Corporate Criminal Liability

Having a corporation you own or manage be criminally prosecuted can have serious consequences. Not only can your employees and officers be held criminally liable, but a corporation itself can be held criminally liable for wrongdoing. A corporation that is prosecuted for fraud or corruption may be forced to pay millions of dollars in restitution and fines, lose the ability to enter into contracts with the United States government, and face ongoing monitoring of their business dealings.

Corporations can also be held responsible for the criminal acts of employees, even if the actions are not known to the managing board or serve to benefit the company in any way. If the prosecutor can show that supervisors turned a blind eye to criminal actions of those they oversee, they may be also be liable. Similarly, under the responsible corporate officer doctrine, an officer that fails to take measures to curb an employee’s illegal conduct upon discovery of the actions can also be prosecuted, even if the officer did not encourage or participate in the illegal acts.

Whether in the technology, health care, media, energy or financial sector, we have consistently advised corporate clients who confront prosecution for the actions of employees. It is critical for a corporation to understand the consequences of criminal prosecution so that it survives to continue conducting business.