Deferred Prosecution Agreement

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 What is Criminal Law?

There are two categories of laws in the United States which are meant to compensate victims of bad acts or to punish wrongdoing. These two categories are civil laws and criminal laws.

Civil laws are intended to deal with conduct that causes an injury to an individual or another private party through a lawsuit. The repercussions for parties that are found liable for acts are typically monetary.

However, it may also include other forms of court-ordered remedies, including injunctions or restraining orders. On the other hand, criminal laws are intended to deal with behaviors which are considered an offense against society, the public, or the state, even when the victim is an individual.

If a defendant is convicted of a crime, they may lose their freedom by being sentenced to incarceration in a jail or prison. In addition, they may be required to pay criminal fines.

No matter whether an individual is charged with a serious crime or a minor offense, the defendant, or accused person, has the right to a trial in addition to other legal protections.

What is Criminal Procedure?

Criminal procedure is the overall legal process of adjudicating claims for individuals who are accused of violating criminal laws. The idea behind every criminal procedure is known as the presumption of innocence.

This means that a suspect or defendant is considered innocent until they are proven guilty. Criminal procedure may involve issues such as:

  • Stop, detention, and arrest;
  • Search and seizure;
  • Booking and filing charges;
  • Suspect or eyewitness lineup Identifications;
  • Appointment of counsel, or the assigning a court-appointed lawyer;
  • Plea bargaining;
  • Criminal evidence;
  • Trial;
  • Criminal sentencing;
  • Appeal; and
  • Probation and parole.

There are many examples of criminal justice careers that individuals may choose to engage in, including:

  • Court clerk;
  • Court reporter;
  • Court register;
  • Criminologist;
  • Defense attorney;
  • Judge;
  • Forensic evidence scientist;
  • Immigration agent;
  • Legal assistant;
  • Legal researcher;
  • Paralegal;
  • Prosecutor; and
  • Police or law enforcement officers.

What is a Corporation?

Corporations are business structures that are created and regulated by state laws. They are defined as legal entities that are separate from their owners, or shareholders. This means that the corporation itself is held liable for corporate obligations.

There are numerous different types of corporations. In general, corporations are classified according to certain factors, including:

  • The tax structure;
  • The purpose of the corporation; and
  • The number of shareholders and amount of stocks to be issued.

Common forms of corporations include:

  • C Corporations;
  • S Corporations;
  • Non-Profit Corporations;
  • Business Corporations;
  • Professional Corporations;
  • Foreign Corporations; and
  • Public or Private Corporations.

Typically, when an individual refers to a corporation, they are referring to the two main categories of corporations under tax laws, C Corporations and S Corporations. There are numerous benefits to forming a corporation, including:

They can survive a change in ownership, which means they can exist forever;
They are considered individuals, so they are entitled to certain constitutional protections; and
Because only the corporation itself may be held responsible for its obligations, it has limited liability.

What is Corporate Criminal Liability?

Corporations are entities, or things that only exist through their employees. Corporations, however, may be held vicariously liable for criminal activities unless they are classified as limited liability corporations (LLCs).

For example, corporations may be held criminally liable under certain circumstances, including:

  • The criminal act by the employee or agent was within their scope of employment;
  • A statute or statutes defines what crimes a corporation is liable for; and
  • Failure to perform an affirmative duty;
    • Corporations are required to perform certain duties under the law. Failure to perform these duties may result in criminal liability;
      • For example, a corporation may be held guilty of tax evasion if it does not pay taxes.

How Can a Corporation be Liable for Criminal Acts?

Corporations may be held liable for criminal acts committed by their employees if those employees were acting within the scope of their employment and if their conduct benefits the corporation. Corporations, however, cannot be imprisoned as individuals can.

There are, however, ways a corporation may be punished, including:

  • Heavy fines;
  • Loss of business license(s); or
  • Regulation by government agencies.

If a Corporation is Criminally Liable, are Individuals Punished?

When corporations are held criminally liable, the responsibility will also fall on individuals. Officers, the board of directors, and other high-ranking individuals are typically also held criminally liable, as in the Enron case.

Individuals may be held criminally liable for the illegal actions of other employees under the legal theory of accomplice liability. If one individual instructs, encourages, aids, or assists another employee to commit or engage in criminal conduct, they may also be held liable for the other employee’s criminal act.

Supervisors or subordinates who have a duty to look after other employees and who knew or should have known that an employee is engaging in criminal conduct within the scope of their duties may also be held liable if they fail to take any actions to prevent the conduct.

What are the Penalties for a Corporation that is Held Criminally Liable?

A corporation that is held criminally liable for the criminal conduct of its employees may suffer criminally and financially. Every individual within the corporate entity may be held liable for the criminal activity.

When a corporation is held criminally liable, the penalties may include:

  • Revocation of corporate charter by state authorities;
  • Civil penalties;
  • Loss of government contracts;
  • Shareholder suits; and
  • Permanent or temporary loss of:
    • deposit insurance;
    • conservatorship; or
    • receivership.

What is a Deferred Prosecution Agreement?

A deferred prosecution agreement is an agreement that is made between a prosecutor and a criminal defendant. When these agreements are made, a defendant will agree to follow a set of conditions for a period of time in exchange for the government not bringing criminal charges against the defendant.

These types of agreements are typically in effect for approximately one year. If all of the terms of the agreement are met, the government will typically drop the charges against the defendant once the agreement has expired.

When are Deferred Prosecution Agreements Offered?

Deferred prosecution agreements are commonly offered in corporate crime cases, where a company, rather than an individual, is charged with a crime. These agreements typically require a company to:

  • Admit to all of the conduct they have been charged with by the government;
  • Cooperate fully with any and all investigations to the satisfaction of the government;
  • Disclose all information that is requested by the government; and
  • Not engage in any illegal conduct.

Deferred prosecution agreements are typically overseen by the prosecution itself. The prosecutor will determine whether or not the defendant performed adequately enough to satisfy the agreement.

A deferred prosecution agreement is also overseen by the Securities and Exchange Commission. However, the prosecutor typically retains a great deal of discretion on how to proceed.

Do I Need an Attorney?

If you or your corporation has been accused of a crime or charged with a crime, it is important to consult with an attorney as soon as possible. A criminal defense attorney can advise you regarding the options which may be available in your case.

If you have been offered a deferred prosecution agreement, it is important to have your attorney review it before agreeing to its terms. Your attorney can assist you with determining whether or not a deferred prosecution agreement would be in your best interest.

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