A wave of corporate fraud starting with the 2001 collapse of Enron Corp. has led to potent new weapons for prosecutors such as stiffer financial penalties and prison terms. The Securities and Exchange Commission has more money and manpower to pursue civil-fraud cases.
Once rare, the threat of criminal indictment of corporations themselves has become more common as the Justice Department employs what are known as deferred-prosecution agreements. A list of blue-chip American companies have submitted to these pacts, including American International Group Inc., Monsanto Co. and Time Warner Inc. Under the arrangements, the government charges the company with criminal behavior but puts the prosecution on hold in exchange for a promise of reform. At an agreed-upon date, the potential charges expire. Since 2003, there have been at least eight such pacts.
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