Settling Corporate Crime Cases

By | August 23, 2016

Two decades ago, the Department of Justice sought for and delivered guilty pleas when it came to corporate crime but that was then. New expectations have changed and instead of guilty pleas, cases are settled with what are called non-prosecution agreements (NPA) and corporate deferred prosecution agreements (DPA). The neither “admit nor deny” types of settlements are the direct result of a system that has limited time, personnel, or resources to effectively gather the evidence necessary to secure guilty pleas and complete court proceedings in a successful and timely manner. Firms like Debevoise & Plimpton specialize in areas of corporate crime.

Federal judges have become increasingly discontented with the ideology that corporate criminals should be mollified instead of indicted for their wrongdoings. The Justice Department’s involvement in the settlement of criminal cases has been added to a workload that includes investigation, evidence collection, and prosecution of crimes where few companies are willing to risk taking a chance with a jury trial.

The result is a situation where the courts are bypassed settling instead for a penalty and compliance agreement during an “administrative proceedings and resolution agreement” process. That eliminates the opportunity for judicial oversight or questioning of corporate settlements. More importantly, however, as noted by Judge William Young from Massachusetts, the new settlement and resolution system does not allow for the protection of public interests during the decision-making process which is normally the business of the courts.

On the positive side, the new system has relieved the courts of caseload overburden that has mired it in ongoing delays since it was established. Additionally, it now serves as a watchdog for corporate wrongdoing and ongoing regulatory non-compliance. The result is record yields from monetary penalties and related payments in the billions of dollars as well as the resolution of a huge number of cases that have been waiting on court dockets for some time.

Over the past several years, the trend in utilizing DPAs and NPAs has increased significantly because they are an efficient way to resolve high-profile and complex corporate crimes. Although criticisms continue, according to Joseph Warin there are good reasons upward trends continue:
* punishment and remediation can be tailored specifically to the crime and corporation;
* risks of litigation and collateral effects on parties that are innocent are minimized; and
* companies know that once an agreement is reached there is no future danger of an indictment.
There is no doubt that DPAs and NPAs have become the mainstay of white collar crime prevention and will be around for some time.