Deferred prosecution agreements have been in the news recently. As commentators, including this one, have noted, since the untimely demise of Arthur Andersen following its indictment and conviction — untimely in that the Supreme Court ultimately reversed the firm’s conviction — prosecutors have more frequently resorted to deferred prosecution agreements to resolve corporate criminal investigations.[FOOTNOTE 1] For the corporate target, a deferred prosecution agreement — no matter how harsh and intrusive the terms — is frequently an offer the company simply cannot refuse when the alternative is possibly death or less drastic, but nonetheless severe, collateral consequences. For the prosecution, offering a deferred prosecution agreement is much more attractive than having to make the difficult decision whether to decline prosecution or prosecute and risk the potential of serious adverse consequences for innumerable truly innocent bystanders.

Deferred prosecution agreements essentially take two forms. In one, no charges are filed, and the government reserves the right to prosecute if the conditions of the agreement are not met. In the other, a complaint or indictment is filed, along with a simultaneous agreement deferring prosecution of the charges for a fixed period of time, after which the charges are dismissed if the company has complied with the conditions of the agreement. The first type of agreement is strictly “private” between the parties and does not involve the court. The second type of agreement involves the court, at least to the extent it is necessary for the court to agree to stop the Speedy Trial Act clock.

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