irresistible impulse test.
B. Involuntary act.
C. The substantial capacity test.
D. The duress defense.
E. The necessity defense.

Assuming the requisite elements are proven, which of the following is a defense when it is established that a crime is committed because the person committing the act was threatened with immediate bodily harm or loss of life unless the offense was committed? 
A. Entrapment.
B. Necessity.
C. Justifiable use of force.
D. Duress.
E. Inescapable action.

A defendant can use the _____ defense if the idea for a crime originated not with the defendant but with a police officer or other government official who suggested it to the defendant, and the defendant would not otherwise have committed the crime. 
A. Entrapment
B. Necessity
C. Justifiable use of force
D. Duress
E. Inescapable action

A defendant who argues that commission of a crime was necessary to prevent a more severe crime from occurring is relying upon the defense of _______. 
A. Entrapment
B. Necessity
C. Justifiable use of force
D. Duress
E. Inescapable action

Which amendment provides the right to a speedy and public trial? 
A. The Second Amendment.
B. The Third Amendment.
C. The Fourth Amendment.
D. The Fifth Amendment.
E. The Sixth Amendment.

Which of the following is true regarding the Fourteenth Amendment? 
A. It is part of the Bill of Rights.
B. Its safeguards only apply at the federal level.
C. It extends due process and most constitutional protections to all states.
D. It is a part of the Bill of Rights, its protections apply at the federal level, and its protections also apply at the state level.
E. It is not a part of the Bill of Rights, and its protections apply only at the federal level.

Which of the following amendments to the U.S. Constitution specifically sets forth the exclusionary rule? 
A. The Fourth Amendment.
B. The Fifth Amendment.
C. The Sixth Amendment.
D. The Eighth Amendment.
E. None of the above.

Ordinarily, to obtain an arrest warrant, a law enforcement agent must demonstrate that there is ________ that a suspect committed or is planning to commit a crime. 
A. Likely cause
B. Suspected cause
C. Certainty
D. Probable cause
E. Information

Which of the following is true regarding an arrest without a warrant? 
A. A law enforcement agent can arrest a suspect without a warrant if the officer believes there is probable cause but not enough time to obtain a warrant.
B. A law enforcement officer may not arrest a suspect without a warrant even if the officer believes there is probable cause but insufficient time to obtain a warrant.
C. A law enforcement agent can arrest a suspect without a warrant only if a felony is involved.
D. A law enforcement officer can arrest a suspect without a warrant only if a violent crime is involved.
E. A law enforcement officer can arrest a suspect without a warrant only if the suspect is a repeat offender.

Of which of the following must a defendant be informed before questioning? 
A. That the defendant must answer questions or there will be a presumption of guilt at trial.
B. That statements made to law enforcement before arraignment may not be used against the defendant in court.
C. That the defendant has the right to consult an attorney before speaking to the police.
D. That unless the defendant can afford any attorney, the defendant will not have an attorney.
E. That the right to an attorney does not begin until after the defendant is arraigned.

Which of the following occurs when a defendant makes a first appearance? 
A. A magistrate determines whether there was proof beyond a reasonable doubt for the arrest.
B. A magistrate determines whether there was probable cause for the arrest.
C. A magistrate determines whether the defendant was properly booked.
D. A magistrate determines whether there was proof beyond a reasonable doubt for the arrest and also whether the defendant was properly booked.
E. None of the above.

Which of the following is a plea in which the defendant does not admit guilt but agrees not to contest the charges? 
A. Petit defense.
B. Information.
C. Nolo contendere.
D. Sine qua non.
E. Plea avoidance.

A judge reports that a jury was "hung". What does the judge mean? 
A. That the jury wanted to hang the defendant by imposing a heavy sentence.
B. That the jury wanted to hang the prosecutor for unjustly charging the defendant.
C. That the jury could not reach a decision.
D. That the jury had waited an excessive amount of time before reaching a verdict.
E. That the jury had waited an excessive amount of time before retiring for the evening.

Which of the following requires a "pattern"? 
A. The Racketeer Influenced and Corruption Organizations Act.
B. The False Claims Act.
C. The Sarbanes-Oxley Act of 2002.
D. All of the above.
E. None of the above.

Under the Sarbanes-Oxley Act, it is now a felony to willfully fail to maintain proper records of audits and work papers for at least ______ years. 
A. 2
B. 3
C. 4
D. 5
E. 6

Which of the following was created specifically to combat white-collar crime? 
A. The Sarbanes-Oxley Act.
B. RICO.
C. The False Claims Act.
D. 1983.
E. None of the above.

Carla learns that her employer, a healthcare facility, is committing fraud against the government by filing false Medicare claims. Under which of the following might she obtain a portion of any recovery obtained by the government? 
A. RICO.
B. The False Claims Act.
C. The Sarbanes-Oxley Act of 2002.
D. The Medicare Recovery Act.
E. The Healthcare Fraud Act.

Which of the following was passed largely in response to business scandals of the early 2000's, such as those implicated by Enron, WorldCom, Global Crossing, and Arthur Anderson? 
A. RICO.
B. The False Claims Act.
C. The Sarbanes-Oxley Act.
D. The Medicare Recovery Act.
E. The Healthcare Fraud Act.

Under the Sarbanes-Oxley Act, which of the following is true regarding the destruction of documents in a federal bankruptcy investigation? 
A. The destruction of documents in a federal bankruptcy investigation is a misdemeanor with possible sentences of up to 364 days in jail.
B. The destruction of documents in a federal bankruptcy investigation is a felony with possible sentences of up to 364 days in jail.
C. The destruction of documents in a federal bankruptcy investigation is a felony with possible sentences of up to 5 years in jail.
D. The destruction of documents in a federal bankruptcy investigation is a felony with possible sentences of up to 20 years in jail.
E. None of the above.

What was the result in the case of U.S. v. Park, the case in which the defendant, the president of a national food-chain corporation claimed he should not be held liable for allowing food in a warehouse to be exposed to rodent contamination because he had delegated responsibility to subordinates? 
A. The court dismissed all claims against him because of insufficient proof that he had actively allowed contamination.
B. The court dismissed all claims against him because of insufficient proof of negligence.
C. The court refused to dismiss claims against him because the offense was a strict liability offense.
D. The court refused to dismiss claims against him because of insufficient proof of delegation.
E. The court refused to dismiss claims against him because of proof that he had responsibility and authority to prevent the contamination or to correct it and failed to do so.

Which of the following Supreme Court cases established the right to counsel before questioning by the police? 
A. Whaley v. Reeves
B. Glover v. Smith
C. U.S. v. Glover
D. U.S. v. Parks
E. Miranda v. Arizona

Which of the following holds that a person may be deemed not guilty by reason of insanity, even if he or she knew that a criminal act was wrong, as long as the defendant was driven to commit the crime from some urge resulting from a mental deficiency the defendant could not resist?

The irresistible impulse test.