A. General Principle: Prosecution of a corporation is not a substitute for the prosecution of criminally culpable individuals within or outside the corporation. Because a corporation can act only through individuals, holding individual wrongdoers criminally liable may provide the strongest deterrent against future corporate wrongdoing. Provable individual criminal charges should be pursued, particularly if they implicate high-level corporate officers, even in the face of an offer of a corporate guilty plea or some other disposition of the charges against the corporation, including a deferred prosecution or non-prosecution agreement, or a civil resolution. In other words, regardless of the ultimate corporate disposition, a separate evaluation must be made with respect to potentially liable individuals.

Absent extraordinary circumstances or approved departmental policy such as the Antitrust Division’s Corporate Leniency Policy, no corporate resolution should provide protection from criminal liability for any individuals. The United States generally should not release individuals from criminal liability based on corporate settlement releases. Any such release of individuals from criminal liability due to extraordinary circumstances must be personally approved in writing by the relevant Assistant Attorney General or United States Attorney.

B. Comment: It is important early in the corporate investigation to identify the responsible individuals and determine the nature and extent of their misconduct. Prosecutors should not allow delays in the corporate investigation to undermine the Department’s ability to pursue potentially culpable individuals. Every effort should be made to resolve a corporate matter within the statutorily allotted time, and tolling agreements should be the rare exception. In situations where it is anticipated that a tolling agreement is unavoidable, all efforts should be made either to prosecute culpable individuals before the limitations period expires or to preserve the ability to charge individuals by tolling the limitations period by agreement or court order.

If an investigation of individual misconduct has not concluded by the time authorization is sought to resolve the case against the corporation, or prosecution against individuals is not viable for other reasons, prosecutors must submit to the supervising United States Attorney or Assistant Attorney General a prosecution or resolution authorization memorandum that addresses the potential liability of individuals, a description of the current status of the investigation regarding their conduct and the investigative work that remains to be done, and, whenever warranted, an investigative plan to bring the matter to resolution expeditiously and prior to the end of any statute of limitations period. In such cases, prosecutors must obtain the approval of the supervising United States Attorney or Assistant Attorney General of both the corporate resolution and the memorandum addressing the investigation of responsible individuals and why it is not resolving before or concurrently with the corporate case.

At times, Department criminal investigations take place in parallel to criminal investigations in foreign jurisdictions into the same or related conduct. In such situations, the Department may learn that a foreign government intends to bring criminal charges against an individual whom the Department is also investigating. Before declining to commence a prosecution in the United States on that basis, prosecutors must make a case-specific determination as to whether there is a significant likelihood that the individual will be subject to effective prosecution in the other jurisdiction. In making that determination, prosecutors should consider, inter alia: (1) the strength of the other jurisdiction’s interest in the prosecution; (2) the other jurisdiction’s ability and willingness to prosecute effectively; and (3) the probable sentence and other consequences if the individual is convicted in the other jurisdiction. When appropriate, Department prosecutors may wait to initiate a federal prosecution in order to better understand the scope and effectiveness of a prosecution in another jurisdiction. However, prosecutors should not delay commencing federal prosecution to the extent that delay could prevent the government from pursuing certain charges (e.g., on statute of limitations grounds), reduce the chance of arresting the individual, or otherwise undermine the strength of the federal case. Similarly, prosecutors should not be deterred from pursuing appropriate charges just because an individual liable for corporate crime is located outside the United States.

Under the doctrine of respondeat superior, a corporation may be held criminally liable for the illegal acts of its directors, officers, employees, and agents. To hold a corporation liable for these actions, the government must establish that the corporate agent’s actions (i) were within the scope of their duties and (ii) were intended, at least in part, to benefit the corporation. United States v. Agosto-Vega, 617 F.3d 541, 552-53 (1st Cir. 2010); United States v. Ionia Mgmt. S.A., 555 F.3d 303, 309-10 (2d Cir. 2009) (per curiam). In all cases involving wrongdoing by corporate agents, prosecutors should not limit their focus solely to individuals or the corporation, but should consider both as potential targets.

Agents may act for mixed reasons—both for self-aggrandizement (direct and indirect) and for the benefit of the corporation, and a corporation may be held liable as long as one motivation of its agent is to benefit the corporation. See United States v. Oceanic Illsabe Ltd., 889 F.3d 178, 195 (4th Cir. 2018) (explaining that corporate liability can arise “if the employee or agent has acted for his own benefit as well as that of his employer”) (quotations omitted); United States v. Singh, 518 F.3d 236, 250 (4th Cir. 2008) (stating that respondeat superior liability arises even “if the employee or agent has acted for his own benefit as well as that of his employer”); United States v.United States v. Potter, 463 F.3d 9, 25 (1st Cir. 2006) (stating that the test to determine whether a corporation is vicariously liable for its agent’s actions is “whether the agent is performing acts of the kind which he is authorized to perform, and those acts are motivated—at least in part—by an intent to benefit the corporation.”) (quotations omitted). In United States v. Automated Medical Laboratories, Inc., 770 F.2d 399 (4th Cir. 1985), for example, the Fourth Circuit affirmed a corporation’s conviction for the actions of a subsidiary’s employee despite the corporation’s claim that the employee was acting for his own benefit, namely his “ambitious nature and his desire to ascend the corporate ladder.” Id. at 407. The court stated, “Partucci was clearly acting in part to benefit AML since his advancement within the corporation depended on AML’s well-being and its lack of difficulties with the FDA.” Id.; see also United States v. Cincotta, 689 F.2d 238, 241-42 (1st Cir. 1982) (upholding a corporation’s conviction, notwithstanding the substantial personal benefit reaped by its miscreant agents, because the fraudulent scheme required money to pass through the corporation’s treasury and the fraudulently obtained goods were resold to the corporation’s customers in the corporation’s name). A corporate prosecution may be viable even where a corporation has a policy against the particular activity.

Moreover, the corporation need not even necessarily profit from its agent’s actions for it to be held liable. In Automated Medical Laboratories, the Fourth Circuit stated:

[B]enefit is not a “touchstone of criminal corporate liability; benefit at best is an evidential, not an operative, fact.” Thus, whether the agent’s actions ultimately redounded to the benefit of the corporation is less significant than whether the agent acted with the intent to benefit the corporation. The basic purpose of requiring that an agent have acted with the intent to benefit the corporation, however, is to insulate the corporation from criminal liability for actions of its agents which may be inimical to the interests of the corporation or which may have been undertaken solely to advance the interests of that agent or of a party other than the corporation.

770 F.2d at 407 (emphasis in original) (internal citation omitted) (quoting Old Monastery Co. v. United States, 147 F.2d 905, 908 (4th Cir. 1945)); see also United States v. Grayson Enterprises, Inc., 950 F.3d 386, 408 (7th Cir. 2020) (“[N]ot all the benefits of the crime need to go to a corporation for it to be held criminally liable for its agents’ actions”).

[updated April 2023]