When Businesses Commit Crimes, How Are They Handled and Who is Held Responsible
Provided by HG.org
We are all familiar with the idea of individuals committing crimes and facing the consequences of those actions. But, what happens if a corporation commits a crime? Who is responsible?
Throughout the last decade, more and more criminal cases have been brought against companies and executives. For example, the financial crisis caused public and political sentiment to turn strongly against companies perceived as having caused the problem, such as banks and insurance companies.
Business entities can be guilty of a wide array of crimes that individuals usually could not, such as the Foreign Corrupt Practices Act and the False Claims Act (often employed in cases relating to the off-label promotion of pharmaceuticals). Not only has the Department of Justice investigated these crimes, but also the Federal Drug Administration, the Office of Foreign Assets Control, the Securities and Exchange Commission, and the Federal Trade Commission, as well as numerous state Attorney Generals.
Recent trends in prosecution favor investigations of oil and gas, pharmaceutical, insurance, freight forwarders, and those involved in the mortgage and banking industry. There has also been an uptick in environmental cases stretching back to the beginning of public concern over global warming. Many criminal laws pertaining to corporations make it possible for the government to convict a person even if he has acted without criminal intent, and sentences and fines have skyrocketed as the government continues to go after the deep pockets of corporations on politically charged issues such as these.
These trends are problematic for corporations, since it is virtually impossible to monitor the activities of every employee in large entities. Given that the bad actions of a few could expose those higher up the ladder to liability, even without intent or knowledge, criminal prosecutions in corporate settings are of serious concern. If your company does not have legal counsel, it should strongly consider retaining an attorney to monitor these situations and, in the event the worst happens, to mitigate any resulting harm.
Aside from legal counsel, there are other ways to mitigate the risk of criminal prosecutions, even in higher risk industries. Developing a compliance and ethics program is a good example. This can not only educate your employees on the risks of inappropriate behavior, but may be used as a possible mitigating factor in any subsequent criminal prosecution. Other policies that may help prevent criminal liability or mitigate its harm include establishing mechanisms to detect and prevent criminal conduct, designating compliance officers, designating a government liaison officer in the event of an investigation, and establishing a governance committee responsible for reviewing issues related to compliance and ethics.
Of course, any compliance program is only as good as its implementation. Therefore, these measures should be well-funded and staffed, clearly described and communicated to all employees and staff, routinely and uniformly enforced, and periodically reviewed for effectiveness.
With the proper protocols in place, a corporation should be able to avoid criminal liability all together, or at the very least, will be prepared to respond to any search warrant, grand jury subpoena, request for informal interviews of employees, or investigative demand from a government agency. Nevertheless, should a government investigation of your company commence, it is important to remain calm, contact corporate counsel for assistance, and follow your attorney's recommendations to the letter. Failing to do so may expose you or your company to further criminal liability.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
Business entities can be guilty of a wide array of crimes that individuals usually could not, such as the Foreign Corrupt Practices Act and the False Claims Act (often employed in cases relating to the off-label promotion of pharmaceuticals). Not only has the Department of Justice investigated these crimes, but also the Federal Drug Administration, the Office of Foreign Assets Control, the Securities and Exchange Commission, and the Federal Trade Commission, as well as numerous state Attorney Generals.
Recent trends in prosecution favor investigations of oil and gas, pharmaceutical, insurance, freight forwarders, and those involved in the mortgage and banking industry. There has also been an uptick in environmental cases stretching back to the beginning of public concern over global warming. Many criminal laws pertaining to corporations make it possible for the government to convict a person even if he has acted without criminal intent, and sentences and fines have skyrocketed as the government continues to go after the deep pockets of corporations on politically charged issues such as these.
These trends are problematic for corporations, since it is virtually impossible to monitor the activities of every employee in large entities. Given that the bad actions of a few could expose those higher up the ladder to liability, even without intent or knowledge, criminal prosecutions in corporate settings are of serious concern. If your company does not have legal counsel, it should strongly consider retaining an attorney to monitor these situations and, in the event the worst happens, to mitigate any resulting harm.
Aside from legal counsel, there are other ways to mitigate the risk of criminal prosecutions, even in higher risk industries. Developing a compliance and ethics program is a good example. This can not only educate your employees on the risks of inappropriate behavior, but may be used as a possible mitigating factor in any subsequent criminal prosecution. Other policies that may help prevent criminal liability or mitigate its harm include establishing mechanisms to detect and prevent criminal conduct, designating compliance officers, designating a government liaison officer in the event of an investigation, and establishing a governance committee responsible for reviewing issues related to compliance and ethics.
Of course, any compliance program is only as good as its implementation. Therefore, these measures should be well-funded and staffed, clearly described and communicated to all employees and staff, routinely and uniformly enforced, and periodically reviewed for effectiveness.
With the proper protocols in place, a corporation should be able to avoid criminal liability all together, or at the very least, will be prepared to respond to any search warrant, grand jury subpoena, request for informal interviews of employees, or investigative demand from a government agency. Nevertheless, should a government investigation of your company commence, it is important to remain calm, contact corporate counsel for assistance, and follow your attorney's recommendations to the letter. Failing to do so may expose you or your company to further criminal liability.
Copyright HG.org - Google+
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
