In this lesson, we're going to talk about crimes. We're going to go through a few of the common crimes that you should be aware of when running your business so that you can stay out of trouble. First, we'll talk about bribery, then tax fraud, and wire and mail fraud. We'll go through a few computer crimes and then we'll round out with talking about obstruction of justice. What is a crime? A crime is an act that breaks the law and it's punishable by a government entity, either the federal government or a state government. It typically includes some pretty stiff penalties, including prison time. In this lesson, what we're going to do is try to introduce some common crimes to you so that you understand what is involved with these particular statutes, and to help you get sensitized to areas where you may want to seek help from council. The first is bribery. Bribery is paying off or even offering to pay a government official in order to influence government decisions. Now, bribes can come in many forms. The worst possible form is if you're paying a government official to get some type of government action done, or offering to pay a government official for the same thing. But bribes can also be less obvious. Training a government official to a nice dinner or flying out a government official in hopes of getting that official to make a certain governmental decision. These types of things that they're not as obvious as paying or offering the pay directly, but they could get you in trouble and land you in jail for bribery. In the US, we have a law called the Federal Corrupt Practices Act or the FCPA. What this law is designed to do is to punish individuals who engage in bribing-type activities. Now, there are some special considerations that you should think about if you're doing business in China. In China, a lot of private companies are owned by the Chinese government. You may be engaging in conversations with private companies and you may think that you're completely fine when it comes to bribing laws. But because these companies are owned by the Chinese government, engaging with those companies, and if you are getting into a place where you're paying these companies to do certain things, you may be falling under the rubric of the Federal Corrupt Practices Act. Tax fraud. Everyone knows you got to pay taxes as an individual, but also as a corporation. Your company also must pay its taxes. There are several criminal penalties for violating the IRS rules. The IRS rules in the US or Internal Revenue Code is the body of law that governs the tax law in the US. Now around the world, there are other similar tax entities that regulate the amount of tax that's due in that particular jurisdiction. You want to make sure you understand what the tax laws are in every country in which you're doing business so that you're ensuring that you're complying with those tax laws. Now, willful tax evasion, that's the idea that you know what taxes are due and you're intentionally trying to take steps to avoid paying that tax. That's usually punishable by of some pretty stiff criminal penalties. You want to make sure you stay away from taking steps intentionally to avoid paying the tax that your company may be due. A less obvious one is an employee tax withholdings. As an employer, you have an obligation to withhold taxes from your employee's pay and to remit those taxes to the government. Now, withholding those taxes from your employees and then using that withholding for other things, that could not just get your company in trouble, but it could lead to personal liability for you as an employer. You want to make sure you understand the law around employee withholdings and taxes so that you don't get yourself in a situation where you are being prosecuted for tax fraud. Now, mail and wire fraud, this is a very common crime. Prosecutors use it a lot because it's very easy to get a conviction under mail and wire fraud. This body of law is pretty broad, but this body of law is intended to prohibit people from using the mail or phone lines to further any type of fraudulent purpose. Embezzling or even tax fraud or other crimes using the mail system, using a phone line, even using the Internet. Because the Internet is going to be across phone lines for purposes of these bodies of law. It can land you in trouble. Just be very careful about fraudulent purposes. As a business owner, you want to make sure that all of your business operations are upright. Any of your employees aren't engaging in fraudulent misrepresentation and certainly not using the mail or the Internet or other phone lines, phone calls, conversations to engage in these types of activities. This is a very broad area of the law and it's a very easy one for prosecutors to land a conviction. Oftentimes, they also accompany other crimes. There may be another crime that was committed prosecutors will tack on a mail or wife fraud allegation on top of it. Because they know they can get a conviction there and that usually is issues is leveraged for a plea bargain or a settlement that could land you in jail. Let's talk a bit about computer crimes. In the US, we have a Computer Fraud and Abuse Act. In other countries, they are very similar laws around crimes to the use of computers. You see these typically come up when people are using computers to embezzle funds. Like sending messages to others about the need for money and then that money then being embezzled from the company. There are two things that prosecutors look at when they're prosecuting under this particular body of law, and that's unauthorized access to a computer. Also transmitting a harmful program like a virus to a computer to do some harm to databases or other information that's stored on the computer. Another type of crime that often comes up in connection with computers is computer piracy. Computer piracy is essentially misusing software that you're not authorized to use. Oftentimes we see this comes up when companies are not following a license agreement for software, or they are posting software or using software that they no longer have a license agreement too. In this scenario, your engineers may be downloading software or using software to help further your business purpose. You want to make sure that they have licenses to any software that they're using on behalf of your company. A failure to do that could land you with a computer piracy claim that could get you in a lot of trouble. Now, finally, let's talk about obstruction of justice. This is also a pretty broad area of the law, but one that you should be very aware of as a business owner. Impeding any investigation, in a state level, at federal level, it can be considered obstruction of justice. If your business is involved in an investigation, you want to make sure you're fully cooperative with the authorities that are doing their investigation. You don't want to engage in anything like destroying evidence because that will also be considered obstruction of justice. Lying to investigators or not being completely forthcoming. Omitting things that you should certainly disclose to investigators that can also be considered obstruction of justice. Also, if you have an employee that say something going wrong, someone is breaking the law and the employee raises this issue is what we call a whistleblower. The employee raises an issue of activities that are happening in the company. Retaliating against a whistleblower employee is also illegal, and that can be considered obstruction of justice, you and your company can be prosecuted for doing that. This is just a few examples of the types of things that can be considered obstruction of justice. There are many other ways that prosecutors can look at this particular body of law. But the idea for you to keep in mind is if your companies involved in an investigation, you want to make sure that you're being fully forthcoming, fully cooperative with authorities. That's the general approach that you're taking, you'll be fairly okay when it comes to obstruction of justice. Keep in mind though, that if your company has ever involved in an investigation, whether fully or tangentially, you want to make sure you immediately seek the advice of counsel to help you walk through what your rights and obligations may be. In summary, you want to be aware that conduct that may be criminal that's happening at your company. Whether it's bribery or mail or wire fraud, tax fraud, and you want to remind your employees, to not engage in those types of activities, because as an employer, you may be liable for the criminal acts of your employees. Now, criminal behavior that may help course, disregard the corporate form that they can pierce the corporate veil and it can result in personal liability for the company's owners and managers and you as the founder of the company. Again, and I'll reiterate this as we close out this lesson. If your company is involved in a criminal investigation, you want to immediately seek advice of counsel, so that you understand what your rights and obligations may be.
