February/March 2010 / Cover Story
Another Option for Addressing Misconduct
This article considers a hypothetical kickback scheme between a purchasing agent and a manufacturer, and examines an option the victimized company might pursue along with or in lieu of civil litigation.
Reporting the matter to the government as criminal fraud has certain advantages. It’s usually quicker, and cheaper. In civil litigation the company must retain attorneys, while under the criminal option investigators and prosecutors perform most of the work. If a criminal conviction is obtained, a judge determines restitution, which might be beneficial. In addition, under the Crime Victims’ Rights Act, the victim is entitled to certain rights, including the right to full and timely restitution as provided in law. In essence, the government acts as the victim’s advocate during the criminal process.
There are some drawbacks to the criminal option. The victim is not a party to the case, and is subject to the government’s whims and timetable. Punitive damages are not available in the criminal process, and if a substantial portion of the restitution the victim seeks is not awarded, efforts to obtain it in a civil case might be harmed.