Corporate Death Penalty?

While rarely applied, corporations can be sentenced to the “death penalty”, and one such adjudication just landed in New York.

October 2, 2023

By: Bobby Casey, Managing Director GWP

death penalty Part of what we do here is corporate structuring. We offer a simple, turn-key solution to setting up your own LLC. Corporate structuring is one of those wonky evils begotten by a system intent on screwing people over and a litigious culture.

Ideally, we wouldn’t need corporate personhood. Corporate personhood is creating another legal “person” by fiat to basically be the heavy for all the risk involved in starting and running a business.

It’s a great tool for risk and liability mitigation, as well as for privacy. There’s no denying that, regardless of your position on “corporate personhood” as a concept.

Many get caught up on this the way they do with “Intellectual Property”. None of it would be necessary if things weren’t structured as they are. Honestly, lawyers wouldn’t be necessary if the laws weren’t so overwhelming in volume or implication.

But here is where we find ourselves.

We are operating in a system that requires these add-ons, so to speak, where you can’t really go it alone anymore. You do need a corporate structure. You do need IP protections. You do need lawyers and CPAs. These are the system adjacent golems born out of the mud of a bad system.

All that being said, personhood is a sticky wicket. It’s afforded to veritably faceless, non human entities, which means they can’t endure the same consequences as humans do. You can’t put General Electric in prison for two years. If you find members of their board or under their employ individually culpable for a crime, sure you can imprison them. But if the company itself does something wrong, worst thing that happens is a fine or possibly bankruptcy through penalties.

Ask any Big Pharma or Big Tech corporation about that. They get fined, and go right back to what they were doing before the legal inconvenience.

Corporately speaking, bankruptcy is just another layer of protection for the business, not the end of it. Bed Bath and Beyond filed for bankruptcy. They reemerged in partnership with Overstock. The stores closed, sure. But the business still exists. Same goes for FAO Schwartz. They still exist.

For human persons, we worry about time lost in a cell, the death penalty, losing everything we worked for at the first sign of a lawsuit.

But, what if corporate persons could in fact face a “death penalty”?

On the human side, what typically constitutes a “capital crime”? It has to be truly heinous in nature, obviously, and it usually involves a homicide. Even then, jurors are reluctant to dole out such a sentence lightly.

One would think that a corporate death penalties would be ordered with similar timidity, reserving it for only the worst actors in the market place and likely involving tremendous harm.

You would be wrong.

How about NO jury, NO trial, and a full nationalization of corporate assets under a charge of fraud, while no parties have actually claimed harm?

This is wild, to say the least, and it’s happening to none other than former President, Donald J. Trump.

“The decision seeks to nationalize one of the most successful corporate empires in the United States and seize control of private property all while acknowledging there is zero evidence of any default, breach, late payment or any complaint of harm,” attorney Christopher Kise said in a written statement.

Manhattan Supreme Court Justice Arthur Engoron’s ruling earlier on Tuesday found that Trump and his business partners failed to amend their conduct after being warned of a “propensity to engage in persistent fraud.”

Kise accused the New York court of substituting “its own judgment for that of nationally recognized experts from the NYU Stern School of Business and beyond” and of disregarding the testimony of those who said there was no fraud.

In a separate article:

Engoron found that New York Attorney General Letitia James has proven her first fraud count without the need for a trial on that issue. Her lawsuit sought $250 million in damages, and six other counts against Trump, his family, and his business associates, as well as disgorgement of any “ill-gotten gains” from fraudulent conduct.

The remaining counts will go before Engoron without a jury, in a bench trial scheduled to begin Monday, Oct. 2. His ruling Tuesday indicates that he does not think much of Trump’s defenses.

Trump’s team will be seeking an appeal, so the net outcome of this ruling is yet to be seen or reach its final form, as it were.

What’s worrying is, I don’t see them bringing this same energy to the Biden Family, and the myriad shell companies in each family member’s name, or the red flags of money laundering identified by the IRS whistleblowers. Pedaling political influence to foreign countries is kind of a big deal, or so I thought. The DoJ literally delayed the investigation into Hunter Biden until the statute of limitations expired.

It’s not the what-about-ism, so much as it is the uneven application of tenuous legal theory in such a targeted way. The message seems to be: if you don’t play ball — which is not the same as playing by the actual rules — we’ll come for you. What else am I to glean from this?

This was true when conservative groups were targeted by the IRS; or when concerned parents were identified as “domestic terrorists”; or when people who were not even at the January 6th event at the capitol were sentenced to decades in prison, while individuals at the event were caught on video and audio blatantly encouraging invasion of the building received a slap on the wrist.

Equal protection means equal application as well.

Regardless of your feelings toward Trump, this sort of lawfare should be terrifying for anyone who has a business. The harsh reality emerging from this situation is: you cannot trust the government that makes the rules, to necessarily fairly apply those rules. They are written in a way that gives far too much latitude for a sitting judge with a grudge to play with.

It’s not a mystery why moving corporations, assets, and trusts offshore is such a common practice among the wealthy. Some petty superior court state judge can’t shut you down on a whim as they are doing now to Donald Trump.

The portal to tyranny isn’t found in some overt place happening to endearing characters. It starts with people others are willing to dehumanize. Something happens in the prisons, no one really bats an eye. Something happens to the poor, no one really cares. Migrants in cages? Meh. Coming for independent press? Meh.

Trump is a character a lot of people love to hate. He’s wealthy and he’s a populist that doesn’t necessarily — and certainly doesn’t quietly — tow the line. There’s something for everyone to hate here. And so, people are inclined not to care because it’s not them, it’s just the Mean Orange Man.

If you don’t play along with the uni-party, they will come for you. That’s not even debatable. The only unsettled matter is to what extent they will do so. But the death penalties for corporations looks a LOT like something that would happen in Venezuela or Cuba: nationalization.

Either way, if it wasn’t clear before, the case to get out of states like New York is obvious now. And if this sort of targeting continues to spread, it might even make sense to get out of the US altogether.

Click here to get a copy of our offshore banking report, or here to become a member of our Insider program, where you are eligible for free consultations, deep discounts on corporate and trust services, plus a host of information about internationalizing your business, wealth and life.

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