3 Things a Prosecutor Must Prove To Convict Your Company

Many executives are surprised to learn the breadth of corporate criminal liability.  In general, a company can be convicted based on any criminal act carried out by an employee or agent, within the scope of her authority, for the benefit of the company.

• A criminal act of an employee or agent means everyone – from the boardroom to the mailroom. The act need not be performed by, authorized by, or done with the knowledge of a senior manager.
• Within the scope of employee’s or agent’s authority means the individual was exercising the duties and authority conferred by her position. It does not mean the company must have authorized the specific criminal acts.  Indeed, the individual often will have acted contrary to express admonitions to comply with the law.
• For the benefit of the company means the employee’s or agent’s acts were intended to benefit the company in some way. But the benefit to the company need not be the sole motivation and no benefit need actually be realized.

This broad standard gives prosecutors vast discretion in deciding whether to prosecute a company as opposed to individual wrongdoers.  Skilled white collar defense lawyers, working a strategy developed early in an investigation, may persuade prosecutors to avoid prosecution by allowing the company to enter into deferred or non-prosecution agreements contingent upon extensive cooperation, payment of a fine, and often substantial remedial measures.

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