A Deferred Prosecution Agreement
Cal., referred to the Company`s practices regarding billing its NIPT tests to government health programs and was resolved through an NPA based on a number of factors, including: the Company`s extensive corrective actions, including the termination of employees responsible for payments, its compliance program, the creation of a compliance committee independent of the board composed of senior executives. the introduction of a third-party review of the selection of Progenity`s CPT code and the conduct of regular audits of claims with government payers; Collaboration with S.D. Cal.`s investigation; and reimbursements to appropriate federal health programs.  S.D. Cal. also noted the significant collateral consequences for health care recipients and the public as a result of Progenity`s ongoing lawsuits.   Australian Gov`t: Attorney-General`s Dep`t, Deferred Prosecution Agreement Scheme Code of Practice Consultation (June 8, 2018), www.ag.gov.au/integrity/consultations/deferred-prosecution-agreement-scheme-code-practice. The world has changed dramatically in 2020. However, amid the uncertainty caused by COVID-19, the U.S.
Department of Justice`s (“DOJ”) use of corporate non-prosecution agreements (“NPAs”) and deferred prosecution agreements (“DPA”) has proven to be a constant.  2020 proved to be a record year in terms of amounts recovered through corporate resolutions and the busiest full year under this government`s Ministry of Justice, measured by the number of agreements reached. In October 2020, the FSO also updated the FSO Operational Manual to include a chapter on DPAs.  The Director of the FSO described the chapter as a “comprehensive orientation” on how the FSO approaches DPAs and how the office works with companies where an ODA is a forward-looking outcome.  The guidelines largely reflect the same content as the ODA Code of Conduct, which has been in effect since 2014, and the Code of Conduct is frequently cited in the Guidelines. The guidelines provide an overview of the two criteria that a prosecutor must apply when reviewing a DPA: the evidentiary test, which assesses whether there is sufficient evidence to provide a realistic prospect of conviction, and the public interest test, which asks whether the public interest would be adequately satisfied by the conclusion of an ODA; instead of enforcing the law.  The Guidelines also set out many of the key factors that the FSO will consider when deciding to enter into an ODA, including cooperation and voluntary self-disclosure. Similar to the Department of Justice`s policy in the United States, the guidelines also encourage prosecutors to consider parallel investigations by other agencies, either overseas or in the United Kingdom.
 Although the guidelines are in line with the FSO Code of Conduct, they further clarify the mechanisms for negotiating an ODA with the FSO. For more information on SFO guidelines, please see our October 2020 Customer Alert. The terms of a DPA are negotiated between the defendant and the government. For example, the agreement could require the defendant to admit wrongdoing, pay a refund, or take certain steps to prevent future misconduct. For example, a DPA might require a company to fire executives responsible for misconduct, implement a more robust compliance program, submit to an independent monitor to ensure upright behavior, or all of the above – and perhaps even more. In summary, it appears that the June 2020 DOJ Guidelines on Corporate Compliance Programs have shown the intended effect: the DOJ and U.S. Attorneys` Offices adapt programs to individualized situations, at least in some cases, and other priorities in the June 2020 guidelines are reflected in the decisions. In the future, we expect more agreements tailored to the individual circumstances of each company and based on the principles set out in the June 2020 forecast. In addition, CSG Imports agreed that it would cease to obtain PPE of any kind for resale during the term of the ODA.  If CSG Imports does not comply with this requirement, the duration of the agreement will be extended to two years.  A second emerging trend in 2021 that appears to be in line with 2020 is a sharp decline in compliance controllers. Only one of the 18 agreements to date, the APD with State Street Corporation (“State Street”), requires an independent corporate controller.
Similarly, in 2020, only 2 out of 38 resolutions required an independent auditor or auditor. In contrast, 7 out of 31 resolutions introduced some form of independent compliance monitor in 2019. As mentioned earlier, France and the UK have robust DPA or DPA-type frameworks (see e.B. our 2020 year-end update). The UK`s Serious Fraud Office (“SFO”) has concluded 12 DPAs since 2015, and French law enforcement agencies have concluded 12 ODA-type agreements (Judicial Convention of Public Interest or “CJIP”) since 2017.  France and the United Kingdom jointly concluded four ODA-type agreements in the first half of 2021, and the evolution of ODA in the United Kingdom has sparked discussions on individual prosecutions related to DPAs. On August 19, 2020, the Bank of Nova Scotia (“Scotiabank”) and the DOJ Fraud Section, along with the U.S. Attorney`s Office for the District of New Jersey, entered into a three-year DPA to resolve criminal charges of wire fraud and attempted price manipulation.  The DPA imposes an independent compliance monitor and requires payment of more than $60.4 million, including a criminal penalty ($42 million), criminal forfeiture ($11.8 million) and compensation to victims ($6.6 million).
 Part of the criminal sanction will be applied to payments to the Commodity Futures Trading Commission (“CFTC”) under a separate agreement.  As the announcement of this significant deviation from traditional politics is still fresh, we started 2020 with open-ended questions about how the program would work in practice. In particular, the announcement has prompted some to question what incentives still exist for companies to be the first for leniency purposes. In February 2020, Assistant Deputy Attorney General Richard Powers addressed the issue, noting that the Antitrust Division had heard that “companies that report antitrust behavior may no longer feel the need to seek leniency as soon as possible, but may instead be blocked and later advocate for a DPA when a leniency notice is no longer available.”  Powers explained that such a wait-and-see attitude could be a “costly mistake,” noting that “among the exclusive benefits of [t]hence is full immunity from prosecution for the company and its insured cooperating employees,” in addition to other benefits.  A deferred prosecution agreement (DPA), which is very similar to a non-prosecution agreement (NPA), is a voluntary alternative to the decision where a prosecutor agrees to grant amnesty if the defendant agrees to meet certain requirements. .