Over the past decade, two novel approaches to resolving corporate criminal investigations have developed: the Deferred Prosecution Agreement (DPA) and Non-Prosecution Agreement (NPA).  The next few Insights will include some observations about these alternative resolutions to corporate criminal investigations and prosecutions, beginning today with a discussion of some basics.
 
A DPA is a voluntary alternative to adjudication in which a prosecutor agrees to grant amnesty in exchange for the defendant agreeing to fulfill certain requirements. An NPA operates in the same way, only the agreement takes place before criminal charges have been formally brought against the defendant. A case of corporate fraud, for instance, might be settled by means of a DPA in which the defendant agrees to pay fines, implement corporate reforms, and fully cooperate with the investigation. Fulfillment of the specified requirements will then result in dismissal of the charges.
 
The U.S. Department of Justice has been deploying DPAs and NPAs aggressively. The last 18 months or so have left no doubt that such resolutions are a vital part of the federal corporate law enforcement arsenal, affording the U.S. government an avenue both to punish and reform corporations accused of wrongdoing. One senior official was recently quoted stating that these types of settlements can be “a more powerful tool than actually going to trial.” The general goal of the prosecution is to require companies to implement an effective compliance program.
 
Department of Justice policy instructs prosecutors to enter into a DPA or NPA in circumstances “where the collateral consequences of a corporate conviction for innocent third parties would be significant.” Such agreements are designed to allow the company to remain in business, so as to preserve jobs and shareholder value, and increase the likelihood that victims will receive prompt restitution. The government seeks to achieve general and specific deterrence typically by requiring substantial changes to the company’s governance and operations, requiring regular reports on the progress of those reforms from a compliance monitor or the company itself, and reserving the power to revive criminal charges if the company is deemed to be noncompliant.
 
Generally, these agreements will include the following terms:

• Acceptance of a statement of facts describing illegal acts and/or an admission of wrongdoing;
• Agreement that the company, its employees, and agents will not publicly contradict the statement of facts;
• Cooperation with the government for the duration of the agreement, including the provision of documents and efforts to secure employee testimony;
• Remedial efforts such as the enhancement of compliance programs, a corporate integrity agreement, and/or monitorship;
• Fines and penalties;
• Obligation to report future violations of the law;
• Waiver of the statute of limitations; and
• Acknowledgement that the government has sole discretion to determine whether the agreement has been breached, and upon breach, the agreed statement of facts shall be admissible in a prosecution of the company.

Such agreements impose burdens and have collateral consequences of which companies should be wary. We’ll discuss those considerations in my next Insights.   
 
Patrick Mincey is a trial lawyer in Wilmington, where he founded the Criminal Defense Group at Cranfill Sumner & Hartzog LLP. His criminal practice ranges from representing individuals and corporate clients who are targets, subjects or witnesses in federal and state white collar proceedings to “blue collar” defendants charged with murder, drug conspiracies and assaults. To contact Patrick Mincey, call (910) 777-6017 or email him at [email protected].