Be Careful What You Wish For

In the wake of the demise of Arthur Andersen following the partnerships' indictment by the federal government, prosecutors are increasingly pressuring corporations to enter into deferred-prosecution agreements (DPAs) to avoid ' at least temporarily ' full-blown criminal prosecutions. While these agreements may seem to offer an attractive option to embattled companies faced with the prospect of a lengthy and potentially devastating criminal prosecution, the freedom with which the individual prosecutors operate when crafting the agreements should cause concern. The standard DPA requirement that the company accept, and agree to never challenge, a government-crafted statement of facts enumerating the illegal acts forming the basis of the government's case puts the company in a precarious position that can ultimately result in a pre-packaged conviction if the company breaches any provision of the DPA. This potential pitfall must be recognized from the outset, and the effects of stipulating to the government's facts have to be considered before a company enters into any DPA.