Criminal Law Fall Semester 2001

(Take-home - 4 hours working time)

This is an open book, take-home exam. There is one question. Read the facts carefully. If you need additional facts, state what they are and why. Do not change the facts.

You may work on this exam for up to four consecutive hours once you have looked at it. It is due on Friday, October 26, 2001 by 11:00 a.m. You must hand in the exam to John Goodall in the Holmes Suite by the deadline. In answering this question, you may consult any written materials (other than computerized or library research materials) you choose. Once you have picked up the exam, however, you are not to discuss criminal law in any way with any other person until one hour after you have handed in the completed test.

The rules governing the exam are contained on the attached rules sheet.

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Paul Prosse is the first assistant prosecutor in Mokans City. Paul had not seen any prosecutions under the state’s two-year old statutes relating to charitable solicitations, but suddenly this week, the first two cases came across his desk. Given that, because the statutes are relatively new, they have not yet been construed, Paul has his work cut out for him.

It seems that the legislature adopted a comprehensive statutory scheme to regulate and control charitable solicitations after several reports by investigative journalists demonstrating widespread abuses in the solicitation of charitable gifts. Most of these abuses occurred when phony charities were created that sounded like legitimate organizations or when professional solicitors were retained by bona fide charities to conduct their solicitations. These professional solicitors often used strong-arm tactics and misleading pitches while retaining more than 50% of the funds they obtained for the organizations that retained them. The legislature attempted to deal with these abuses while preserving flexibility for charitable groups to use solicitors rather than relying on their own staffs or volunteers. This state has always had fairly strict laws relating to the conduct of lotteries, raffles and other games of chance by charitable organizations, and the new statutes added new rules in the solicitation area. Part of the new rules involved a licensing and registration scheme which helps to identify those paid to solicit on behalf of organizations and generates funds for the state which can be used for monitoring the activities of professional fundraisers. It appears that, since the new statutes were enacted, many of the most serious abuses have been reduced.

The first case Paul had to deal with involved a potential prosecution involving charitable gaming. Oliver Oprator, a properly licensed operator of charitable games, had run games of chance for many organizations for many years. He had always appeared to run honest games and there had never been any allegations of cheating or other problems with his raffles or Las Vegas Nights. But now, Paul believes that Oliver has crossed the line into illegality.

It appears that Oliver had operated a variety of games for the Boys and Girls Clubs of Mokans City (the Clubs) for a number of years. This included raffles and Las Vegas Night parties. These games raised quite a bit of money for the Clubs, but two years ago, under pressure from supporters who felt that participation in gambling activities was inconsistent with the group’s image, the Clubs stopped using these techniques. Oliver had been quite disappointed at this development when it occurred, since the Clubs had been a good source of income for him. While he only charged reasonable fees and generally took less than 20% of the funds raised as his fee, this was still a regular and significant part of his income. His earnings were substantially reduced in the first year after the Clubs discontinued their gambling activities, but he has bounced back somewhat in the last year.

A few weeks ago, somewhat "out of the blue," Oliver received a call from Carl Chare, the person he had dealt with at the Clubs for many years. Carl had been Vice President and Fund Raising Committee Chair for the Clubs for all of the time that Oliver worked with that group. Carl loved being involved in fund-raising and was very committed to the Clubs. He was very disappointed when the Board voted to discontinue its activities with Oliver. He regretted the loss of the funds and felt that people enjoyed the raffles and game nights and didn’t really consider them to be gambling. Unfortunately for himself and Oliver, a majority of the Board disagreed.

When Carl called, he asked Oliver whether he was still involved in running games of chance for charitable groups. Oliver responded that he was. Carl stated that his group needed to make some quick money because charitable gifts had been down significantly since the tragic events in the country a few months before. Carl felt, and his organization agreed, that money was needed and that people were again ready to have some fun. Carl viewed this as the ideal time to get back into these methods of fundraising, and he hoped that people would get back into the swing of giving to the organization. He told Oliver he wanted the same kind of program Oliver had done for him in the past.

In the course of the conversation, Oliver expressed some surprise that Carl was asking to get involved with him again. He said to Carl, "I thought you didn’t want to be associated with gambling activities. I’m frankly surprised to hear from you." Carl responded, "That was then, this is now. Things have changed; this group is so much more liberal. They’re not bogged down with all that morality crap related to gambling. And you know that was never a personal issue of mine." Oliver responded, "But I thought there was a real concern about not wanting gambling and games of chance associated with the kids." Carl somewhat cryptically responded, "Well, this doesn’t really involve kids." This struck Oliver as odd, since the Clubs provide services to young people between the ages of 5 and 16 (which he would call kids), but just as he was about to ask Carl what he meant, the other phone line lit up and he needed to take the call. He told Carl he would check on open dates and get back to him later that day.

Oliver checked the dates and called Carl but was initially unable to get hold of him. The number he had been given to contact Carl was different from the number he used to have, but Oliver was aware that some of the downtown exchanges had been changed. When Oliver reached the number, he noticed that Carl had a funny answering machine message that was different from what Oliver remembered, but he really didn’t think much about it given changes in the world over the past two years. Oliver had a hard time getting through to Carl, so he sent him a contract for Carl to return. The contract, which was made out in the name of the Boys and Girls Club and had a place for the signatures of the president of the organization and Carl, set out the details of the arrangements for both the Las Vegas Night Oliver would conduct as well as for several raffles they were planning. Oliver then began lining up what he needed for Carl’s game night and began working on raffle ideas.

As the date of the event came closer, Oliver began to be concerned that he had not yet received the signed contract back. Carl told him it had taken the contract a long time to get to him, perhaps because of a problem with his address. But Oliver wasn’t really worried because he reminded himself that Carl was not the best client when it came to paperwork, but he knew from his past experience that Carl always had what they needed when it really mattered. Carl told Oliver that the response to his Las Vegas Night invitations had been extremely good and that they expected several hundred people to turn out for the event. Oliver remarked to Carl that the event would be "just like old times," to which Carl responded, "Well, not quite." When Oliver asked what he meant, Carl just responded "Things aren’t quite the same - these folks are a little different than those I used to deal with." Oliver found this remark to be somewhat curious but he assumed Carl meant that the current Board had somewhat different views. Oliver was deluged with work in getting ready for the Las Vegas Night and for other events and didn’t really have time to think much more about it.

Two days before the event, Oliver called Carl and told him he had the set-up ready for Carl to see and that he needed the signed contract in order to actually host the event. They arranged to meet later that night. When Carl arrived at Oliver’s facility, he looked around the room and told Oliver everything looked great. When he saw the old Boys and Girls Club sign that Oliver had put up, he chuckled and made a comment about nostalgia and "old times’ sake" that Oliver really didn’t understand, but rather than pursue the remark, Oliver asked for the contract. Carl responded that he had forgotten to bring it (or, in fact, to have looked at it), but since the terms were the same as they had done in the past he was sure it would be OK and the President would sign. On the afternoon before the event, which was scheduled to start at 8:00 p.m., Carl showed up at Oliver’s facility with the signed contract, on which he had crossed out the name Boys and Girls Club and substituted the name of the organization he now worked for. As he handed the contract to Oliver, Carl told him he had made some minor revisions. Oliver noticed some scrawled-out material and asked if any of the changes were significant. When Carl indicated that they were not, Oliver decided not to spend any time looking at the contract since he needed the time to get ready for the event.

About two hours before the event, Oliver finally checked the contract to make sure he had complied with all the terms. It was at that point that he saw that the name of the Boys and Girls Club had been scratched out and that instead a group he’d never heard of was listed. He tried to call Carl to determine what was going on, but he couldn’t reach him. About an hour before the event, Carl arrived at Oliver’s facility and Oliver confronted him, asking about the name change. Carl responded that he thought Oliver understood that he had left the Boys and Girls Club and was now representing America’s Heartland, a relatively new organization. He expressed surprise that Oliver did not know of the change, which had been the subject of two stories in the society and metropolitan sections of the local paper. Oliver was upset at this turn of events. He realized he needed to do a new banner and to get it done quickly. Before he did that, he turned to Carl and said, "You are a non-profit, aren’t you?," to which Carl truthfully replied "Yes." Carl meant they were incorporated as a non-profit; Oliver intended for his question to be taken as asking if they were non-profit in the sense that they were exempt from taxes under § 501 of the Internal Revenue Code. As it turns out, they are incorporated as a nonprofit but are not exempt from federal tax under § 501.

By the time this conversation was winding down, guests were beginning to arrive. This was Oliver’s favorite part and he stopped thinking about who the organization was and its non-profit status and began running the games. After he had done so for about an hour, several individuals who appeared to be intoxicated got involved in a fairly serious scuffle. One of the attendees at the Las Vegas Night called the police, who came to the scene. After sorting out the fight, they turned to Oliver and asked to see his paperwork on the event. When they reviewed the contract and the law, they concluded (rightly) that the organization on whose behalf Oliver was running the event was not an organization exempt from taxes under § 501. Thus, it was inappropriate for Oliver to have operated a game night on their behalf.

The second case Paul is working on involves Sam Solicita. For several years, Sam had worked for the United Way of Mokans City (UWMC) as a full-time executive. Because his primary job at UWMC was not fundraising, and because UWMC was a 501(c)(3) organization, Sam was able to engage in solicitations for UWMC without having to be registered as a professional solicitor. After more than 20 years with the organization, Sam retired from full-time employment, but after six months of retirement, he discovered that it was not for him. He sought out something to do and was hired by DreamVision on a contract basis to do fundraising for that group. Sam was not actually employed or salaried by DreamVision; rather, his contract called for him to receive 20% of any funds he raised over $100,000 for the calendar year.

Sam had a creative new idea for a fundraising program for DreamVision and the idea immediately "took off." The fundraising program was wildly successful and, based on Sam’s solicitations, raised over $500,000 in the first six months, including numerous individual contributions of $5,000 or more. Sam’s approach was written up in several philanthropy magazines and caught the attention of the local and national press. Unfortunately, it also caught Paul’s attention, since he noticed that Sam was not registered as a professional solicitor. Paul correctly determined that, since Sam was not an employee of DreamVision primarily engaged in non-fundraising activity, and because he was paid a percentage of what he raised, he was required by law to be so registered. Sam, who had spent so many years as an employee of UWMC, was simply not aware that, in his changed status, he was required to be registered as a professional solicitor.

Discuss the potential criminal liability of Oliver under the following statute only in ARKANSA, a Common Law jurisdiction:

Ark. G.L. § 265.615

Whoever wilfully violates any regulation governing charitable solicitations found in chapter 264 of the Revised Statutes of Arkansa; or who knowingly operates a lottery, raffle, Las Vegas Night or other game of chance without a valid license or on behalf of an organization not qualified under § 501 of the Internal Revenue Code shall be guilty of a Class C misdemeanor.

Note: The regulations found in chapter 264 relate to the content of written solicitations. There is no allegation that anyone violated any such provision.

Discuss the potential criminal liability of Sam under the following statute only in ARKANSA, a Common Law jurisdiction:

Ark. G.L. § 265.200

Whoever, on behalf of any organization, solicits any charitable contribution over the amount of $1000 without being duly registered as a professional solicitor or otherwise being exempt from registration under subsections 1-5 of section 400 of chapter 264 shall be guilty of a Class D misdemeanor.

Note: There is no allegation that Sam is exempt under any of these subsections, which involve employee or volunteer solicitations.

Discuss the potential criminal liability of Oliver under the following statute only in MOKANS, a Model Penal Code jurisdiction:

Mok. G.L. § 310.400

Whoever knowingly violates any regulation governing charitable solicitations found in chapters 1310-1315 of the Mokans Administrative Regulations; or who operates a lottery, raffle, Las Vegas Night or other game of chance without a valid license; or operates such games on behalf of an organization not qualified under § 501 of the Internal Revenue Code, or distributes prizes of a value in excess of $3000 at any such event, or permits persons under the age of 21 to attend such events, shall be guilty of a Class D misdemeanor.

Note: There is no allegation that Oliver violated state administrative regulations, gave out too much prize money or allowed minors into his facility.

END OF EXAMINATION