## Facts

- A Massachusetts legislative crime commission investigated alleged corruption connected to regulation of the small-loan industry.
- A special grand jury returned numerous indictments charging bribery-related offenses and conspiracies involving corporate and individual defendants.
- Corporate defendants included Beneficial Finance Company, Household Finance Corporation, Liberty Loan Corporation, and Local Finance Corporation.
- The indictments alleged systematic bribery aimed at influencing the Small Loans Regulatory Board and other state banking officials overseeing licensing and regulatory treatment.
- Two separate multi-defendant jury trials were held in the Superior Court; multiple corporate and individual defendants were convicted on various bribery and conspiracy counts.
- The corporations challenged liability on the ground that bribes were arranged and paid by employees who were not officers or directors.

## Issues

1. Whether a corporation may be convicted of bribery based on unlawful payments made by employees who are not officers or directors.
2. Whether employees’ criminal acts and intent may be attributed to the corporation when the employees acted within delegated authority in the corporate transaction at issue.
3. Whether payments made in dealings with regulators to obtain favorable treatment may be treated as acts undertaken in furtherance of corporate interests for purposes of corporate criminal liability.

## Decision

- The Supreme Judicial Court affirmed the corporate convictions.
- The court held that a corporation may be criminally liable for bribery committed by employees acting within the scope of authority delegated to them in the relevant corporate business.
- The court rejected limiting corporate criminal responsibility to acts of officers, directors, or a single “directing mind.”
- The court treated the bribery as attributable to the corporations because it arose out of corporate dealings with regulators and was directed toward obtaining corporate advantage.

## Legal Principles

- A corporation is criminally responsible for unlawful acts committed by its employees when the employees act within the scope of their authority in the business transaction that constitutes the offense.
- Corporate criminal liability does not depend on the employee’s formal rank or title; the controlling question is whether the corporation placed the employee in a position to act for the corporation in the relevant matter.
- An employee’s corrupt intent may be imputed to the corporation when the conduct occurs in the course of corporate business and is at least partly aimed at benefiting the corporation.
- When corporate funds are used in a manner tied to corporate regulatory objectives, the factfinder may infer the payments were corporate acts rather than purely personal acts of the employees.

## Conclusion

The court sustained corporate bribery convictions by applying an agency-based attribution rule: corporations can be held criminally liable for bribes paid by non-officer employees when the employees act within delegated authority and in furtherance of corporate interests in the transaction at issue.


Commonwealth v. Beneficial Fin. Co., 360 Mass. 188, 275 N.E.2d 33 (1971)