What happens to a prosecution deferred? Judicial oversight of corporate deferred prosecution agreements

Deferred prosecution was created as an alternative disposition to rehabilitate juvenile and drug offenders more effectively. Prosecutors procure an indictment, but defer its prosecution in exchange for commitments to reform and restitution. If the offender meets his or her obligations, the indictment is dismissed and the offender moves forward without the conviction which triggers debilitating collateral consequences. Federal prosecutors have extended deferred prosecution to corporations amidst the recent wave of corporate crime, yet the extension has glossed over the traditional concern that deferral removes offenders from the purview of the court. Corporate offenders are uniquely susceptible to the license forfeiture and ineligibility for government contracts that may be triggered by a conviction. Therefore, they are vulnerable to demands to waive attorney-client privilege, submit to prosecutorial adjudications of agreement breach, as well as substantial obligations unrelated to the underlying conduct that can be imposed in corporate deferral. Judges have thus far held a pro forma position in corporate deferral, rendering them ineffective in dealing with these vulnerabilities. Prosecutors may therefore be jeopardizing the interests of the very employees, investors, and markets the mechanism aims to protect. Narrowly tailored but effective judicial involvement could curb prosecutorial overreaching, minimize the negative externalities of the corporate deferral process, and ensure that deferral achieves its purpose. In particular, this Note argues that judges could act as fiduciaries for constituencies otherwise unrepresented in the corporate deferral process whose interests may be unnecessarily compromised by the unilateral imposition of deferral terms by prosecutors.