corporate crime | Definition

Doc's CJ Glossary by Adam J. McKee
Course: Criminal Law

Corporate crime is illegal activity by corporations or their representatives, such as fraud or environmental offenses, often for financial gain.

Corporate crime refers to criminal activities committed by corporations or other business organizations. Unlike traditional crime, which is typically committed by individuals, corporate crime involves illegal activities carried out by a business entity or its representatives. The illegitimate activities of corporate crime can have far-reaching impacts, affecting not only the economy but also society and the environment.

Different Forms of Corporate Crime

This type of crime can manifest in various ways, reflecting the diverse range of activities that corporations engage in. Some of the most common forms include:


Corporate fraud often involves deceptive practices for financial gain. Examples can include “cooking the books” to present a better financial picture to investors, insider trading, or Ponzi schemes.


Embezzlement is the misappropriation of funds entrusted to a corporation or its representatives. An employee, for instance, might siphon off money from corporate accounts for personal use.

Price Fixing

Price fixing involves agreements among competitors to set prices at a certain level. This is illegal under antitrust laws as it eliminates competition and can harm consumers.

Environmental Offenses

Corporations may engage in illegal activities that harm the environment, such as illegal dumping of toxic waste, air and water pollution, or over-extraction of resources.

Consumer Protection Violations

Businesses might violate consumer protection laws by producing unsafe products, engaging in deceptive advertising, or misrepresenting the quality or origin of their goods.

Motivations and Consequences

The motivations behind this type of crime often boil down to financial gain or competitive advantage. A company might, for instance, engage in fraud to attract more investors, boosting its stock prices. Alternatively, a business might commit environmental crimes to reduce costs associated with proper waste disposal.

However, corporate crime can also result from negligence or a lack of oversight. A business might unknowingly violate regulations due to an inadequate understanding of the law or failure to implement effective compliance systems.

Regardless of the motivation, the consequences of corporate crime can be devastating. Such illicit activities can lead to significant economic losses for investors, consumers, and society as a whole. They can also cause irreparable harm to the environment and human health.

Legal Ramifications and Prevention

Corporate crime is taken very seriously by the law. Penalties can include hefty fines, sanctions, and even dissolution of the corporation. In some cases, individuals involved in corporate crime can face personal liability, leading to fines or imprisonment.

To prevent corporate crime, businesses are encouraged to adopt robust compliance systems, which may include regular audits, thorough employee training, and strong whistleblower protections. Governments also play a crucial role in preventing corporate crime through stringent regulation, active enforcement, and fostering a culture of corporate responsibility.

In sum, corporate crime is a significant issue with far-reaching impacts. Understanding its various forms, motivations, and consequences is crucial for individuals, corporations, and society as a whole to prevent and address these crimes effectively.

[ Glossary ]

Last Modified: 05/14/2023


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