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A Fine Business

To read to full story about the future of corporate prosecution, click here.

News of corporate fines always carries an air of finality: A company did something wrong, and they paid for it. Period. But ask a couple of fundamental questions, and you'll find it's not quite that simple:

Q: How much does the DOJ collect in corporate fines each year?

A: No one knows. According to data provided for this article, the Justice Department ordered a total of $2,209,655,765 for restitution, fines and bond forfeitures in corporate fraud cases in fiscal 2007. But that's only a fraction of the total fines the DOJ actually collected. The figure does not include penalties from Deferred Prosecution Agreements, which are increasingly the standard mode of disciplining entities, as opposed to individuals. (A DOJ spokesperson said the department doesn't have specific codes to track DPA fines.)

Q: Where does the money go?
A: "Straight fines traditionally go the U.S. Treasury," says Todd Harrison, a partner at Patton Boggs and a former federal prosecutor. "Restitution goes to the victims. But there are a number of things that have been done. In one controversial agreement from New Jersey, the company agreed to endow an ethics chair at a law school. The money can go pretty much anywhere."

Q: What happens if a company can't pay?
A: "In a plea situation a company isn't going to agree to something they can't follow up on," explains Todd Jones, a partner at Robins Kaplan Miller & Ciersi and a former U.S. Attorney. "There are situations where companies enter structured payment schedules, but if you're sitting on the government side of the table you don't want an installment plan. You want a check inked on the day of the settlement. The government does not like to fool around with collecting money."

Staff Writer

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