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What is a Federal Deferred Prosecution Agreement?

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Here in Texas, federal investigations may target organizations and businesses in their various forms as well as individuals for violations of federal criminal statutes.  For instance, in health care fraud investigations, potential defendants include all sorts of practitioners, from doctors or pharmacists, to pharmacy retailers; medical supply distributors; hospital operators; clinic operators; group practices; nursing facilities; rehab centers; surgical service centers; dialysis centers; and more.  See, Huntoon, Lawrence R. “The national practitioner data bank guidebook.” Journal of American Physicians and Surgeons 13.4 (2018): 99-101.

As a part of negotiations with the federal prosecutor in a criminal matter, experienced federal criminal defense attorneys may confer with their clients about the possibility of entering into a “deferred prosecution agreement.”  In many situations, these agreements are very beneficial to the individual or business who is facing serious federal charges.  See, e.g., Fragale, Mauro, and Valentina Grilli. “Impunity for Sale: Are Deferred Prosecution Agreements a Way for Companies to Evade Liability?” Trento Student Law Review 6.1 (2024): 41-70.

What is a Deferred Prosecution Agreement (DPA)?

A deferred prosecution agreement (“DPA”) is a contract.  It is a legally binding agreement entered into by a federal agency, such as the United States Department of Justice (“DOJ”), and a person or entity that is facing criminal charges.  It does not stand alone.  It will be accompanied by other documents, like a criminal complaint.

Once in place, the AUSA will file the criminal complaint and the DPA with the court, so it is of public record.  This will be accompanied by a formal request to the court that any prosecution be delayed according to the terms of the DPA, allowing the defendant to fulfill its agreed-upon actions.

The DPA will have language that has been negotiated between the AUSA and defense counsel. Provisions will include agreements that the accused will do things like:

DPAs vs Non-Prosecution Agreements (NPAs)

These are not the only agreements that may be a part of a federal prosecutorial negotiation.  There are also “Non-Prosecution Agreements” (“NPAs”), which are a different type of deal.  See, 9-27.600 of the Justice Manual of the Office of the United States Attorney General (“Justice Manual”).

With a NPA, the government agrees NOT to file charges against the individual or business in exchange for certain actions that are similar to the DPA provisions (e.g., fines; limitations waiver; admission of facts; compliance monitoring; cooperation).

However, NPAs are not filed with the court.  They are not reviewed or read by the judge.  If the NPA is honored by the accused, then no criminal charges are ever formalized.  If the NPA is breached, then charges can be filed as an official complaint and the fact admissions in the NPA used as part of the government’s case.

The overriding benefit to the accused here?  In both DPA and NPA scenarios, the individual or business entity is not convicted of any crime.  It offers an opportunity to have the federal criminal charges dismissed or dropped once the accused completes all the required conditions.

DOJ Encourages Cooperation by Companies and Corporations

From a criminal defense standpoint, it is good to know that the AUSA is directed to look favorably upon the possibility of a DPA.

The DOJ “…encourages and rewards cooperation.  Credit for cooperation takes many forms and is calculated differently based on the degree to which a corporation cooperates with the government’s investigation and the commitment that the corporation demonstrates in doing so.  A corporation’s cooperation may, as part of a holistic analysis, impact the appropriate form of the resolution as well as the fine range and fine amount.”

See, 9-28.700 of the Justice Manual.

Elements of a Federal Deferred Prosecution Agreement

A DPA is a contract, and must meet the legal requirements of a valid agreement.  There will be an offer, acceptance, consideration, signatures by all the parties, etc.  These are not plea agreements, however.

For a defendant signing a plea agreement, there are provisions where they plead guilty to the charges listed in the document.  This plea will flow into a criminal conviction.

In a DPA, there is no admission of guilt.  There is no direct follow-through to a conviction entered in the record.  Instead, the DPA lists the agreed-upon conditions in language approved by the AUSA and the defense lawyer, which are to be met by both the government and the accused.

If the accused meets all the conditions identified in the DPA, then the AUSA has the contractual obligation to dismiss the charges with no conviction. As a general rule, a plea agreement has no such conditions.

Federal Health Care Fraud Charges and DPAs

For Texas criminal defense lawyers practicing in federal court, the focus upon various health care practitioners is a very real concern.  Anyone in the medical field, in any capacity, must be alert to the zeal with which federal agencies are looking into various forms of health care fraud today.

For more, see: Doctor’s Risk of Arrest: Popular Bases for Texas Health Care Fraud Prosecutions; and HealthCare Fraud Prosecutorial Trends in 2024: Predictions Based Upon Latest OIG DOJ Enforcement Report.

Case Example: Pharmacy Facing Medicare Fraud Charges

One example of a federal health care fraud DPA involves a limited liability company with its principal place of business in Pompano Beach, Florida, established as Solera Special Pharmacy, LLC (“Solera”).  A federal investigation led to charges of health care fraud, in violation of 18 USC §1347.

Read the DPA, as filed of record, here.

Solera admitted in the DPA that it dispensed lots of Evzio, the highest-priced naloxone product, which required prior authorization from insurers before it would be covered.  Solera completed prior authorization forms, without the doctors’ okay, with staff signatures.  Sometimes, the forms included false information to support the request.  Medicare co-pays were often waived without confirming financial hardship.

Both Solera and its CEO also entered into a civil settlement agreement where False Claims Act claims were resolved involving a $1.31 Million payment to the federal government.

As explained by the AUSA in the DOJ news release:

Solera faced felony charges of having knowingly and willfully executed a scheme and artifice to defraud Medicare, a health care benefit program as defined in Title 18, United States Code, Section 24(b), and to obtain, by means of materially false and fraudulent pretenses, representations, and promises, money and property owned by, and under the custody and control of, Medicare, in connection with the delivery of and payment for health care benefits, items, and services, in violation of Title 18, United States Code, Section 1347.

Case Example: HCF Physician Kickback Charges to Diagnostic Testing Company

Another example of a DPA involving federal health care fraud allegations was entered into by a company established to provide diagnostic testing to patients referred to it by various doctors.  Read this DPA, filed of record as an exhibit to the Court Order of Continuance, here.

Based in Parsippany, New Jersey, H&D Sonography LLC admitted in the agreement that it was paying inflated rent in to doctors in exchange for their referrals of patients for its diagnostic testing services.  It also paid money to the doctors through inflated hourly charges for the technicians.  The diagnostic testing services were billed to Medicare.

The company also entered into a civil settlement agreement for resolution of federal False Claims Act violations with payment of $95,000 to the federal government and a physician.

The DOJ explained in its news release:

From Jan. 1, 2015, through Dec. 31, 2018, H&D knowingly and willingly paid renumeration to referring physicians in the form of space rental payments that were above fair market value and commercially unreasonable for the purpose of inducing diagnostic testing, in violation of the federal Anti-Kickback Statute.

The civil allegations were originally made in a lawsuit filed under the whistleblower provisions of the False Claims Act brought by Dr. Richard Chesbrough. The Act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. Chesbrough will receive approximately 17 percent of the proceeds of the civil settlement.“

Defendant Benefit from DPAs: Criminal Defense Perspective

Signing a DPA is different from entering into Deferred Adjudication.  These deals with the AUSA are not probation.  They are alternative avenues that may offer significant help to those accused with serious federal felonies, particularly in complicated areas like health care fraud.

While things are made public in the form of a filed criminal complaint as well as the agreement itself (unlike an NPA), these contracts enable the accused to move forward in life with a complete dismissal of the charges once they have completed the terms of the agreement.  Also read: How Criminal Charges Get Dropped in State and Federal Cases.

For many, especially white-collar crime defendants with substantial assets and significant professional goodwill at stake, the DPA offers a pathway to freedom that can be extremely beneficial to all those involved.

To learn more about federal health care fraud allegations, see:

Federal Criminal Defense and Negotiations with Federal Prosecutors

For many professionals who find they are being targeted by federal law enforcement for possible criminal charges, the reality is hard to grasp.  Many of these white-collar matters involve very successful individuals who have spent years and years of their lives building up their personal and professional reputations.  Even the hint that they may be connected with a federal investigation can be harmful in so many ways.

Accordingly, experienced federal criminal defense lawyers welcome anyone who is even remotely suspicious that they are being eyed by federal agents for any type of wrongdoing to ask questions and seek legal counsel.  Federal matters are comprehensive, and detailed, and proficient.  It is wise to have a zealous advocate to help as soon as possible.

Early involvement of a knowledgeable federal criminal defense attorney may increase the likelihood of a successful negotiation of a deferred prosecution agreement, where the future will not include a criminal conviction.

For more:

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For more information, check out our web resources, read Michael Lowe’s Case Results, and read “The Early Part of a Texas Criminal Case in State or Federal Court.”


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