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Corporate Crimes: Charging Companies with Criminal Activity

Posted on in Criminal Defense

Wisconsin criminal defense attorney, Wisconsin defense lawyer, criminal rightsAdvances in technology have allowed modern corporations to develop a size and reach that are historically unprecedented. This poses problems because corporations are made up of people, and consequently are just as capable as ordinary people are of committing crimes, and charging corporate crimes presents unique considerations. Certainly, some of those can be avoided by charging the managers and directors of companies with crimes, but it is also possible to charge a corporation with a crime, if the prosecution can prove a few extra things. Of course, even when corporations are convicted of a crime, punishing them still presents particular problems.

Unique Considerations

Charging a corporation with a crime presents unique issues because companies are legal fictions. They are just legal devices that allow groups of people to coordinate responsibilities and contract together. The only way that they can act through the real world is through their agents, like their directors and employees.

To see why this is a problem, consider one of the crimes surrounding the Enron scandal, obstruction of justice. Arthur Andersen, the accounting firm that Enron hired, was charged with obstruction of justice for allegedly persuading Enron to destroy documents with the intent to prevent them from being used as evidence. Determining the intent of a corporation is complex. Arthur Andersen existed only through its agents, so it is difficult to say when the company as a whole has an intent to do something. Instead, the law allows corporations to be charged with a crime based on the actions of their agents, but only in certain circumstances. In order to charge a corporation with a crime, the prosecution must prove three things:

  1. The person must be acting within the scope of their employment;
  2. The person must be trying to benefit the corporation with their act; and
  3. The person's intent must reflect the intent of the corporation as a whole.

The Problem of Punishment

The unique nature of corporations does not stop causing problems once the conviction occurs either. It is difficult to punish companies because they are immune from one of the criminal law's most common sanctions. The government cannot throw a company in jail. This means that corporate crimes are punished most often by heavy fines, with the jail time being reserved for individual agents who are charged with crimes in their individual capacities. Companies may also end up on corporate probation, which involves having an independent party monitor the company to ensure that it is staying compliant with the law.

Corporate crime is a unique situation, and legal proceedings surrounding it present a variety of special considerations. If your company has recently been charged with a crime, and you would like more information about what that means for the future, contact an experienced Milwaukee criminal defense attorney today.
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