evolution
this is not satisfied to hold a corporation criminally liable for its employees
when employees act outside of their scope of authority or not for the benefit of the business
these are the main enforcement strategies to stop wcc
investigations, compliance programs, and independent monitors for compliance
three ways a corp can be criminally liable
1. participate in the crime
2. authorize the crime
3. recklessly tolerate the crime
this phrase reflects social expectations of criminals and who commits wcc
BMCWGDGTP
this makes a corporation liable for its employees acts
The offense is a violation in which a legislative purpose to impose liability on corporations plainly appears and is performed by an agent of the corporation acting in behalf of the corporation within the scope of his office or employment (a law permits respondeat superior)
is it a small step from civil liability to criminal?
criminal liability = stigma and condemnation
civil liability = financial penalty distributed through the company
main principles of federal prosecution
create uniformity when sentencing wcc
no individual or company is too large or profitable not to prosecute
check the compliance is more than just paper policy
federal court test for respondeat superior
whether the applicable statute expressly allows vicarious liability (and thus opens the door to respondeat superior)
these are not white collar crimes
drug related crimes
vice crimes
this person's status makes a corp criminally liable
commission of the offense was authorized, requested, commanded, performed, or recklessly tolerated by the board of directors or by a high managerial agent acting in behalf of the corporation within the scope of his office or employment
this holds corporations criminally liable for its employees' actions
respondeat superior --> an employee acting in the scope of their employment/authority acts for the benefit of the business in a criminal way
these are the most important factors when prosecuting a corporation
did the company voluntarily disclose the crime
did the company cooperate with the investigation + waive atty client privilege
the mens rea of an employee can be transferred when one person with intent violated the law or when the corp disregarded the law
these are a white collar crime
financial advantage crimes --> tax fraud, securities, ponzi schemes
acquiring power through deceit
money laundering
The offense consists of an omission to discharge a specific duty of affirmative performance imposed on corporations by law
these are reasons that it makes sense to prosecute the corporate entity as an entity
corporations are not tangible
if only the employees are liable then there is no incentive to change corporate practices
companies don't fear prison, they fear investigations + fines for noncompliance with the law and policy
biden admin changes to principles of federal prosecution
holistic review of corporate culture
third party monitor in the corporation if they get a deferred or nonprosecution agreement
interest of victims
three ways the govt can prove knowledge
1. one person actually knows
2. willful blindness
3. collective knowledge
this is the cost of wcc to the US economy
$1B to $1Trillion per year
average loss with crypto scams = $500k
this is why its fair for corporations to be prosecuted
because employees acting for the corporation also act for the benefit of the shareholders
shareholders can't only take the benefits of crime and being in a corp, they must also take the risk of liability
the 11 consideration when pursuing prosecuting a corp
nature and seriousness of offense
pervasiveness of wrongdoing in the corp
history of misconduct
cooperation
compliance program at time of offense
timely/voluntary disclosure of wrongdoing
remedial actions
collateral consequences to the public and employees
adequacy of remedies after cooperation
adequacy of prosecuting the responsible individuals
interest of victims
this is why due diligence is a good standard for corporations to be held to
puts the blame directly on the higher ups to invest in good employees and properly enforced compliance programs
Disincentivizes higher ups from pressuring employees into committing crimes
three fundamental issues with prosecuting wcc
1. overcriminalization - discourages risk due to vaguely written laws to ensnare more people
2. civil sanctions vs criminal prosecution - fines aren't effective but can't imprison a corporation
3. punished less severely than street crimes - they feel less relatable and less offensive