Most people think of bribery as the form among government officials and holders of public offices. However, members of the private sector often knowingly or unknowingly through kickback initiatives, engage in commercial bribery. Commercial bribery occurs when employees or agents of the employer receive gifts to secure an advantage for the giver when the advantage is damaging to the employer. Before you return a favor or accept a gift, you need to ensure that you are not committing commercial bribery. Leah Legal will cover the basics of commercial bribery laws in California and what to do when you are arrested for commercial bribery in Los Angeles.
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Commercial Bribery Overview
California's bribery laws are wide. Most of these were developed to deter bribery among public officials, which is why most people associate bribery to that which involves public officials. Private businesses have long engaged in giving-to-take relationships where they exchange favors, gifts, or money for a benefit. It is almost an accepted part of negotiations that 'smoothens' the way and increases the giver's chances of getting an unfair advantage over others.
Commercial bribery is a white-collar crime in California covered under PC 641.3. The penal code prohibits soliciting or accepting a gift (or money) that is worth $250 or more with the corrupt intent of awarding the giver special consideration or advantage.
A person might give a bribe without telling the receiver that the gift or money is a bribe to smooth things over as they attain their goals. However, you are engaging in commercial bribery after they ask you to do a favor for them to the detriment of your employer.
Commercial bribery laws punish both the giver and receiver of the bribe as they collaborate to defraud or take undue advantage of the employer.
The elements of commercial bribery include: (a) You are an employee with corrupt intent (b) You solicit, accept, or agree to accept (c) money, a gift, or another valuable item whose value is above $250 (d) From someone other than your employer (e) With neither the consent nor knowledge of your employer (f) In exchange for giving the other party an undue advantage or benefit using your position as the employee.
Corrupt intent implies that you commit the bribery or accept the bribe with the full knowledge that the act is illegal, and you intend that the bribe will smoothen your way into getting or giving service.
Employees are bound to their employers by the fiduciary duty, which refers to the legal obligation of the employee to act in a manner that is in the best interests of the employer.
Commercial bribery deprives the employer of the employee loyalty that they should get. In addition, it places an undeserved competitive edge on the receiving party, often at the jeopardy of the employer’s business.
California is strict on commercial bribery due to the effect it has on the economy and the employer. It is also a breach of employee ethics, which could land you in state prison in addition to paying fines.
When your employer gives you the authority to perform business on his or her behalf, or you are allowed to make decisions for his or her behalf, then you are expected to act with integrity. The actions your employer expects you to engage in are those that will further the purpose of the business and are following the policies of the business.
Commercial bribery is hard to detect in most cases due to its widespread use and acceptance in the private sector.
Forms of Commercial Bribery
Commercial bribery takes on different forms depending on the industry. Some of the common types of commercial bribery include:
Kickbacks are the most common form of commercial bribery. It involves an agreement whereby an employee will give an unfair advantage to the bribing person, in exchange for money or a gift. Some people may use kickbacks to get a positive recommendation even when they do not deserve it.
In most cases, kickbacks are hard to detect; therefore, most of them go unprosecuted. However, they result in the hiring of incompetent contractors or vendors or the use of substandard raw materials.
Using incompetent contractors or poor raw materials affects the bottom line of your employer. If the employer detects commercial bribery among his or her employees, he or she may sue you. Some of the red flags that might indicate that a kickback occurred include:
- There lacks a competitive bidding process
- There is minimal or no supervisor of the purchasing process
- The prices of goods and services are higher than normal
- The employee recommends that the business use a vendor or contractor that others avoid
- The contractor has numerous problems with the law and regulatory bodies
- Employees are too close to the vendors
- Management pressurizes its staff to use a particular vendor, for example, an insurance company
- Kickbacks are common in that industry
- The vendor misses on deadlines and is unreliable
- The employee continues using the vendor even after he or she displays poor results
In most cases, kickbacks are pre-negotiated before the service or favor is given. Kickback brokers may also be involved in commercial bribery. These are individuals or entities who help connect two or more people in exchange for a commission form one or both parties. For example, A connects B with company C and then requires B and C to pay him or her for the efforts. Essentially, A is soliciting for a bribe.
Match-fixing is a form of commercial bribery in the sporting industry. It happens when a match-fixer negotiates with the parties in the sport to achieve a predetermined goal in exchange for money or a gift. In match-fixing, a team may play poorly, or other teams let one team win by playing poorly.
Match-fixing aims to gain an advantage in the game or get lesser opponents. Other teams engage in match-fixing to obtain a future competitive advantage.
In some cases, match-fixing is motivated by gambling. The match-fixers arrange that a certain team loses to increase their winnings after the match.
Match-fixing occurs in small and big-league games. Teams whose players are lowly paid, or have corrupt officials are more likely to co-operate in match-fixing schemes.
Match-fixing is illegal and punishable as commercial bribery. The bodies that regulate sports also punish match-fixing through fines and jail time.
The different forms of match-fixing include:
- Spot-fixing fixers predetermine the events at a certain fragment of the game
- Interference with the playing arena
- Match-fixing by referees and officiators
Payola is a form of commercial bribery in the entertainment industry. It is common among record labels, which bribe or offer gifts to broadcasting stations to play a record from a specific singer or label. Record labels are legally allowed to promote their record through a radio station, but the radio has to indicate that the song is played as a part of advertising. However, if the radio fails to inform the listeners, then it is engaging in corruption.
Payola denies record labels and musicians who cannot afford to pay for their songs to be aired a level playing field.
Evidence for Commercial Bribery
When the prosecution brings charges of commercial bribery against you, it must provide proof of the violation. In most cases, the prosecution relies on circumstantial evidence to come up with theories of what might have happened. Depending on the jury and the skills of the prosecuting attorney, the jury might be influenced to believe that indeed, you committed the offense.
Some of the materials used in gathering evidence include bank statements, phone conversations, taped conversations, text messages, and email conversations. These can be used to prove that the parties were in contact at the time the bribery allegedly took place.
The prosecution will also examine your lifestyle during, and after the time the offense was committed and compare it to the one you had before. A sudden change in the lifestyle of the employee in comparison to the income will be analyzed. If, for example, the prosecution notices that you spent money on expensive items that you cannot afford with your current salary, the prosecution will raise questions.
The prosecution also monitors your bank statements and transactions. These provide proof of your banking behavior and could show suspicious activities. In some cases, the prosecution may examine the bank account and spending habits of your wife around the time the crime was allegedly performed to determine whether the two of you collaborated. Other evidence may be collected through subpoenas.
At other times, the prosecution will interview you hoping to get a self-incriminating remark. If the prosecution wants to interview you, you have to refer them to your lawyer or request your lawyer to be present for the questioning.
Commercial bribery cases can also be proven with video surveillance clips if the meeting or exchange occurs in areas with surveillance.
When the prosecution gathers this evidence, it will explain what might have happened. Such a theory aims to show that your actions prove beyond a reasonable doubt that you committed the bribery. Sometimes the prosecution might convince the co-accused to collaborate with the government as a witness in exchange for leniency.
Before your case proceeds to trial, your lawyer will have examined the prosecution’s evidence. He or she may challenge some or all of the evidence through different techniques and using the legal defenses for bribery.
One of the common occurrences in bribery cases is plea-bargaining. It is a pretrial process through which the prosecution and defense make an agreement that is favorable to both sides. The prosecution will come up with a plea deal that requires the defendant to plead guilty to lesser charges or the offense in exchange for lesser or lenient sentencing.
Your lawyer will advise you on the pros and cons of taking a plea deal. If you choose the plea deal, you are already aware of the sentencing you will get. In contrast, going to trial for a bribery case could lead to sentence enhancements and additional charges. When your case goes to trial, the prosecution might dig deeper, which could be potentially harming to you.
If your lawyer believes you have a strong case that is likely to win at trial, then he or she may advise you to reject the plea deal. Whatever the case, you have the right to go to trial instead of settling for a plea deal.
Commercial bribery can result in loss of employment and difficulties in being employed in the future. Employers are likely to shun you for fear of engaging in illegal activities that will jeopardize their bottom line. In addition, your current employer may fire you for engaging in such an activity. In sports, people have lost their chances of ever playing the sport due to sport-related commercial bribery.
Having a defense lawyer by your side can help greatly when you are facing charges for commercial bribery. Below are the common defenses.
Law enforcement officials may be too eager to arrest a person for bribery that they create an incentive for you to commit a crime. Entrapment is rarely used as a defense to bribery. However, your lawyer will provide you with sufficient advice and recommendation of when the defense might work.
When using entrapment as a defense, you have to prove beyond a reasonable doubt that the law enforcement officer coerced or was out to tempt you to commit the offense.
For example, your lawyer will have to prove that you would not have committed the offense under normal circumstances and that the coercion by the law enforcement officer would have made a person who is not inclined to bribing to provide a bribe.
The prosecution has to prove every element of commercial bribery beyond a reasonable doubt. The burden of proof, which rests upon the prosecutor, gives your criminal defense attorney the chance to challenge the defense of the attorney. If the prosecution cannot present the facts that prove each element of the offense, then you might avoid a conviction.
False accusations are common in commercial bribery claims. A person can accuse you of committing bribery in anger, revenge, or malice. In some cases, your employer can falsely accuse you if a deal goes wrong and they do not want to shoulder the loss.
For example, if your employer is the one who required that you hire a certain contractor over another, but turns the pointer around you when the deal goes sour, then you may be a victim of false accusations.
Lack of Intent
The intent is one of the elements of commercial bribery. The prosecution has to prove that you had the intent to commit the crime. However, if you did not perceive the action as an exchange for services, and continued to award the benefit on merit, then you can argue that you did not have the intent to commit a crime.
In some cases, the receiver of the bribe may have coerced the giver, through threats of other forms of duress. If this happens, your lawyer can successfully prove that you did not intend to commit the offense, were it not for the coercion from the other party.
Voluntary intoxication can be used to defend against actions that you committed while drunk. For example, if you were at a party, and after several drinks, you approach someone with an offer in exchange for something else, then you can use intoxication as a defense. Intoxication prevents you from forming the specific intent required in committing commercial bribery.
Penalties for Commercial Bribery
If the court finds you guilty of commercial bribery, you face possible consequences such as jail time and fines. The specific consequences depend on the amount involved in the offense.
For commercial bribery involving less than $1000, the offense is a misdemeanor whose penalties include a maximum term of one year in county jail.
If the bribe is over $1000, the offense is a California wobbler. You face a potential sentence of up to three years in state prison if convicted as a felony.
In addition to incarceration, the court might require you to refund the losses your employer suffered through the offense.
Your lawyer might also request for an alternative sentence, such as probation instead of incarceration. If the judge grants your probation, he or she will impose several conditions that you should meet during the probation.
Bribery is a serious offense in California, which affects the economy and gives some people an unfair competitive edge over the others. If you are charged with commercial bribery, you face potential consequences such as the loss of your job, difficulties in finding employment, fines, and penalties. In addition, you may be required to repay the losses your employer incurs due to your actions. These consequences can affect your life significantly, which is why Leah Legal advises you to hire an attorney as soon as you are arrested. Your attorney will investigate the case, call witnesses, and examine footage or evidence that the prosecution has against you to prepare a strong defense for your case. If you want help with your commercial bribery case in Los Angeles, call us at 818-484-1100 today.