| NEW YORK, Sept 13
NEW YORK, Sept 13 A top U.S. criminal prosecutor
said Thursday that deferred prosecution agreements have become a
mainstay of the government's white-collar enforcement efforts,
creating a "smart and responsible" alternative to criminal
Lanny Breuer, assistant attorney general for the criminal
division at the U.S. Department of Justice, said in remarks to
the New York City Bar Association that the increased use of
deferred prosecution agreements and non-prosecution agreements
over the last decade had a "transformative effect" on corporate
compliance across the globe, allowing good companies to
rehabilitate while punishing bad actors.
"The result has been, unequivocally, far greater
accountability for corporate wrongdoing - and a sea change in
corporate compliance efforts," Breuer said. "Companies now know
that avoiding the disaster scenario of an indictment does not
mean an escape from accountability."
In the agreements, the government agrees to delay or forgo
prosecution if a company admits to wrongdoing, cooperate with
any ongoing investigations, pay a fine and agree to improve its
compliance programs. If the terms are not met, the government
can prosecute the case.
Breuer pointed to the non-prosecution agreement entered into
in June by Barclays Bank plc, which was accused of manipulating
the London Interbank Offered Rate, or LIBOR. Barclays agreed to
pay $160 million to U.S. authorities, implemented new compliance
measures and agreed to aid investigations against individuals
and other financial institutions.
In that case, the non-prosecution agreement allowed
prosecutors to recognize Barclay's "extraordinary" cooperation
and kept the company from facing the more serious consequences
of criminal indictment, Breuer said.
Critics have said that deferred- and non-prosecution
agreements allow companies that commit serious crimes to get off
easy. Some have also argued that standards for what behavior
merits a more favorable agreement versus criminal prosecution
But Breuer said deferred- and non-prosecution agreements
present a more palatable option when large companies are under
scrutiny, allowing wrongdoers the chance to reform without
causing collateral damage to innocent shareholders and
"When the only tool we had to use in cases of corporate
misconduct was a criminal indictment, prosecutors sometimes had
to use a sledgehammer to crack a nut," Breuer said. "More often,
they just walked away."
Now, "companies know that they are much more likely to face
punishment than they were when our choice was limited to
indicting or walking away," he added.