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When companies act criminally

You may have heard that corporations and businesses are technically considered “legal persons." While this classification grants them certain rights (like the ability to pursue a civil lawsuit) it also makes them liable for criminal charges.

Recently, Colorado-based natural gas company, Inflection Energy, was convicted for criminally polluting rivers and waterways during a spill in 2017. So, what penalties does a company face when facing criminal charges?

What punishments can a company face?

While companies may be considered "legal persons” they technically are not an individual. As such, a company can never actually face incarceration for criminal acts. However, individual executives and leaders at a company may be charged for crimes related to the business as well. For those individuals, incarceration becomes a real possibility.

In the case of Inflection Energy, it was the business as an entity and not any individual that was charged for the crime. Thus, the company as an entity was held criminally liable for damages.

Don't commit the crime if you can’t pay the fine

In a plea agreement, the presiding judge of the case ordered the company to pay a total $55,000 for the spill of approximately 63,000 gallons of treated brine water.

This money was split between various agencies, including the Department of Environmental Protection's clean water fund and the Northcentral Pennsylvania Conservancy, among other environmental protection agencies.

Other legal takeaways

This case demonstrates that companies, as "legal persons", can face criminal charges for criminal actions. While a company can not be incarcerated; individual executives can certainly face this penalty as separate charges from the criminal liability of the company.

Furthermore, although Inflection Energy pleaded no contest, they did so as an agreement. While a case may seem insurmountable, there are almost always options that can be exercised to obtain a beneficial result.

 

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