by Marvina Randle

Created on: March 09, 2009

Black's Law Dictionary defines "corporate crime" as "any criminal offense committed by and hence chargeable to a corporation because of activities of its officers or employees." If you examine the wording of this definition it becomes clear that a corporation can only be fined for a criminal act as the corporation itself cannot be placed in jail.

In most cases the only remedy is a fine for the corporation by some regulatory board. In some cases the punishment may be in the form of a lawsuit by a citizen or stockholder hoping for a settlement or judgment against the corporation for the questionable behavior of one of its officers or employees or the corporate policy that caused the alleged harm.

For an individual to be held accountable for crimes where the punishment could be jail time he or she must have acted outside the legal boundaries set by the corporation and the act must intend to illegally benefit a certain party causing foreseeable injury to another. These would include cases of embezzlement and fraud as well as product liability cases where corporations knowingly or negligently produce products or the manufacturing of those products cause harm to others.

However, after the headlines of late, the majority of American citizens today would define a "corporate criminal" as "any executive who was paid millions to send their company into financial ruin so the company would qualify for a federal bailout."

Each day brings news of huge bonuses paid to executives who now want the average tax-paying citizen to pay for their bad business decisions. As our nation falls further into financial ruin they have walked away with tens and sometimes hundreds of millions of dollars, but are they "criminals" under US law?

To answer that question one must re-examine how a corporation works; what responsibility the corporation has to the shareholders; and whether any federal and state regulations were violated at the time of the alleged corporate criminal act, and the benefit received by the individual(s) involved in the criminal act.

A corporation is created to limit an individual's liability in a business adventure to the assets of the business, thereby protecting other business or personal assets of potential investors. Usually a corporation is created by filing Articles of Incorporation with the Secretary of State of the state in which the corporation seeks to incorporate and do business in. This application to do business in that state usually includes the corporate name,

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