White Collar Crime: Reading Minds

This article was republished with permission from Michael Volkov’s Corruption, Crime & Compliance.

The difference between white collar and violent crime usually comes down to this: in most cases of violent crime, the actor’s state of mind is not at issue; the cases often center on whether the specific person charged was the one who killed/shot/assaulted the victim.  If he or she was the actor, then the issue may turn to self-defense.  (I know this is simplistic, but grant me a little leeway to make my point).

In most cases of white collar crime, no one disputes the conduct, it is the surrounding intent.

The actor may have taken someone out for a lavish dinner, handed them a Rolex watch and then walked away after a nice evening together.

Did the actor give these gifts with “corrupt” intent in order to improperly influence the recipient? Here, it is the state of the actor’s mind at issue.

White collar crime boils down to reading the actor’s mind.  Whether it is bribery, illegal gratuities or some other intent-driven crime, the government has to prove beyond a reasonable doubt that the act occurred and the actor had the requisite intent.

Prosecutors look for “indicia” of corrupt intent.  In many cases, the government does not have direct evidence of the actor’s state of mind.  The actor did not say, “I am giving this to you to make sure you award me the contract.”

Instead, prosecutors have to collect evidence from which a reasonable person can infer the actor’s intent.

That is why bribery is a hard crime to prove.  You have to convince a jury beyond a reasonable doubt that the actor had the requisite intent.  The defense often can point to other explanations for the actor’s conduct and will bring in direct and circumstantial evidence to support that alternative explanation.

In the FCPA context, the government’s burden is to prove beyond a reasonable doubt that the actor had “corrupt intent.”   Even if the government offers evidence the actor provided gifts, meals, entertainment and other benefits to the foreign official, the question is whether the actor do so with corrupt intent.  To meet the burden of proof, the government will cite surrounding circumstances – e.g. the pendency of a contract award, the importance of the contract to a company, the actor’s desire for a contract.

This is the reason I advise companies to devise systems to document legitimate, good faith reasons for their actions.  Such evidence provides a contemporaneous record of what the company is thinking and the good faith reasons for its actions.   This evidence “negates” any suggestion of corrupt intent.

The government’s burden is significantly greater when it has to prove corrupt intent beyond a reasonable doubt, and overcome the documented evidence showing that the company acted in good faith to comply with the law.

I often short-hand this strategy by saying, “If you act in good faith, and document the reasons for your actions, no one will go to jail.”