Cengage Advantage Books: Foundations of the Legal Environment of Business 3rd Edition by Marianne Jennings

Exercise 11

Rooney Enterprises Inc. operated a cemetery in Franklin County, Virginia. A state law requires companies that receive advance payments for funeral expenses and burial plots to put those funds in a special trust account. Instead of doing so, Rooney used the funds for operating expenses. Rooney later became insolvent, so all customers who had prepaid for their burial plots and expenses lost both their money and their plots. The Virginia Attorney General brought criminal charges against Patrick Rooney, as president, for his failure to follow the requirements for trust fund deposits. Which of the following is a correct statement?
A) The company can be held criminally liable, but not Rooney.
B) Rooney did not act alone and cannot be held criminally liable.
C) Rooney can be held criminally liable for failure to follow the trust fund laws.
D) None of the above