My practice specializes in defending white-collar crime and business crime. I often hear the terms “white-collar crime” and “corporate crime” being confused because the type of criminal activity most common in each like embezzlement, fraud, money laundering or bribery are the same kind of crime.
The big difference is 1) who benefits from the crime and 2) who goes to jail.
Neither “white-collar crime” nor “corporate crime” has a universal legal definition. Each is a term generally used to categorize crimes that are non-violent, committed for financial gain, and is usually committed in a business setting or practice. They may also be referred to as ” financial crimes.”
An individual, or a group of individuals with the intention of benefitting themselves, carry out white-collar crime. Their gain is often money, but it can also be in the form of physical goods, services, or financial instruments other than money like stocks, insurance or real estate. A person convicted of white-collar crime can be sent to prison and may be ordered to pay substantial fines and possibly restitution to the victim of the crime.
In California corporations are considered a “person” and so, are capable of committing and being punished for crimes. People commit “corporate crimes” of course, but they are acting on behalf of the business with the intent to benefit the business or its owners or shareholders, rather than themselves directly. Corporations can be held criminally liable for the crimes of its directors, employees, or someone else authorized to act on behalf of the company.
A corporation obviously cannot be put in jail, but the business can be fined if found guilty. Depending on the crime and circumstances the fine can be quite large, since it is intended to be a punishment for the business. The individuals in the company who are responsible for committing the “corporate crime” can simultaneously be charged individually with a similar or related “white-collar crime.”
As an example of the difference, let’s say an employee or owner of a company steals money from their business and uses that money for personal benefits. They commit the white -collar crime of embezzlement, and if convicted can be jailed and / or fined.
On the other hand, if that company’s employees are billing health insurance companies for services or procedures not actually done for patients, the corporation as a whole may be guilty of fraud. The company benefits by receiving the insurance money as revenue for the business, but an individual employee submitting the billing is not receiving the money. If the corporation is found guilty, it will be fined. However, unless the individual employees or managers who are directing those employees are also individually charged, no one goes to jail.
Some corporate crimes can rise to the level of “corporate violence” in which people, society, or the environment is significantly harmed because of the actions – or inactions – of a corporation. These types of crimes can be intentional on the part of the company or unintentional. These crimes can include things like creating unsafe working conditions, selling contaminated products or causing illegal environmental damage.
By way of an example, a chicken processing plant a manager locked fire escape doors to try and prevent employee theft. This created an unsafe working condition and workers died in a fire because they couldn’t open fire escape doors. The recent Deepwater Horizon oilrig explosion that killed 11 people and cause millions of gallons of oil to spill into the Gulf of Mexico included corporate criminal charges of 11 counts of manslaughter, two misdemeanor charges and one felony charge. The company paid fines of tens of billions of dollars.
Corporate criminal penalties often include hefty fines but don’t normally specifically provide for restitution to victims. Conviction of a corporation does however open the door to possible additional civil litigation against the company.
Jeremy N. Goldman has 20 years of experience in Orange County criminal defense. He is certified as a specialist in criminal law by the State Bar of California Board of Legal Specialization. Contact the Law Offices of Jeremy N. Goldman for a no-cost consultation and to learn the legal options available to you in any criminal matter. Call 949-387-6670 or contact us online here.
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