Extortion Hangup
<p>I need some clarification on extortion for general curiosity.  If a customer is aware of a crime and hires a lawyer to go to the company to request money in exchange for not reporting them to the authorities. Is this extortion? If not extortion is it legal, assuming their are no threats of media outing just legal jeopardy?</p>

<p>Absent a specified jurisdiction, I'm going to assume the US state of New York. This conduct falls squarely within the definition of extortion under New York Penal Law section 155.05(2)(e):</p>

<blockquote>
  <p>A person obtains property by extortion when he compels or induces
  another person to deliver such property to himself or to a third person
  by means of instilling in him a fear that, if the property is not so
  delivered, the actor or another will: [...] (iv) Accuse some person of a crime or cause criminal charges to be
  instituted against him;</p>
</blockquote>

<p>There is a defense under section 155.15(2):</p>

<blockquote>
  <p>In any prosecution for larceny by extortion committed by instilling
  in the victim a fear that he or another person would be charged with a
  crime, it is an affirmative defense that the defendant reasonably
  believed the threatened charge to be true and that his sole purpose was
  to compel or induce the victim to take reasonable action to make good
  the wrong which was the subject of such threatened charge.</p>
</blockquote>

<p>However, in your hypothetical, the customer is just seeking a payout. This defense is meant for situations like a theft victim telling the thief "give me back my property or I'll call the cops;" unless paying the customer is actually a reasonable action to make up for the crime, the customer can't use this defense.</p>

<p>If the crime is a federal one, this is also blackmail under 18 U.S. Code &sect; 873:</p>

<blockquote>
  <p>Whoever, under a threat of informing, or as a consideration for not informing, against any violation of any law of the United States, demands or receives any money or other valuable thing, shall be fined under this title or imprisoned not more than one year, or both.</p>
</blockquote>

<p>If interstate communications are involved, 18 U.S. Code &sect; 875(d) can also apply:</p>

<blockquote>
  <p>Whoever, with intent to extort from any person, firm, association, or corporation, any money or other thing of value, transmits in interstate or foreign commerce any communication containing any threat to injure the property or reputation of the addressee or of another or the reputation of a deceased person <strong>or any threat to accuse the addressee or any other person of a crime,</strong> shall be fined under this title or imprisoned not more than two years, or both.</p>
</blockquote>

extortion