Individual Officers/Persons in Control of an Auction Company Organized as a Corporation, who Knowingly Acquiesce to the Corporation's Criminal Act can be Personally Prosecuted for the Criminal act in name of the Corporation

The Court of Appeals of Wisconsin, in State v. Kuhn, 178 Wis. 2d 428 (Wisconsin 1993) held that individual officers are personally responsible for criminal acts committed in the name of the corporation. The Court found that since a corporation is an individual existing only in contemplation of the law, its criminal acts are those of its officers and agents.  Therefore, individuals controlling the corporation, who knowingly acquiesce to the corporation's criminal act may be personally prosecuted for the criminal act.

In the instant case, Appellant Janice J. Kuhn (“Kuhn”), the owner of an auction gallery, was charged with theft of auction proceeds, which she held as bailee on behalf of the owners of the auctioned property.  Kuhn had purchased Milwaukee Auction Galleries, Ltd. (“MAG”), a Wisconsin corporation, in 1977.  The Circuit Court for Milwaukee County (Wisconsin) found the Appellant Kuhn guilty of four counts of theft by bailee, in violation of Wis. Stat. § 943.20(1)(b), 3(c).  Consequently, Kuhn appealed before the Wisconsin Court of Appeals.

On appeal, Kuhn argued that she cannot be charged as an individual because it was MAG, the corporation, and not Kuhn as an individual, who dealt with the consignors. Kuhn contended that the trial court erred in not explaining why it "pierced the corporate veil" and held her personally at fault. Id. at 432.  Kuhn also cited civil cases to support her position that shareholders are not personally liable for obligations of the corporation. 
The court observed that, ‘“Individual officers are, however, personally responsible for criminal acts committed in the name of the corporation. Since a corporation is an individual existing only in contemplation of the law, its criminal acts are those of its officers and agents; and thus persons in control of a corporation and who knowingly acquiesce to the corporation's [criminal act] may be personally prosecuted for the criminal act.’” Id. at 432. ( quoting State v. Lunz, 86 Wis. 2d 695, 707, 273 N.W.2d 767, 773 (1979).)

The Court found that, MAG's contracts with the consignors fall within the definition of bailment. Id. at 432.  MAG agreed to sell the consigned property and remit the sale proceeds after deducting the commission, to the consignors within 35 days of the sale date. And in cases where the property was not sold, MAG agreed to return the unsold property to its owner. Therefore, the Court found that MAG was a "bailee" under section 943.20(1)(b).  As a result, Kuhn could be charged as a bailee for criminal acts committed in the name of that corporation. Id. 

Therefore, in light of the above discussion, Kuhn as the person in control of MAG, who knowingly acquiesce MAG’s acts may be personally held liable for the criminal acts in name of the corporation.