Restitution for the Corporate Victim

May 28, 2009 Published Work
Criminal Litigation, the Newsletter of the ABA's Section of Litigation, Committee on Criminal Litigation, Spring 2009

Recent headlines report tales of corporate greed and avarice. Today, the corporation is typically the villain. In fact, in the current economic climate, it is difficult to imagine a corporation as a victim, especially a corporation in the financial services sector. But corporations and other business entities, in all sectors and industries, are sometimes victimized by crimes committed by employees and third parties. These crimes range from trade secret theft and schemes to defraud, to insider trading and embezzlement. As victims, corporations may be entitled to victim compensation, just like natural persons. For this reason, it is imperative that counsel representing a corporate victim be familiar with the law governing victim rights.
Frequently, when the criminal conduct is discovered within an organization, an internal investigation ensues. Depending on the wrongdoing, considerable sums can be expended on fees for attorneys, accountants, and other experts hired to uncover the criminal conduct. These sometimes considerable expenses are, of course, over and above the losses suffered from the criminal activity itself.
One way to deal with these expenses is to treat such losses as a cost of doing business. However, given the often exorbitant costs associated with ferreting out and responding to criminal acts, companies are now seeking reimbursement for these costs from the responsible wrongdoers. Recently, courts have responded favorably, ordering wrongdoers to pay restitution to their corporate victims. Following are avenues open to a corporation seeking to recover victim compensation.

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