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<i>Fokker</i> and Its Aftermath: The Irony and the Legacy

By Doreen Klein and Stanley A. Twardy, Jr.
November 30, 2015

While recent years have seen a rash of decisions rejecting civil settlements between the Securities and Exchange Commission (SEC) and corporate defendants, United States v. Fokker Services B.V., 79 F. Supp. 3d 160 (D.D.C. 2015), represents the first time that a federal court has rejected an agreement in the criminal context. The defendant in Fokker was an aerospace services provider that the government charged with selling aircraft parts to customers in Iran and other U.S.-sanctioned nations. The Department of Justice (DOJ) and the defendant entered into a deferred prosecution agreement, and the DOJ moved to exclude time under the Speedy Trial Act, 18 U.S.C. ' 3161 ' a standard request permitting the DOJ to assess the defendant's adherence to the terms of the agreement. Characterizing Iran as “one of our country's worst enemies” and Fokker as a “rogue” company, U.S. District Judge Richard Leon denied the application, derailing the agreement. DOJ and Fokker appealed to the D.C. Court of Appeals, which heard argument in September but at press time, had not yet rendered its decision.

There are several ironies. The district court's reading of the Speedy Trial Act ensures that this matter will remain in limbo and without resolution for some time to come. Moreover, the case came before the Court of Appeals two days after the DOJ announced a renewed initiative to hold individuals accountable for corporate misdeeds ' one of the chief failings the district court identified. Finally, Fokker leveraged off the holding in United States v. HSBC Bank USA, N.A., No. 12-CR-763, 2013 U.S. Dist. LEXIS 92438 (E.D.N.Y. July 1, 2013), where U.S. District Judge John Gleeson relied upon a “plain reading” of the Speedy Trial Act ,but termed his scrutiny of a Deferred Prosecution Agreement (DPA) “novel.”

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