Federal Charges Against My LLC - Personal Liability

Your LLC doesnt protect you from federal prosecution. It never did. You formed that company because someone told you it creates a "shield" between you and liability - and in civil disputes, thats often true. But federal prosecutors dont need to pierce anything. They charge you directly. Welcome to Spodek Law Group. We handle federal white-collar defense for business owners who just discovered that their corporate structure is just paper when the DOJ comes knocking.

The distinction matters more then most people realize. Your LLC protects you from business debts. It protects you if a customer sues the company. It protects you in contract disputes. But it offers absolutely zero protection from criminal prosecution for acts you personally committed, authorized, or failed to prevent. Federal prosecutors aren't trying to hold you responsible for your company's conduct - their trying to hold you responsible for YOUR conduct.

Think about what that means. You might of spent thousands on formation documents, operating agreements, corporate minutes, separate bank accounts. You might of done everything right from a corporate governance perspective. None of it matters when prosecutors decide to charge you individually. The DOJ's own policy manuals make this explicit: pursuing individual accountability is a top priority in every corporate investigation.

The Illusion That Shattered Thousands of Careers

Heres the thing. Most business owners completely misunderstand what their LLC actually does. They hear "limited liability" and think it means limited liability for everything. It dosent.

In civil disputes - lawsuits from customers, vendors, competitors - the general rule is that corporate owners aren't liable unless they acted outside corporate authority or theres grounds to "pierce the corporate veil." Courts require specific findings:

• Commingling of funds between personal and business accounts
• Ignoring corporate formalities
• Inadequate capitalization
• Using the entity to perpetrate fraud or injustice

The veil-piercing standard is high. Most business owners never face it.

But in federal criminal prosecution, theres no veil to pierce.

Read that again.

Prosecutors dont sue your LLC and then try to reach you through it. They charge you directly as the individual who committed wire fraud, bank fraud, money laundering, tax evasion - whatever conduct they've documented. Your corporate structure is completley irrelevant to whether you committed a crime. The question isnt "can we pierce the corporate veil to reach this person." The question is "did this person commit federal offenses."

The Doctrines That Make It Worse

OK so you understand that federal prosecutors charge individuals directly. But it gets worse. There are specific legal doctrines designed to make individual prosecution easier - and some of them dont even require proof that you knew about the wrongdoing.

The Responsible Corporate Officer Doctrine

This one should terrify anyone who delegates. The "Park Doctrine" - named after a 1975 Supreme Court case, United States v. Park - allows criminal prosecution of corporate officers who had "responsibility and authority either to prevent in the first instance, or promptly to correct" regulatory violations. Even without proof of knowledge. Even without proof of intent. Even without proof of personal participation.

John R. Park was president of a national food store chain. He was convicted for rodent contamination in company warehouses. He didnt cause the contamination. He didnt know about the contamination. He wasnt responsible for sanitation. But as president, he had authority over overall operations - and thats all the law required. The Supreme Court affirmed his conviction.

For years, these prosecutions were rare. But regulators are increasingly viewing the Park Doctrine as a powerful tool. According to JAMA, its been used only 13 times since 2000 - but the FDA has signaled newfound enthusiasm for these prosecutions. And heres the kicker: your only defense is proving you were "powerless to prevent or correct" the violation. If you had authority, you had liability. Period.

The Yates and Monaco Memos

In 2015, Deputy Attorney General Sally Yates issued a memorandum that changed everything. The "Yates Memo" made individual prosecution an explicit DOJ priority and required corporations seeking cooperation credit to provide "all relevant facts about the individuals involved in corporate misconduct." All or nothing. Your own company has to name you to help itself.

Then came the Monaco Memo in 2022. Deputy Attorney General Lisa Monaco expanded the requirements: corporations must now turn over non-privileged information about ALL individuals involved in wrongdoing, regardless of position, status, or seniority. Not just executives. Not just people "substantially involved." Everyone.

This means frontline managers and C-suite executives alike could be implicated when corporations voluntarily self-disclose misconduct. And heres the part nobody mentions: DOJ policy explicitly states that "no corporate resolution should provide protection from criminal liability for any individuals." Your company can cooperate fully, recieve a reduced penalty, and leave you facing decades in prison. Thats not a bug. Its the system working exactly as designed.

The Corporation's Lawyers Arent Your Lawyers

When federal investigators contact your company, the company hires defense counsel. That lawyer represents the corporation - not you. Their duty runs to the entity, not to you personally. And when the DOJ demands all information about individuals involved in wrongdoing as a condition of cooperation credit, that lawyer may be legally obligated to provide information that destroys your defense.

What This Means If Your Facing Investigation Right Now

Your instinct is probably to cooperate, to explain, to show investigators that the company was trying to do the right thing. Dont. Not without your own counsel. Not without understanding that your interests and the company's interests may have already diverged.

If your LLC is under federal investigation:

The company needs its own lawyer. Thats probably happening already. But you need YOUR own lawyer - someone whose duty runs to you, not to the entity. Someone who can assess whether you personally are a target. Someone who can navigate the impossble situation were cooperating with the corporate investigation might destroy your individual defense.

This isnt paranoia. Its pattern recognition based on how these cases actualy unfold.

Federal fraud offenses often carry substantial fines and lengthy prison sentences. Business owners charged in federal fraud cases frequently face multiple charges - wire fraud, mail fraud, money laundering, false statements. A federal jury imposed $51 million in personal liability on three individuals in a Medicare fraud case. CEOs of medical device companies, software companies, non-profits - they're being indicted and convicted. The idea that corporate structure provides some protection is gone.

Todd Spodek has defended business owners who discovered too late that their LLC was paper. Spodek Law Group understands how federal prosecutors build these cases - and more importantly, how to intervene before your own company's cooperation becomes the evidence that convicts you.

If you've recieved a target letter, if investigators have contacted your business, if your company is considering voluntary disclosure - the time to get individual representation is now. Not after the corporate lawyers have turned over your emails. Not after youve made statements thinking the company's interests aligned with yours.

Were here when you need us. The consultation is confidential, and we'll tell you exactly were you stand.