Last Month, the Jacksonville, Florida law firm of Shorstein & Lasnetski which handles state and federal criminal defense, personal injury, wrongful death and business litigation matters in Jacksonville and throughout Florida and Georgia prepared a blog post about an issue that has potentially crippling ramifications for companies but of which few companies are aware. The issue relates to the low standard that is applied when attributing vicarious criminal liability to companies based on the unlawful acts of their employees. The blog post can be read here. The Jacksonville Business Journal read the post and asked to publish a copy of it. A version of the post more suitable to that publication can be found here.
The post and the article were written as a reaction to our reading of a federal criminal case out of the Second Circuit called United States v. Ionia Management. We thought it was troubling how a company can be faced with severe financial penalties based on the conduct of any employee who commits a federal crime even if it is in derogation of company policies and procedures.
At the time of that blog post and that article, the Ionia Management case was still pending. Since that blog post, the Second Circuit has affirmed the ruling discussed in the post and the article. As a result, companies looking for a higher standard for vicarious criminal liability obtained no relief from the Ionia Management case.