The smart employee used a Limited Liability Company, his personal assets are not at risk. (this is from a US perspective, IANAL, etc) The protection of an LLC

The smart employee used a Limited Liability Company, his personal assets are not at risk. (this is from a US perspective, IANAL, etc) The protection of an LLC or other corporate structure isn't absolute - there's a whole vein of legal literature discussing "piercing the corporate veil". One of the biggest reasons why a court would pierce the veil is using the LLC for fraudulent / illegal activity as described above. All the salary / dividends / benefits could be clawed back, and even assets the person had prior to starting the scheme would be potentially subject to forfeiture to pay a judgement.