Corporations keep committing crimes, and the U.S. Department of Justice keeps refusing to prosecute them.

Instead of holding big corporations accountable when they violate the law, federal law enforcement officials go out of their way to avoid indicting them.

Instead of prioritizing protecting the victims of corporate crime, the Justice Department protects corporate profits and property.

Instead of prosecuting corporations, prosecutors make deals with them.

The deals prosecutors make to protect corporations from prosecution are called deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs). Prosecutors and corporate defense attorneys negotiate these deals behind closed doors to keep corporations out of the criminal justice system.

Under these agreements, the corporations pay a fine, agree to reforms and promise not to commit any more crimes. Sometimes they are supervised by a DOJ-approved monitor.

Usually after two or three years, as long as the corporation does not violate the agreement, the DOJ drops any charges it may have filed.

Corporations that enter DPAs and NPAs (also known as pre-trial diversions) technically have not been found guilty – but they’re not innocent, either. They almost always admit and accept responsibility for their wrongdoing, but they are protected from the full consequences off criminal prosecution – consequences that, if criminal corporations faced them, would serve as powerful punitive deterrents to corporate crime.

The rationale for DPAs and NPAs is that they will better facilitate corporate compliance with the law, and a shift in corporate culture, than prosecution would.

But the empirical evidence strongly contradicts this theory. In short, the DOJ’s deals with large corporate offenders do not work.

Most corporations that have faced multiple criminal enforcement actions, yet avoided prosecution, are large multinationals.

Most of these have avoided prosecution more than once.

Contrary to the DOJ’s theory of corporate rehabilitation, DPAs and NPAs do not prevent corporate recidivism.

This history of large corporations repeatedly avoiding prosecution shows if the DOJ wants to deter corporate crime, a different approach is needed.


Deferred and non-prosecution agreements do not prevent corporations from breaking the law again. The DOJ has brought subsequent federal criminal enforcement actions against 38 corporations after the department entered deferred or non-prosecution agreements with the same companies. Most of these repeat offender corporations (63% – 24 out of 38) received at least one additional DPA or NPA after already having received a prior DPA or NPA, and most have pleaded guilty to subsequent crimes (66% – 25 out of 38). These corporations’ 78 NPAs and DPAs make up 15% of the 535 agreements the DOJ entered since 1992.
Corporate prosecutions are plummeting, but DPAs and NPAs are on the rise. In the first half of 2019, the DOJ used these agreements 21 times instead of prosecuting a corporate wrongdoer, putting the department on track to match previous peak years for their use. Meanwhile, the number of corporate convictions in 2018 fell to 99, the lowest number recorded since the government started tracking them in 1996. Individuals hardly ever receive pre-trial diversions from federal prosecutors – less than 1% of the time in 2018.
The biggest corporations get the most lenience. Out of the 38 repeat offender corporations identified, 36 are major corporations that are on or have appeared on the Forbes Global 2000 list of the world’s largest publicly traded corporations. Three of the corporations have held the top slot as the largest corporation in the world – JPMorgan Chase (2011 and 2010), General Electric (2009) and HSBC (2008). The two exceptions also were large, but not publicly traded. Most (25 out of 38) appear in the top 500 of the 2019 Fortune Global 500 list. Half of these repeat offender corporations (19 out of 38) are banks or financial corporations, and the majority of those (12) are headquartered internationally.
Prosecutors are not punishing corporations for violating agreements. Out of the 535 corporate NPAs (298) and DPAs (237) the Justice Department has entered with corporations, on only seven occasions – about 1% of the time – has the department held a corporation accountable for breaking its promise not to break the law in the future. In these instances, the DOJ extended the agreements with wrongdoing corporations on four occasions. In only three instances did it prosecute companies for their violation of the NPA or DPA.
Prosecutors are ignoring apparent violations. The reason the number of corporations being held accountable for breaching agreements is so low may be because the DOJ is not consistently enforcing against breaches. The agreements generally forbid corporations from committing further crimes, but about a third of repeat offender corporations (12 out of 38) were subject to subsequent federal criminal enforcement before the expiration of a previous NPA or DPA. Another fourth (9 out of 38) had some kind of criminal enforcement action brought against them within one and a half years of release from their previous NPA or DPA – including instances when alleged crimes occurred during the term of a previous NPA or DPA. In all 21 cases, the DOJ did not hold the corporation accountable for apparent breaches.

Note: The following is an abbreviated version of the report. For the full 135-page report, including detailed appendices describing each corporation’s violation and federal criminal enforcement action, download the PDF version.

The Rise of Deferred and Non-Prosecution Agreements

The Justice Department manual for business prosecutions instructs prosecutors to consider using deferred and non-prosecution agreements in circumstances when they see potential for a corporation’s conviction to result in “disproportionate harm to shareholders, pension holders, employees, and others not proven personally culpable.” When a corporation is prosecuted, it can be subject to monetary penalties, strict oversight and reputational damage and banned from conducting business with federal and state governments.

Whether for corporations or for individuals, the Justice Department considers prosecution when it has enough evidence to prove “beyond a reasonable doubt” that the accused corporation or individual violated U.S. criminal law. Absent such evidence, the department can decline to prosecute. In practical terms, prosecution traditionally leads either to a trial conviction if the defendant is found guilty (or acquittal if not guilty) or, more often, a plea agreement, which must be approved by a judge. For felony and misdemeanor offenses, federal sentencing guidelines for organizations attempt to ensure consistent application of the law.

Before 2003, the Justice Department reached fewer than five deferred or non-prosecution agreements with corporations per year. In the first decade following the turn of the millennium, these numbers rose to double digits by 2005 and to more than 40 in 2007 and 2010.

A March 2019 article in the American Criminal Law Review by Duke University Professor Brandon Garrett describes the decline in corporate prosecutions, comparing the last 18 months of the Obama administration with the first 18 months of the Trump administration. (See also Public Citizen’s report on the steep drop in corporate enforcement under Trump). Garrett observes that while a fair number of small cases continue to be pursued, larger cases against public companies have fallen, as have the penalties in such cases when they are pursued.

Trump’s DOJ has announced several policies that will reduce corporate penalties, such as the anti-“piling on” policy that limits how much a single corporate violation can trigger penalties from multiple agencies or jurisdictions. The most recently announced of these policies comes from the DOJ’s antitrust division, and is likely to increase the replacement of corporate prosecutions with deferred prosecution agreements. Under the new policy, corporations that violate antitrust laws, such as participating in criminal cartel or price-fixing conspiracies, will receive a DPA if they had a strong antitrust compliance program in place. This raises the obvious question of how strong the corporation’s internal systems to prevent antitrust violations could have been if it was possible for a criminal violation to occur.

This wave of gentle corporate enforcement policies and the decline of federal corporate crime enforcement stands in stark contrast to the DOJ’s approach to non-corporate defendants – i.e., actual humans. Federal prosecutors rarely enter deals like this with noncorporate humans. According to the latest official statistics, federal courts entered pre-trial diversion agreements in less than 1% of cases over the past year. Between 1996 and 2005, corporate pre-trial diversion were offered at a comparable amount, averaging about 2% of corporate resolutions per year. But between 2006 and 2018, the pre-trial diversion numbers increased so nearly one-in-five (18%) corporations that were the subject of criminal enforcement actions by the DOJ received a deferred or non-prosecution agreement. Over the same time frame, the proportion of non-corporate pre-trial diversions decreased from nearly 3% in 2003 to 0.6% in 2018.

The stakes in preventing – or failing to prevent – corporate crime are high. The outcomes of future criminal enforcement actions against corporate violators will have tremendous consequences, not only for the corporations’ executives, employees and shareholders, but for members of the public who are the victims of corporate crime. The Department of Justice reportedly recently has launched a number of criminal investigations of corporations. If the DOJ finds that any of the corporations it is investigating did in fact violate the law, the DOJ’s choice of enforcement action – prosecution, deferred prosecution agreement or non-prosecution agreement – will show whether the department is serious about deterring corporate crime. Prioritizing victims of corporate crime means holding corporations accountable for their misdeeds, not protecting them from the legal consequences of their own unlawful misconduct.

Major corporations that are reportedly currently under criminal investigation by the DOJ include:

Boeing, over the certification of the Boeing 737 Max, the model of plane that crashed in Indonesia and Ethiopia, killing 346.
Deutsche Bank, over alleged anti-money laundering failures, including whistleblower allegations about suspicious transactions by White House adviser and President Donald Trump’s son-in-law Jared Kushner.
Facebook, over its arrangements to share user data with other major technology companies.
Fiat Chrysler Automobiles, over alleged bribery payments and labor law violations.
Ford Motor Company, over its emissions-certification process.
Goldman Sachs, over its involvement with the international 1MDB Malaysian corruption scheme, and for which DOJ staff reportedly are seeking to prosecute the company.
Huawei, for allegedly stealing T-Mobile trade secrets.
Johnson & Johnson, for allegedly making misleading statements about asbestos in its talcum power products.
Poultry processors including Tyson Foods, Perdue Farms, Koch Foods and Sanderson Farms over an alleged price fixing conspiracy.
Purdue Pharma, over allegations including the OxyContin maker’s alleged failure to report doctors that overprescribed its opioids.
Uber, over an investigation into an alleged coverup of a 2016 data breach that exposed passengers’ and drivers’ personal information.

If the DOJ finds that any of these any of these corporations committed crimes, it will be telling which, if any, of them are prosecuted and which the DOJ opts to protect with a DPA or NPA.

Corporations that have already resolved criminal investigations with a DPA or NPA in 2019 include Walmart, Merrill Lynch and opioid manufacturers Insys Therapeutics and Rochester Drug Cooperative.

The rapid growth in the number of deferred and non-prosecution agreements in the mid-2000s is the outgrowth of decisions made under the Clinton administration. Mary Jo White, in 1994 the U.S. Attorney for the Southern District of New York, credits herself with entering the first deferred prosecution agreement with a major corporation, Prudential Securities, a subsidiary of insurance giant Prudential Financial. White, who would later become the Obama administration’s chair of the U.S. Securities and Exchange Commission, cited “crippling collateral consequences to thousands of innocent employees” as a main reason the corporation was offered a three-year DPA. White joined the white collar defense firm Debevoise and Plimpton after her time as a U.S. Attorney, and she rejoined the firm after serving as SEC chair.

In 1999, then-deputy attorney general Eric Holder issued a memo outlining U.S. government’s policies for criminal charges against corporations, which specifically indicated that DOJ attorneys should consider “collateral consequences” when bringing charges. The “Holder Doctrine,” as it came to be known, directed federal prosecutors to consider potential adverse effects on a corporation’s shareholders and employees when deciding whether to bring charges against a corporation.
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https://www.citizen.org/article/soft-on-corporate-crime-deferred-and-non-prosecution-repeat-offender-report/