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Book explains why corporate fraud is hard to prove

Seattle residents may be familiar with the Enron scandal and the criminal prosecutions of the defunct company's executives. In a book called 'Capital Offenses: Business Crime and Punishment in America's Corporate Age," author Samuel Bell explains why the Enron story is unusual. Although corporate fraud happens all the time, it is uncommon for corporate executives to be punished for their illegal activities.

The author, a law professor at Duke University, led the Enron Corp. Task Force at the U.S. Justice Department. Before that, he was involved in the prosecution of James 'Whitey" Bulger, the infamous Boston gangster. He explains in his book that corporate executives are very difficult to prosecute for fraud due to the structure of corporations.

Corporations are business entities that are specifically designed to limit the liability of their owners and management. As a separate legal entity, a corporation stands apart from the people who run it. Corporate executives usually cannot be criminally charged for the larger actions of the corporation that they manage. Instead, they usually can only be charged with specific fraudulent accounting maneuvers. In many cases, however, large corporations are so complex that it is very difficult for prosecutors to prove that top executives knowingly committed any fraud.

Because corporate fraud is so difficult to prove, executives who are suspected of engaging in illegal activities are usually under investigation for a long period of time. People who believe that they are being investigated may want to contact a criminal defense attorney before charges are filed against them. An attorney may be able to field questions from investigators and work on a defense strategy in case it is needed.

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