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A primer on deferred prosecution agreements: Oswald

By Patricia MacInnis, Senior Editor

When a company is facing criminal allegations, a deferred prosecution agreement allows it to avoid court proceedings if certain conditions are met, namely admitting to an agreed statement of facts, termination of the senior executives identified as being responsible, and paying a sizeable fine, Toronto forensic accountant and investigator Dave Oswald tells CBC.

“The company must also show a willingness to give up individuals for prosecution,” says Oswald, founder and owner of the white-collar crime investigation boutique Forensic Restitution.

He says this route is often seen as advantageous by the business as it won't be found guilty of a crime and, therefore, not prevented from bidding on government tenders.

“In terms of the integrity framework, if they go through a prosecution and are found guilty of a crime, they would not be able to tender on any government work for the next 10 years, and that would seriously impact the company,” Oswald says, adding that in the case of an organization that employs thousands of people, it’s prudent to explore such an alternative to criminal prosecution.

The federal government has been embroiled in a controversy in recent weeks over allegations it was pushing for a deferred prosecution for a large Canadian company that is charged with fraud and corruption related to its bid for an overseas contract, says the report.

The deferment of prosecutions has been in place in the U.S., the U.K, Australia and other places for years, but only became law in Canada in 2018, and is, as yet, untested here, he says.

“It’s there for a very good reason, which is not to punish a very large corporation for the acts of one or two or 20 individuals within that corporation,” Oswald says.

He further tells AdvocateDaily.com that such an arrangement is not “a complete get-out-of-jail-free card, as the business must assist in the prosecution of senior members of staff that assisted in committing the offence.

“The company must also express an interest in identifying the persons involved in the wrongdoing. This must be senior people — not the floor sweeper — and the company must be prepared to assist in the prosecution of the individuals,” Oswald says.

A key underpinning of such an agreement is that the company must prove it has dealt with the problem and has implemented measures to prevent it from happening again, he says.

“The really important question is what action has been taken in order to say that these are the only individuals who were involved, and that’s it’s not systemic in nature,” Oswald says.

It’s important to note that deferred prosecution agreements are a one-time arrangement and specific conditions must be met in order to proceed, he tells AdvocateDaily.com.

“The company must not have committed the same type of offence previously, and they must come clean on all offences committed. They are not permitted to cherry-pick offences,” Oswald says. “In order to get a deferred prosecution agreement, there must be a reasonable chance of conviction in the case and evidence that such an alternative is in the public interest.”

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