On June 8, attorneys for the U.S. Department of Justice (DOJ) joined Dutch aerospace company Fokker Services BV (“Fokker”) in appealing the district court’s rejection of Fokker’s deferred prosecution agreement (DPA) with the DOJ. Federal prosecutors argued before the D.C. Circuit that U.S. District Judge Richard J. Leon exceeded his authority when he rejected the DPA in February 2015.
In June 2014, Fokker agreed to pay $21 million to settle charges that it had exported controlled U.S. aircraft parts to Iran, Sudan and Burma in violation of U.S. sanctions and export controls under the International Emergency Economic Powers Act. Fokker faced a potential civil penalty of $51 million. The proposed settlement provided that, if Fokker complied with all terms of the DPA, the DOJ would recommend that all related criminal charges be dismissed after 18 months.
Historically, U.S. courts have given great deference to agency discretion in approving similar DPAs between prosecutors and defendants. Judge Leon’s decision marks a sharp and unprecedented departure from established practice in rejecting the proposed DPA for Fokker. His strongly worded opinion in this case asserts that the DOJ officials have been too lenient in the proposed settlement terms by not requiring Fokker to pay a greater fine than the alleged amount of illegal revenue derived from the transactions at issue ($21 million) and failing to impose an independent monitor on the company to track and report on its implementation of terms of the DPA.
Judge Leon also criticized U.S. prosecutors for failing to pursue action against any individuals for their roles in the alleged violations and the fact that Fokker employees who were involved in the case were allowed to remain employed by the company.
It remains to be seen how the Circuit Court will rule on the appeal against Judge Leon’s decision.
For additional information regarding the Fokker case and appeal, please see:
- Treasury Announces Settlement of a Potential $51 Million Civil Liability with Fokker Services B.V. for Apparent Sanctions Violations, Office of Foreign Assets Control Press Release, June 5, 2014
- Fokker Services to Settle Sanctions Case for $21 Million, Bloomberg, June 5, 2014
- U.S. Judge Rejects Fokker Sanctions Violations Deal, The Wall Street Journal, February 2, 2015
- Fokker Sanctions Deal Is Within Feds’ Rights, DC Circ. Told, Law 360, June 8, 2015.