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Corporate and White Collar Crime
South Texas College of Law Houston
Wheeler, Michael E.

1.      Corporate Criminal Liability
I.                    Introduction
a.       MPC 2.07
                                                                          i.      A corporation may be convicted of the commission of an offense if:
1.      The offense is a violation
1.      If defined by statute not in the penal code
2.      And legislative purpose to impose liability on corporation plainly appears
                                                                        ii.      Corp may be convicted of an offense if:
1.      The offense consists of:
                                                                                                                                                  i.      An omission
                                                                                                                                                ii.      To discharge a specific duty of
                                                                                                                                              iii.      Affirmative performance
                                                                                                                                              iv.      Imposed on corporations by law (ex: corp has duty to file income tax)
                                                                      iii.      Corp may convicted of an offense if:
1.      The offense consists of
1.      It’s commission is
                                                                                                                                                  i.      Authorized
                                                                                                                                                ii.      Requested
                                                                                                                                              iii.      Commanded
                                                                                                                                              iv.      Performed
                                                                                                                                                v.      Recklessly tolerated/ mens rea requirement
2.      By:
1.      Board of directors or
2.      High managerial agent
                                                                                                                                                  i.      Acting for the corp
                                                                                                                                                ii.      w/in scope of her office or emp
b.      New York Central v. US
                                                                          i.      Corp punished under crim law. Court rejects argument that it punishes innocent SH
c.       US Dept of justice guidance, federal prosecution of corporations
                                                                          i.      Charging corporation can include charging individuals, charging the corp is not a substitute for charging culpabable individuals
                                                                        ii.      Factors when charging the corporation
1.      Helps prosecutor to determine when, whom, how and even whether to prosecute for violations of crim law
2.      Examples: seriousness of the offense, pervasiveness of the wrongdoing, disclosure by corporation, remedial actions, etc.
d.      US v. CR Bard, Inc
II.                 The Respondeat Superior Rule
A.     Criminal Acts
a.       Only general liability on corp liabitly under RS is that the agent that commits the the crime must be acting with the scope of his authority an on behalf of the corporation.
                                                                                                  i.      d/n mean that express authorization to engange in wrongful conduct is needed
                                                                                                ii.      agent must perform acts “on behalf of” the corp and that the act must be directly related to the performance of the type of duties the ee has general authority to perform
                                                                                              iii.      if conduct initially exceeds the agent’s authority and mgmt fails to control it, it may be inferred that mgmt has ratified the conduct and enlarged ee’s scope of authority
                                                                                              iv.      “on behalf of”
1.      “intent to benefit” the corporation; agent must act with purpose of forwarding corporate business.
2.      Contractors: acts commited by independent contractor, subsidiary, or division may be imputed to the corporation.
b.      Fed courts observe RS of corporate liability. Corp is liable for acts of its agent w/out regard to their status in corp structure and liability attaches w/out a showing managerial complicity. Managements due diligence is not a defense to fed charge but can affect prosecutor’s decision to prosecute and mitigate sentencing.
c.       Commonwealth v. Benefical Finance Co.
                                                                                                  i.      Burden of proof to convict corp

ar members of it are
b.      One who engages in proscribed conduct with the requisite state of mind is resp in the eyes of the law.
II.                 Direct Participants
a.       US v. Wise: corporate officer is subject to prosecution whenever he knowingly participated in effecting the illegal conduct, be he one who authorizes, orders, or helps perpetrate the crime regardless of whether he is acting in a representive capacity.
b.      Accomplice Liability: indirect partciapants such as aiders and abettors are vicariously liable for crimes they assist or encourage. One who aids in planning or authorizes or induces another to commit one is punishable as a principal. Ex. CEO who tells bookkeeper to destroy supboeaned records, etc is punishable as if they had personally commited the crime themselves
III.               Responsible corporate officers
a.       Introduction: are corp officers personally responsible for crimes they fail to prevent if they have responsibility for the biz process that results in the violation
A.     Public welfare offenses: typical public welfare offense found in food and drug act.
B.     Dotterweich: public welfare statutes needed to protect consumer from misbranded products.
b.      US v. Park
A.     FD and cosmetic act enforces accounatability of responsible corporate agents dealing w/ products which may affect health of consumers.
B.     FFDCA imposes highest standard of care and permits conviction of responsible corporate officials who in light of this standard of care have the power to prevent or correct violations of its provisions
c.       US v. Jogensen
A.     Copr officer who is in a “responsible relationship” to an activity within a co that violates provisions of the federal can be held criminally responsible even though officer d/n personally engage in that activity
d.      Fines and indemnification
A.     Under DE law, corp may pay any criminal fine imposed on corp agent if board of directors determines that agent acted in good faith , that his conduct wasn’t contrary to corp’s best interest, and that he had no reason to believe his conduct was unlawful
B.     Corp reqd to ideminfy agent if acquitted, for legal costs including atty fees