New Bill Could Make It Harder to Prosecute White Collar Crimes

A new bill introduced in the U.S. House of Representatives by Rep. F. James Sensenbrenner Jr. (R-WI) could make it more difficult for federal prosecutors to prove white collar crimes. A provision in the Criminal Code Improvement Act of 2015 would require prosecutors to prove intent — i.e., that a white collar defendant knew, or had reason to believe, that his or her conduct was illegal.

The bill’s primary purpose is to make some technical corrections to the federal criminal law by clarifying terminology used in a number of statutes. It has been passed by the House Judiciary Committee with bipartisan support.

Specifically, the provision would require that if a federal criminal offense does not specify intent as necessary to establish a violation, prosecutors must prove that a defendant’s state of mind was “knowing.” Another requirement is “if the offense consists of conduct that a reasonable person in the same or similar circumstances would not know, or would not have reason to believe, was unlawful, the government must prove that the defendant knew, or had reason to believe, the conduct was unlawful.” In other words, ignorance of the law may be a defense to certain white collar crimes.

The bill would not change federal crimes that already contain the statutory language of intent — i.e., “knowingly,” “intentionally,” or “willfully.” However, for certain white collar crimes that do not already specify intent like mail fraud and wire fraud, the bill could provide stumbling blocks for federal prosecutors when litigating those crimes — even though courts have generally determined that fraud requires proving intent.

The Senate bill introduced by Sen. Orrin Hatch (R-UT), known as the Mens Rea Reform Act of 2015, would require prosecutors to prove a defendant acted “willfully” in committing a white collar crime where the statute did not contain the element of intent.

Not surprisingly, the Justice Department opposes the bills, stating that “countless defendants who caused harm would escape criminal liability by arguing that they did not know their conduct was illegal.”

The Cogdell Law Firm is a boutique law firm focusing on large, complex business and criminal financial-related litigation, including white collar criminal defense, securities fraud, health care fraud investigation, criminal appeals and state criminal defense. When results matter most, contact Dan Cogdell at (713) 426-2244 or dan@cogdell-law.com.

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