While companies looking to settle allegations of criminal wrongdoing may typically consider securing a non-prosecution agreement a far better deal than getting a deferred prosecution agreement, a recent analysis suggests that the differences between the two may be narrowing, lessening the advantages of one over the other.

That's according to a review of the 10 corporate DPAs and NPAs entered into by the Department of Justice during the first six months of 2009 by the law firm Gibson Dunn & Crutcher.

Both DPAs and NPAs allow companies to avoid government prosecution as long as they abide by the terms of the agreement, but under a DPA, the government files criminal charges with the court, while nothing is filed in an NPA.

While an NPA "may seem a significant victory for corporations, as they are able to successfully avoid prosecution," a July 8 GDC alert notes that "because the terms and conditions in NPAs increasingly mirror the terms and conditions in DPAs, the advantages in securing an NPA instead of a DPA are diminishing."

In the past, the terms and conditions of an NPA have been much less demanding and cumbersome than the terms and conditions in a DPA. However, GDC notes that more and more NPAs have appeared that contain terms and conditions that are as comprehensive and restrictive as terms typically reserved for DPAs.

For example, GDC notes that 2009 NPAs involving PartyGaming and NeuroMetrix contain standard terms used in the DPAs of past years, as well as those entered into in 2009, including provisions: requiring continued cooperation by the company; regarding successor protection under the agreement; waiving the statute of limitations for the stated violations; waiving challenges to the admission of evidence related to the investigation and NPA and requiring the corporation to accept as true the statement of facts in the NPA.

The alert notes that even the DoJ occasionally fails to recognize the difference between DPAs and NPAs—a trend also noted in a recent report by the Government Accountability Office, which found that since the issuance of March 2008 DoJ guidance, prosecutors have improperly labeled at least three DPAs and NPAs. Note to readers: Compliance Week will provide coverage of the GAO report in an upcoming edition.

For example, the alert points to a recent agreement between NeuroMetrix and the U.S. Attorney's Office for the District of Massachusetts which explicitly states the U.S. Attorney's Office may file criminal information in U.S. District Court charging NeuroMetrix if the company violates the agreement. And while no criminal charges were filed, the DoJ press release describes the agreement as a DPA and the terms and conditions of the agreement are as detailed and restrictive as those typically found in a DPA.

While there's a trend toward standardizing the terms and conditions of DPAs and NPAs, the GDC alert points out that there are some notable variations in the 2009 DPAs.

For instance, WellCare Health Plans agreed to "prominently post on its Website the Information, this DPA, and the Statement of Facts" for the duration of the agreement. It also agreed not to sell or transfer the corporation prior to full payment of the $80 million fine.

A DPA between Lloyds TSB Bank and the DoJ Money Laundering Section contains a term that deems a violation of a separate DPA Lloyds entered into with the New York District Attorney to be a violation of the DoJ DPA, at the DoJ's discretion.

UBS's DPA with the DoJ Tax Division and the U.S. Attorney's Office for the Southern District of Florida explicitly allows UBS to challenge a "John Doe" subpoena issued by the U.S. District Court seeking records disclosing U.S. persons who maintain accounts with UBS in Switzerland. The DPA allows UBS to use any defense, objection, or argument to resist enforcement of the subpoena, and to exhaust its appellate remedies should the corporation lose in the lower courts. "This is unusual as most DPAs require that the company not make any statement that contradicts the statement of facts in the DPA," the alert notes. UBS has resisted enforcement of the subpoena on the grounds it would force the corporation to violate Swiss privacy law. The lawsuit between the DoJ and UBS is still pending.

A similar, but more restrictive provision in the Beazer Homes DPA allows the company to dispute that the factual allegations in the criminal information or the DPA apply to a specific private civil litigant or class of litigants, but doesn't allow the company to dispute the factual allegations themselves.

"This is a fine line, and it remains to be seen how this provision will be construed in practice," GDC notes.

Finally, terms in both the UBS and Beazer Homes DPAs prohibit the corporation, with some exceptions, from re-entering the specific line of business that gave rise to the alleged violations.