A federal appeals court is set to decide whether judges can tear up corporate prosecution agreements they deem too lenient, in a case that Justice Department officials fear will disrupt the agency’s deals with companies under criminal investigation, the Wall Street Journal reported today. Deferred prosecution agreements (DPAs) have been the Justice Department’s preferred means for punishing large companies without leaving the scar of a criminal conviction, but judges, who must approve such deals, have become increasingly skeptical of them. DPAs allow companies to avoid prosecution by paying a fine and submitting to certain conditions for a period of probation, after accepting responsibility for wrongdoing. The government began settling an increasing number of criminal investigations using deferred-prosecution agreements and nonprosecution agreements, or deals made outside of court, after an outcry about the collapse of accounting giant Arthur Andersen, following its indictment and conviction in 2002. That conviction was overturned in 2005.
