A deferred prosecution agreement is a deal between the Department of Justice and a company under criminal investigation: the DOJ files charges but pauses the case for a set period, usually two or three years, while the company pays penalties, fixes its compliance program, and cooperates with investigators. If the company meets every condition, the charges are dismissed. If it doesn’t, the government can prosecute immediately on the charges already filed, using the company’s own admissions from the agreement.
These deals have produced some of the largest corporate penalties on record, with single resolutions reaching into the billions.
How a DPA Works Mechanically
The legal basis sits in the Speedy Trial Act, which lets prosecutors defer a case “pursuant to written agreement with the defendant, with the approval of the court, for the purpose of allowing the defendant to demonstrate his good conduct.”1Office of the Law Revision Counsel. United States Code Title 18 – 3161
In practice, the DOJ files a criminal information with the court laying out the charges, then agrees not to move the case forward for the agreement’s term. The company signs voluntarily, admits the underlying facts, and takes on a detailed list of obligations. The charges sit on the docket the whole time. That is the pressure point: any material failure to comply, and the government can pick the case back up on charges the company has already admitted.
Why the DOJ Uses DPAs Instead of Indicting
A criminal conviction can be catastrophic for a company in ways that go well beyond the fine. Convicted corporations can lose government contracts, banking licenses, and the ability to operate in regulated industries. Those consequences fall on employees, shareholders, and customers who had nothing to do with the misconduct. A DPA lets the DOJ impose serious punishment without triggering that fallout.
The Justice Manual describes DPAs as occupying “an important middle ground between declining prosecution and obtaining the conviction of a corporation,” and directs prosecutors to consider one where collateral consequences to innocent parties would be significant.2United States Department of Justice. Justice Manual 9-28.000 – Principles of Federal Prosecution of Business Organizations
A related tool, the non-prosecution agreement, works similarly but involves no filed charges and no court oversight.3U.S. Government Accountability Office. GAO-10-110, Corporate Crime: DOJ Has Taken Steps to Better Track Its Use of Deferred and Non-Prosecution Agreements The DPA carries more weight precisely because the charges are on file.
When a Company Qualifies for a DPA
DPAs are not routine. Prosecutors weigh a set of factors from the Justice Manual before deciding whether to indict, offer a DPA, or offer an NPA:
- Seriousness of the offense, including harm caused and whether it involved violence, national security, or widespread fraud
- Whether the misconduct was limited to a few employees or reached senior management
- The company’s history of criminal, civil, and regulatory enforcement actions, in the US and abroad
- Whether the company voluntarily disclosed the conduct, produced evidence, and identified individual wrongdoers
- The effectiveness of the compliance program at the time of the offense and at resolution
- Remediation, including firing responsible employees, tightening controls, and paying restitution
- Whether a conviction would disproportionately harm innocent third parties
Self-disclosure moves a company up the ladder. Under the DOJ’s department-wide Corporate Enforcement Policy released in March 2026, a company that voluntarily discloses, cooperates fully, and remediates in a timely way can expect the DOJ to decline prosecution entirely, absent aggravating circumstances.4United States Department of Justice. Department of Justice Releases First-Ever Corporate Enforcement Policy for All Criminal Cases Companies that don’t clear that bar but still cooperate meaningfully are the ones most likely to land a DPA.
What a DPA Requires the Company to Do
Every DPA is negotiated separately, but most share a common structure.
Financial Penalties
The money side usually includes a criminal fine, disgorgement of profits from the illegal conduct, and sometimes restitution to victims. Fine calculations reference Chapter Eight of the U.S. Sentencing Guidelines, which sets a base fine and adjusts it based on cooperation, senior management involvement, and prior misconduct.5U.S. Sentencing Commission. Chapter Eight Fine Primer – Determining the Appropriate Fine Under the Organizational Guidelines Cooperators and self-disclosers often receive substantial discounts.
Factual Admissions
The company agrees to a detailed statement of facts describing the misconduct. It becomes part of the public court record. It’s not a guilty plea, but it functions as a public acknowledgment of wrongdoing, and it’s the reason a later breach is so dangerous: the admissions are already made.
Compliance Reforms
The agreement requires stronger internal controls, better training, and discipline for the employees responsible. The specifics track the failure. A company caught bribing foreign officials might have to overhaul its third-party due diligence. A fraud case might drive changes in financial reporting controls.
Independent Compliance Monitors
Some DPAs require the company to retain an independent monitor for the agreement’s duration. DOJ policy is that a monitor will not be required if the company voluntarily self-disclosed, cooperated, and has already implemented and tested an effective compliance program by the time of resolution.6United States Department of Justice. Voluntary Self Disclosure and Monitor Selection Policies The decision is case-by-case, and any DPA that imposes one must explain why. Monitors are expensive and intrusive, so avoiding one is a real incentive to remediate early.
Compensation Clawbacks
Under the DOJ’s Compensation Incentives and Clawback Pilot, a company that claws back pay from employees involved in misconduct can receive a dollar-for-dollar reduction in its criminal fine.7U.S. Department of Justice. Corporate Enforcement Note: Compensation Incentives and Clawback Pilot Companies resolving with the Criminal Division must also build compliance-related criteria into their compensation structure going forward.
Tax Treatment
Under 26 U.S.C. ยง 162(f), no deduction is allowed for amounts paid to a government entity in relation to a violation of law, so the fine and disgorgement pieces of a DPA are not deductible.8Office of the Law Revision Counsel. United States Code Title 26 – 162(f) The exception is restitution or remediation: if a portion of the payment is specifically identified in the agreement as compensating for harm caused by the violation, that portion may be deductible. When the total resolution runs into the billions, how each component is labeled during drafting matters.
Individuals Are Not Covered
A corporate DPA resolves the company’s exposure. It does not protect the people who carried out the misconduct. The DOJ’s 2026 Corporate Enforcement Policy states that the department “will not hesitate to seek appropriate resolutions against companies and individuals alike.”4United States Department of Justice. Department of Justice Releases First-Ever Corporate Enforcement Policy for All Criminal Cases The Justice Manual lists “the adequacy of the prosecution of individuals responsible for the corporation’s misconduct” as a separate factor prosecutors weigh before reaching any corporate resolution.2United States Department of Justice. Justice Manual 9-28.000 – Principles of Federal Prosecution of Business Organizations Identifying individual wrongdoers is, in fact, one of the central factors driving how much credit the company gets.
What Happens at the End of the Agreement
If the company satisfies every condition, the government asks the court to dismiss the charges. The company walks away without a criminal conviction from the conduct, though the statement of facts and the resolution stay on the public record permanently. This is the expected outcome in most cases.
A breach flips the situation. When the DOJ determines that a company failed a material term, it can revoke the deal and prosecute on the original charges, walking in with the company’s admissions already on file.
Two cases show how differently that can play out.
Ericsson entered a DPA in 2019 over a bribery scheme spanning more than 15 years and at least five countries, paying an initial criminal penalty over $520 million and accepting a three-year independent monitor. The DOJ later found the company had failed to truthfully disclose evidence related to schemes in Djibouti and China and had not promptly reported information about potential FCPA violations tied to its business activities in Iraq.9United States Department of Justice. Ericsson to Plead Guilty and Pay Over $206M Following Breach of 2019 FCPA Deferred Prosecution Agreement The DPA was voided. Ericsson pleaded guilty to the original conspiracy charges, paid over $206 million more, and lost all cooperation credit from the first agreement.
Boeing entered a DPA in January 2021 on one count of conspiracy to defraud the United States tied to the 737 MAX certification. In May 2024, the DOJ found Boeing had breached by failing to design, implement, and enforce an adequate compliance and ethics program. The government and Boeing submitted a proposed plea agreement in July 2024, but the court rejected it that December. After further negotiations, Boeing reached a non-prosecution agreement with the DOJ in May 2025, and the court dismissed the charges in November 2025.10United States Department of Justice. United States v. The Boeing Company A breach doesn’t automatically end in conviction. What follows depends on how the government, the company, and the court respond.
The Court’s Role Is Limited
The Speedy Trial Act requires court approval to defer prosecution, but courts cannot reject a DPA just because they think the penalty is too soft or the charges too narrow.1Office of the Law Revision Counsel. United States Code Title 18 – 3161 The D.C. Circuit confirmed as much in the Fokker Services case, holding that courts may check whether the agreement serves the statute’s purpose of letting the defendant demonstrate good conduct, but may not second-guess charging decisions or impose their own view of whether the deal was tough enough. A court can reject a DPA only if it contains illegal or unethical terms.