Can a Company Be Charged With a Crime: Penalties and Outcomes

Yes. A company can be charged with a crime, convicted, and punished much like an individual defendant. The U.S. Supreme Court settled the question in 1909, and federal prosecutors bring corporate criminal cases routinely today across securities fraud, bribery, antitrust, environmental, and healthcare offenses. Federal law caps organizational fines at $500,000 per felony count, but that ceiling rises to twice the company’s illegal gain or twice the victims’ losses when either figure is higher.¹

Why a Company Can Be Held Criminally Liable

The foundational case is New York Central & Hudson River Railroad Co. v. United States, decided in 1909. The Supreme Court held that Congress can subject corporations to criminal prosecution, reasoning that a company “which profits by the transaction, and can only act through its agents and officers, shall be held punishable by fine because of the knowledge and intent of its agents.”² Because a corporation can only act through people, those people’s acts and intent are attributed to the entity itself.

The doctrine that makes this work is respondeat superior. A company is criminally liable when one of its employees or agents commits a crime that meets two conditions: the conduct fell within the scope of the person’s job duties, and the person intended, at least in part, to benefit the corporation.³ The “benefit” element is read broadly. A sales manager who bribes a foreign official to win a contract acted to benefit the company even if leadership never authorized the bribe and had a written policy against it.

That is what surprises many business owners. A corporation can face charges when its executives had no knowledge of the wrongdoing and expressly forbade it. The test looks at whether the employee was doing the kind of work the company hired them to do and whether the illegal act was aimed, at least partially, at helping the company. A purely personal crime committed on company time generally would not trigger corporate liability, but the line sits further out than most executives assume.

Common Types of Corporate Criminal Charges

Financial crimes dominate the docket. Securities fraud, wire fraud, bank fraud, and money laundering account for the bulk of federal corporate cases. Bribery under the Foreign Corrupt Practices Act is a major enforcement area, making it illegal for U.S. companies to pay foreign government officials to win or keep business.⁴

Antitrust offenses are another major category. Price-fixing, bid-rigging, and market allocation among competitors are prosecuted criminally under the Sherman Act. The maximum corporate fine is $100 million per violation, and that ceiling can double to match the conspirators’ gains or the victims’ losses when either exceeds $100 million.⁵

Environmental crimes reach companies that violate clean air, clean water, or hazardous waste laws. Healthcare fraud is another heavily prosecuted area. The federal Anti-Kickback Statute makes it a felony to pay or receive anything of value in exchange for referrals involving services covered by federal healthcare programs such as Medicare or Medicaid.⁶ A healthcare fraud conviction carries mandatory exclusion from all federal healthcare programs, which for a hospital chain or drugmaker can be worse than the fine.⁷

How Corporate Criminal Cases Actually End

Most corporate criminal cases never reach a jury. The Justice Department resolves them along a spectrum, and the option chosen shapes everything that follows for the company.

At one end, prosecutors can decline to bring charges. At the other, they can indict and pursue a conviction at trial or by guilty plea. Two intermediate resolutions have become the standard outcomes in major cases:

Deferred prosecution agreement (DPA). The government files criminal charges but pauses the prosecution while the company meets specified conditions over a set term, usually including penalties, cooperation with ongoing investigations, and internal reforms. If the company satisfies the conditions, the charges are dismissed.
Non-prosecution agreement (NPA). The government agrees not to file charges at all, as long as the company complies with the agreement’s terms. Nothing is filed publicly unless the company breaches the deal.

The Justice Manual describes these agreements as “an important middle ground between declining prosecution and obtaining the conviction of a corporation.”³ Indicting certain companies, especially banks, defense contractors, or healthcare providers, can devastate employees, shareholders, and customers who had nothing to do with the crime. A DPA or NPA lets prosecutors extract penalties and reforms without triggering that collateral damage.

The Effect of Self-Disclosure and Cooperation

How a company reacts when it discovers internal wrongdoing dramatically changes the outcome. Under the DOJ’s corporate enforcement policy, a company that voluntarily reports its own misconduct, cooperates fully, and takes timely remedial steps will generally avoid prosecution altogether. The DOJ has stated that “absent certain limited aggravating circumstances, the Department will decline to prosecute the company” when those conditions are met.⁸

Cooperation matters even when voluntary self-disclosure is off the table, but there is a threshold requirement. To receive any cooperation credit, a company must turn over all non-privileged information about the individuals involved in the misconduct.⁹ A company that protects its executives by withholding facts about who did what receives no credit, regardless of how cooperative it looks in other respects.

Penalties for a Corporate Conviction

The financial exposure on conviction can be staggering. Federal law sets a baseline organizational fine of up to $500,000 per felony count, but an alternative provision lets judges impose fines up to twice the illegal gain or twice the victims’ losses, whichever is greater.¹ For a fraud that caused hundreds of millions in losses, the fine can run into the billions. Specific statutes set their own ceilings for particular offenses; Sherman Act violations, for example, carry a $100 million cap before the doubling provision applies.⁵

The federal sentencing guidelines for organizations use a formula to locate a particular fine within the statutory range. Judges start with a base fine tied to the seriousness of the offense, the company’s illegal profit, or the victims’ losses, whichever is greatest. That base is then multiplied by a factor set by the company’s “culpability score,” which reflects the involvement of senior leadership, prior misconduct, obstruction of justice, and whether the company had an effective compliance program. High-level executive involvement and prior violations can quadruple the base fine. A company that self-reported, cooperated, and maintained a strong compliance program can see its multiplier drop as low as 0.05, cutting the fine to a small fraction of the base.¹⁰

Fines are only the start. A convicted company also faces:

Restitution. Courts must, whenever practical, order the company to compensate victims for the harm caused by the crime.¹⁰
Probation. A convicted organization can be placed on probation for up to five years, during which it may be required to submit to compliance monitors, make internal reforms, and report to the court.¹¹
Asset forfeiture. The government can seize property and funds derived from or used in the criminal activity.
Debarment and exclusion. Convicted companies may be barred from government contracts or, in healthcare, excluded from federal programs such as Medicare and Medicaid.⁷
Reputational damage. Loss of business relationships, customer trust, and stock value often causes financial harm exceeding the formal penalties.

Individual Prosecutions Alongside the Company

Charging the company does not spare the people behind the misconduct. DOJ policy is that investigating individual conduct should begin “from the inception of the investigation,” not as an afterthought once the corporate case wraps up.³ Executives, managers, and lower-level employees who directed, authorized, or participated in the criminal conduct all face personal prosecution.

Prosecutors treat individual charges as the strongest deterrent, and the cooperation rules are built to make companies help identify the responsible people. A corporation that shields its executives receives no credit for cooperation regardless of how much money it pays or how many documents it produces.⁹ Under a Criminal Division pilot launched in 2023, companies entering corporate resolutions must build compliance-related criteria into their compensation and bonus systems, and a company that claws back pay from employees involved in misconduct can receive a dollar-for-dollar reduction of its criminal fine.¹²

How Compliance Programs Change the Outcome

A genuine, working compliance program does not make a company immune from prosecution, but it is one of the most important factors in how a case is resolved and how harshly the company is punished. The DOJ has published detailed guidance for prosecutors, built around three questions: Is the program well designed? Is it adequately funded and empowered to work? And does it actually work in practice?¹³

A paper program in a binder earns no credit. Prosecutors look for programs tailored to the company’s specific risks based on its industry, location, and business relationships. They examine whether the compliance function has real authority and resources, whether employees are actually trained, and whether the company updates its program based on new risks and past problems. A program built around real risk may still receive credit even when it fails to prevent a particular offense, because no compliance system catches everything.¹³ Under the sentencing guidelines, an effective compliance program can reduce a company’s culpability score by three points, directly lowering the sentencing multiplier and the fine.¹⁰

Inheriting Criminal Exposure Through an Acquisition

Buying another company can mean buying its criminal exposure. The DOJ’s position is that when one company merges with or acquires another, the successor company assumes the predecessor’s liabilities, including criminal liability. That applies across mergers, acquisitions, spin-offs, and consolidations.

The due-diligence stakes are real. An acquirer that closes without investigating a target’s potential criminal exposure may find itself prosecuted for conduct that predated the deal and that the buyer knew nothing about. The DOJ has offered some relief through a safe harbor policy that encourages acquirers to self-disclose discovered misconduct promptly after closing, but the underlying rule holds: corporate criminal liability travels with the business.

1
Office of the Law Revision Counsel. 18 U.S.C. 3571 – Sentence of Fine
2
Justia Law. New York Central and Hudson River Railroad Co. v. United States, 212 U.S. 481 (1909)
3
United States Department of Justice. Justice Manual 9-28.000 – Principles of Federal Prosecution of Business Organizations
4
Department of Justice. Foreign Corrupt Practices Act Unit
5
Federal Trade Commission. The Antitrust Laws
6
GovInfo. 42 U.S.C. 1320a-7b – Criminal Penalties for Acts Involving Federal Health Care Programs
7
Office of Inspector General. Background Information
8
United States Department of Justice. Department of Justice Releases First-Ever Corporate Enforcement Policy for All Criminal Cases
9
United States Department of Justice. FAQs – Corporate Cooperation and the Individual Accountability Policy
10
United States Sentencing Commission. Sentencing of Organizations
11
Office of the Law Revision Counsel. 18 U.S.C. 3561 – Sentence of Probation
12
U.S. Department of Justice. Corporate Enforcement Note – Compensation Incentives and Clawback Pilot
13
U.S. Department of Justice. Evaluation of Corporate Compliance Programs