Rejection of Deferred-Prosecution Agreement Debated

Attorneys for the US government and Fokker Technology Holding BV, a Dutch aerospace company, appeared before federal appeals judges on September 11, 2015 to argue that a judge should not have the leeway to reject the deferred prosecution agreement between the company and DOJ. In February of this year, US District Judge Richard Leon rejected the $21 million dollar agreement the government had reached with Fokker, saying that it was too lenient and “grossly disproportionate to the gravity of Fokker Services’ conduct in a post 9/11 world.”

Fokker allegedly violated US law more than 1000 times shipping aircraft parts to Burma, Iran, and Sudan. Fokker admitted to wrongdoing and agreed to pay what the company felt were reasonable fees. The company also agreed to an 18-month deferred-prosecution agreement and to strengthen compliance policies. Back in February, however, Judge Richard Leon refused to go along with the agreement between Fokker and the Department of Justice.

At this stage, the issue goes beyond the particulars of this case and concerns whether or not Judge Leon should have the latitude to disapprove of settlements such as these in which the Justice Department agrees to defer corporate prosecution and ultimately drop charges, as long as the company admits wrongdoing, agrees to pay a fine, and complies with certain conditions to avoid future wrongdoing.

Arguments before the three-judge appeals panel took place Friday, Sept. 11, only a day after the US DOJ announced their intention to take a harder line against white-collar crime, including increasing focus on holding senior executives responsible when laws are broken.

Lawyers for the DOJ and Fokker, allies in the appeal, argued that Leon had committed a “clear and undisputable” error. Lawyer Adam Unikowsky defended Judge Leon’s actions, saying Congress gave judges the discretion to decide whether or not a prosecution agreement is too lenient or not. A decision is expected sometime in the next few months.

Suzanne DeCuir, Global Trade Expertise