ESSAY PROBLEM:Answer the essay question in the space provided. Use ONLY complete sentences; DO NOT ABBREVIATE.Write legibly.Answers that cannot be understood will be graded as wrong.Use facts and legal principles to build a cogent, persuasive, legal argument for an outcome.Be sure to explain and support your answer.It should be clear that you understand the legal reasons why your answer is right.AVOID unsupported, conclusory statements.REMEMBER, your answer should reflect your understanding of the pertinent course material.At a minimum, be sure that your answer is responsive to the questions posed.Total possible for the essay problem is 10 points.

QUESTION 56:

Henderson is the president of Allied Fabrication Corporation ("AFC"), a specialty steel company. An inspection by Beryl, a government agent, uncovers unsanitary conditions caused by cost-cutting practices of Veronica, an AFC employee in charge of materials handling, in an AFC plant. Beryl articulated her findings in a letter to Wanda, Veronica's immediate supervisor.Veronica is aware of the applicable regulations but her cost-cutting practices saved AFC $10,000 per week in waste disposal expenses.Veronica kept $500 per week of the savings in her budget as a reward to herself for her ingenuity.Wanda, an AFC vice-president, calls Beryl to assure her that the illegal practices will be corrected; but, nothing is changed, which a later inspection reveals. Wanda was aware that Veronica's expenses were about $10,000/week under budget, but had chosen not to inquire as to why.The savings in Veronica's unit had helped Wanda to earn a bonus for the efficiency of her division of the company.

After a second inspection revealed no change in AFC's practices, Beryl referred AFC to the Justice Department for criminal prosecution for noncompliance with the relevant federal statute.The Justice Department is also considering adding other defendants to the indictment.Henderson knows nothing about any of this until criminal charges are filed. Can AFC be convicted of a crime in these circumstances? Why or why not?Can Henderson be held personally liable?Why or why not?On what basis?Who else could be charged?For what and why?Explain your answer. (10 pts.)