Prosecution Deferred, Justice Denied

By DAVID M. UHLMANN, NYT

ANN ARBOR, Mich. — THE Justice Department is reportedly about to enter into a $2 billion deferred prosecution agreement with JPMorgan Chase over its role in Bernard L. Madoff’s Ponzi scandal, the latest example of the government’s troubling reluctance to bring criminal charges against major corporations.

The use of deferred prosecution and non-prosecution agreements, which began during the George W. Bush administration and has increased under President Obama, allows companies to avoid criminal charges if they pay substantial penalties, improve their compliance programs and cooperate with authorities. The companies do not plead guilty. They are not convicted of any crimes. They do not receive criminal sentences.

From 2004 through 2012, the Justice Department entered into 242 deferred prosecution and nonprosecution agreements with corporations; there had been just 26 in the preceding 12 years. The department’s criminal division now uses “noncriminal alternatives” in most of its settlements with corporations. From 2010 to 2012, the division reached twice as many deferred prosecution and nonprosecution agreements with corporations as there were plea agreements.

We’re not talking about small cases involving technical violations of the law. Prosecutors agreed to a deferred prosecution with HSBC in 2012 even though the bank was involved in nearly a trillion dollars’ worth of money laundering, much of it from drug trafficking. In another recent case, the department struck a nonprosecution agreement in the Upper Big Branch mine disaster of 2010 that left 29 miners dead in West Virginia. Massey, the mine owner, had concealed over 300 safety law violations from government inspectors.

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