Corporation blameworthiness and federal criminal fines
| DOI | https://doi.org/10.1108/JFC-01-2019-0010 |
| Pages | 413-422 |
| Published date | 11 February 2020 |
| Date | 11 February 2020 |
| Author | Emily M. Homer,George E. Higgins |
| Subject Matter | Financial risk/company failure,Financial crime,Accounting & Finance |
Corporation blameworthiness and
federal criminal fines
Emily M. Homer and George E. Higgins
Department of Criminal Justice, University of Louisville, Louisville, Kentucky, USA
Abstract
Purpose –The purpose of this paper isto assess if federal judges have sentenced criminal corporationsto
fines that are consistent with the seriousness of the offense and the blameworthiness of the organization,
which would be in line with the directives from the US Sentencing Guidelines.This paper will also use the
focal concernsframework to measure organizational blameworthiness.
Design/methodology/approach –This paper uses secondary data from federalsentencing documents,
collected by the US Sentencing Commission, for cases that were adjudicated between October 1, 2010 and
September30, 2017.
Findings –Results showed that the focal concernsframework can be used to define potential constructs for
blameworthiness and that an organization’s culpability score was a significant predictor in whether the
companyreceived a higher fine.
Research limitations/implications –The data are unable to examine two of the three measures of
focal concerns. Cross-sectionaldata limits the ability to draw conclusionsregarding cause and effect between
blameworthinessand monetary fines.
Practical implications –Results imply that judges are sentencing corporations that have higher
culpability scores to more severe fines,in accordance with both the federal Sentencing Guidelinesand focal
concernsframework.
Originality/value –This study is one of the first to apply the focal concernsframework, usually used to
examine the sentencingof individuals, to the sentencing of corporations.It is also one of the first to attempt to
empiricallydefine blameworthiness.
Keywords Corporations, Financial penalties, Criminal sentencing, Monetary fines, Focal concerns,
Blameworthiness
Paper type Research paper
Blameworthiness and corporate federal criminal financial penalties
Corporations have wide discretion in their daily activities and generally they act in
their own interest when pursuing business goals. Some organizations choose to commit
crimes to achieve their goals. When this happens, the federal government investigates
and, if warranted, prosecutes and sentences. The United States Sentencing Commission
(USSC) has specific parameters outlining the formula for calculating the criminal
sentence for corporations that have been convicted of federal crimes in Chapter 8 of the
United States Sentencing Guidelines (USSG) (USSC, 2016). This chapter indicates that
there are four primary sentencing considerations that a company’scriminalsentence
should achieve. The first priority is to ensure that the corporation’ssentencereflects the
intention to make the corporation’s victims whole through restitution. The second
priority is that organizations that were created as criminal purpose organizations
should be divested of their assets (which are intended to cause them to stop doing
business). The third of these considerations is that the amount of fine that a company is
sentenced to pay should reflect the seriousness of the offense(s) as well as the
culpability of the organization in the commission of the offense(s). The fourth
Federal
criminal fines
413
Journalof Financial Crime
Vol.27 No. 2, 2020
pp. 413-422
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-01-2019-0010
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