Corporations are a legal person which, like individuals, may be prosecuted for crimes. However, individuals within that corporation may have committed crimes such as money laundering or fraud that pose criminal liability to the business because corporations act only through their employees and officers. Corporate governance and structure may nonetheless shield or insulate the individuals liable for these criminal acts.
In September, the U.S. Department of Justice issued a memorandum announcing that it would hold individuals liable for corporate crimes. It also released the six steps that it would utilize to investigate and prosecute crimes, and to pursue civil enforcement actions.
First, corporations must provide all relevant facts regarding the individuals responsible for the misconduct before it could qualify for any cooperation credit. Criminal and civil investigations undertaken by the DOJ should also focus on individuals commencing with the beginning of the investigation. DOJ investigations of individuals have to be proactive.
Third, criminal and civil attorneys involved in corporate investigations should maintain routine communication with each other. The DOJ will not release culpable individuals from criminal or civil liability when resolving a case with a corporation unless there are extraordinary circumstances or approved departmental policy.
Fifth, DOJ attorneys should not resolve matters with a corporation unless there is a clear plan to resolve related individual cases. Denial of an individual resolution has to be memorialized in writing.
Finally, civil DOJ attorneys should focus consistently on individuals and the company and evaluate whether to bring a lawsuit against an individual based on considerations other than the individual's ability to pay. Other factors include whether the individual's conduct was serious, whether the conduct is actionable, whether there is sufficient evidence to obtain and sustain a civil judgment and whether pursuing the case reflects an important federal interest.
A criminal investigation of a corporation or business for a white collar crime or other corporate crime may involve numerous individuals who may have merely been at the wrong place at the wrong time or were exposed to liability because of their duties. Legal assistance should be sought promptly to help assure that an individual's rights are protected.
Source: U.S. Department of Justice, “Individual accountability for corporate wrongdoing,” by Deputy Atttorney General Sally Quillian Yates, Accessed Nov. 2, 2015