A Felony is a gameplay feature that only appears in Disgaea 2: Cursed Memories. Felonies are a sign of honor for demons, because laws only exist in the Netherworld to be broken. By visiting the Item World, the player may receive Subpoenas for reasons as diverse as "Too Many Murders" or "Being a Loser". This summons the character to the Dark Court on the floor marked by a Bailiff in the Subpoena item, where they will receive a felony, Hell and even items.
Felonies also grant bonus EXP for each killed enemy, with a maximum of 300 felonies or a maximum of 300% more EXP per kill. Note that the stamp on the character's portrait will only display 99 felonies, making harder to keep track of felonies gained past 99. In Dark Hero Days, a new section in a Character's status screen called Gross Criminal Records keeps track of all hidden Felonies. They also increase the senators' opinion of the player, heightening the chance of unlocking hidden maps and stages; and lower the buying prices of items in the Shop.
The only way to rid a character of their Felonies is by reincarnating as a Prinny to cleanse them of their sins. (Or "Reincarnating to Atone for their Sins" if the character in question is a main character, such as Adell or Yukimaru.) Note that the benefits of any previous Felonies will still be in effect, getting rid of the Felonies will only remove the symbol blocking the character's portrait.
Felonies can also have an effect on the ending of the game depending on how many felonies Adell has accumlated. It is also possible to have more than one character receive the felony, by throwing a tower of characters into the Dark Court gate, they will all receive felonies.