Part 2- Crimes and Torts, Chapter 5: Criminal Law and Procedure, Doc 9

This section details various aspects of U.S. corporate criminal law, including sentencing guidelines, enforcement tools, major offenses, and ethical challenges: Corporate Sentencing Guidelines and Deferred Prosecution Agreements (DPAs) • • Corporate Sentencing Guidelines: These guidelines, made advisory by the Supreme Court’s Booker decision, can impose high fines on corporations, up to $300 million for certain offenses. Penalties are determined by a corporation’s "culpability score," which can increase if high-ranking officers were involved or if the corporation has a history of similar offenses. Conversely, the presence of a compliance program can mitigate penalties by reducing this score, creating an incentive for corporations to proactively prevent violations. Deferred Prosecution Agreements (DPAs): DPAs allow corporations to avoid formal charges if they agree to pay fines and submit to external monitoring. Proponents believe DPAs encourage ethical behavior without the harsh repercussions of a criminal conviction. Critics argue that DPAs effectively offer corporations a “get-out-of-jail-almost-free” option, weakening the deterrent effect of criminal law. Alternative and Innovative Penalties • • Alternative Penalties for White-Collar Crimes: Suggestions for penalizing white-collar criminals include public service or professional license suspension instead of imprisonment or fines. These options aim to provide meaningful but less severe consequences, which may make judges and juries more likely to enforce them. Corporate Probation: Courts could impose corporate probation, requiring self-assessments, structural changes, or enhanced compliance monitoring as conditions. This approach may address bureaucratic failures directly and could prevent future violations more effectively than financial penalties. Key White-Collar Crimes and Regulatory Offenses • • • Fraud: White-collar crime often involves fraud, including securities fraud, mail and wire fraud, and fraud in bankruptcy proceedings. Such crimes typically involve obtaining property or money through deceitful practices. Sarbanes–Oxley Act (SOX): Enacted after high-profile financial scandals, SOX introduced stricter rules for corporate governance and accountability. It established the Public Company Accounting Oversight Board, imposed severe penalties for document destruction, extended statute limitations for securities fraud, and increased whistleblower protections. Bribery and Foreign Corrupt Practices Act (FCPA): FCPA makes it illegal to bribe foreign government officials for business advantages, with significant fines and potential prison time for violations. Other anti-bribery agreements, such as the OECD Convention and Inter-American Convention Against Corruption, further bolster global anti-bribery efforts. The Racketeer Influenced and Corrupt Organizations Act (RICO) • • Scope and Application: Originally targeting organized crime, RICO also applies broadly to business fraud, with offenses including mail and wire fraud, securities fraud, and bribery. A RICO violation requires proof of a "pattern of racketeering activity" involving at least two related acts within a 10-year period. RICO allows for substantial fines, imprisonment, and asset forfeiture upon conviction, and pretrial asset freezes to prevent hiding assets. Case Example—Boyle v. United States: In Boyle, the Supreme Court clarified the concept of a RICO “enterprise.” An informal association, such as a group organized to commit multiple thefts, can constitute a RICO enterprise even if it lacks a hierarchical structure, as long as it acts as a continuing unit with a common purpose. Ethical Implications and Whistleblowing • • Ethical Dilemmas: Corporate employees may face ethical decisions when aware of unlawful practices. Questions arise about their duty to report such behaviors, potential conflicts between loyalty to the employer and legal obligations, and the personal risks of whistleblowing. Whistleblower Protections: The Sarbanes–Oxley Act provides legal protections for employees who report corporate fraud. Such protections aim to empower employees to come forward without fear of retaliation. Overall, the chapter highlights the complexities of regulating corporate crime, balancing deterrence and punishment with ethical and legal incentives for compliance.