by Richard A. Epstein
The Heritage Foundation
June 26, 2014
Deferred prosecution agreements and nonprosecution agreements are now staples of the enforcement strategy of the Department of Justice, which lauds them for their powerful incentive effects. Regrettably, these incentives often allow the DOJ to wring concessions from private parties that are disproportionate to the level of their offenses. The DOJ gains this improper leverage because to the target firm, the consequences of prosecution, typically in the form of loss of licenses, is worse than the consequences of conviction, which often imposes only modest fines. One illustration of the potential abuse is the recent DPA with Toyota, whereby its least important wrong—ostensible misleading of consumers—attracted the most severe sanctions. A good first step toward curing this practice would be independent review of DPAs and NPAs.



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