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Individual Federal Criminal Charges for Corporate Acts

Posted by Dmitry Gorin | Feb 26, 2021 | 0 Comments

Most federal corporate fraud cases are a highly complex area of law involving many different statutes. Just an allegation of corporate and business fraud can be life-changing. It can destroy a career that took a lifetime to achieve.

Individual Federal Criminal Charges for Corporate Acts

In many cases, the primary key to a favorable outcome will depend on your attorney's ability to negotiate and reduce the amount of loss.

It's bad enough to face criminal charges for one's own alleged acts. But to face individual charges for what a corporation does seems an especially heavy burden.

Federal prosecutors can and do charge individuals for corporate misbehavior.

White collar crime within a corporate profession by otherwise respectable people of means includes a wide range of federal crimes, such as:

White collar crime charges can also include individual criminal responsibility for corporate criminal acts.

Whether you are just under suspicion of fraud, received a grand jury subpoena, a search warrant was served, or you have been already indicted, you need legal experienced representation to protect your constitutional rights.

Our federal criminal defense lawyers are providing readers an on overview below.

Individual Corporate Fraud Charges

The best example of individual charges for corporate misbehavior is in the area of corporate fraud.

Both the state and federal governments punish corporations for misrepresenting facts for unjust gain, including charging the corporations and their officers and managers with fraud crimes.

Federal law, for instance, includes these corporate fraud crimes:

  • 18 U.S.C. 1001 – general federal false statements statute,
  • 18 U.S.C. 1031 – major fraud schemes against the United States,
  • 18 U.S.C. 1341 – mail fraud accomplished by using Postal Service, and
  • 18 U.S.C. 1343 – wire fraud, accomplished by electronic means.

Corporate frauds are typically sophisticated. Government agents usually discover corporate fraud only with audits using sophisticated measurements.

Internal corporate audits usually discover and correct anomalies, including potential fraud first, before tax returns and reports reach the government.

But when they don't, the fraud might come to the attention of government officials, the FBI, Securities and Exchange Commission, IRS, and other federal agencies.

Further, even state agencies all devote substantial resources to charging individual corporate leaders with those crimes, punishments for which can range from five to twenty-five years of imprisonment.

Common Types of Corporate Fraud Cases

Corporate fraud is a very broad term covering a wide range of illegal activity, such as:

  • misrepresenting the value of the business,
  • concealing debts or assets,
  • submitting false tax returns,
  • creating fraudulent sales and receipts
  • “cooking the books” and other false bookkeeping techniques,
  • embezzlement of corporate funds,
  • stealing business trade secrets or patents,
  • using business funds for personal gain,
  • fraudulent transfer of corporate assets,
  • misusing retirement or pension funds.

The Unfairness of Individual Charges for Corporate Crime

The defense of individual charges for corporate crimes can rely in part on the unfairness of those charges.

A law scholar studying patterns of individual charges for corporate crime reveals that prosecutors pursuing individual accountability for corporate crime tend to focus on lower-level managers rather than the executives who establish corporate culture and direct corporate activities.

The problem is that charging lower-level managers holds them accountable for carrying out corporate directives they did not issue and the full picture of which they may not know.

The same scholar points out that the laws of individual responsibility for corporate crime tend to be vague and overbroad. Those laws hold individuals responsible for conduct that the laws do not clearly define.

Managers charged with corporate crime often do not know what they or the corporation did that allegedly violated the law.

The laws prohibit some acts that should clearly be lawful while permitting other acts that should clearly not be lawful.

Better, the scholar concludes, to hold the corporation civilly liable for its wrongs than to charge its mystified lower-level managers criminally.

Defending Against Individual Charges for Corporate Crime

The individual liability for corporate crime requires several practical defense strategies from an experienced federal criminal attorney.

Perhaps the criminal charges are pursued against the wrong defendant, who did not authorize or direct the alleged misconduct.

Defending Against Individual Charges for Corporate Crime

Perhaps the individual defendant, not having the full picture of the alleged crime, lacked the requisite knowledge and intent to charge and convict on the crime.

Maybe we can show the defendant was acting is good faith for a legitimate purpose, or they were acting under duress.

We might be able to show that the statute is unconstitutionally vague and overbroad as applied.

Individual charges for corporate crime create other options for a favorable resolution.

Prosecuting an individual for corporate crime can create an option of the corporation pleading guilty or paying fines while the prosecution dismisses the charge against the individual defendant.

Better, in many cases, that the corporation accepts blame and pays any penalty than an individual goes to jail for the crime.

We might be able to negotiate with the federal prosecutor to make a favorable plea bargain to avoid jail time.

Federal Criminal Defense for Corporate Fraud Charges

Individual charges for corporate crime can carry severe penalties, including substantial federal prison time and restitution.

Each type of fraud carries a separate maximum sentence and punishment, which are specified in the federal statute.

Federal Criminal Defense for Corporate Fraud Charges

Your defense to federal corporate fraud charges will depend on the specific facts of your case. An effective strategy will be built after a thorough review of all the documentation.

If you are facing corporate fraud charges, then you need a defense team that knows how to challenge, undermine, and defeat individual charges.

We have a history of success proving our ability to defend federal criminal charges.

Eisner Gorin LLP is a nationally recognized criminal defense law firm serving clients in California and throughout the United States.

Our office is located at 1999 Avenue of the Stars, 11th Fl., Los Angeles, CA 90067 and also at 14401 Sylvan St #112 Van Nuys, CA 91401

If you have been notified you are under a federal investigation or an audit for corporate fraud, contact our office to review the details at (877) 781-1570.

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About the Author

Dmitry Gorin

Dmitry Gorin is a licensed attorney, who has been involved in criminal trial work and pretrial litigation since 1994. Before becoming partner in Eisner Gorin LLP, Mr. Gorin was a Senior Deputy District Attorney in Los Angeles Courts for more than ten years. As a criminal tri...


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