NY Criminal Defense: Criminal Liability of an Individual for Corporate Conduct

It is fairly routine to read or hear about a NY criminal defense attorney representing an individual accused of a particular White Collar crime due to the conduct of the corporation he or she works for. It is not merely the United States Attorney’s Office who prosecutes these crimes, but state and local offices such as the Manhattan District Attorney’s Office that aggressively pursue these cases and crimes ranging from Grand Larceny and Falsifying Business Records to Scheme to Defraud and Money Laundering. The power of New York State and local prosecutors to charge individuals with crimes based on corporate conduct is found in Penal Law 20.25. According to this section, “[a] person is criminally liable for conduct constituting an offense which he performs or causes to be performed in the name of or in behalf of a corporation to the same extent as if such conduct were performed in his own name of behalf.”

Decisions rendered by the Court of Appeals, New York’s highest court, further fortifies the ability of state and local prosecutors. In People v. Sakow, 45 N.Y.2d 131 (1978), the Court of Appeals found that a “defendant could properly be held criminally liable for violation of city administrative code based on his willful neglect and refusal to comply with violation orders issued by fire department where there was adequate proof from which it could be inferred that defendant was the active manager and dominant controlling force in corporations, in each of which he was principal and, at times, sole shareholder, and for which he acted in the absence of minutes and without a meeting of the board of directors.”

This “piercing of the corporate veil” is far from atypical. In fact, a Queens County Supreme Court Justice held that Penal Law Section 20.25 “eliminates the possibility that a culpable defendant might evade criminal responsibility simply because he was acting in a corporate capacity or in the interests of a corporation. The corporate veil can be pierced, if appropriate, in criminal as well as civil cases. The culpable actor can no longer hide behind a corporate curtain.” People v. Aquarian Age 2000 Inc., 85 Misc.2d 504 (Queens County 1976).

Obviously, both history and the Penal Law tell us that federal and state prosecutors have and will continue to prosecute individuals for their activities in corporate settings as they relate to criminal activity. Therefore, it is imperative to protect yourself from getting into legal “hot water,” limit your exposure and preserve your career and freedom if you have been arrested or you are the target of an investigation. As former Manhattan prosecutors who supervised prosecutions into multi-million dollar fraud schemes and criminal defense attorneys who have represented clients in alleged multi-million dollar thefts, Saland Law PC stands ready to zealously fight on your behalf to preserve your freedom, rights, livelihood and integrity.

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