US Department of Justice Criminal Division Announces New Pilot Program Encouraging Individual Voluntary Self-Disclosures

On April 15, 2024 the Criminal Division of the US Department of Justice (“DOJ”) launched a pilot program to encourage voluntary self-disclosures by offering mandatory non-prosecution agreements (“NPAs”) to individuals who report on certain types of criminal conduct involving corporations.¹ From the date of the announcement, individuals who provide original and actionable information falling within certain categories of corporate crime, and who fully cooperate with authorities, and pay any applicable victim compensation, restitution, forfeiture, or disgorgement—including returning any ill-gotten gains—will now be offered an NPA. 

The Program is intended to provide stronger incentives for individuals to report corporate and white-collar crime. In addition, DOJ hopes that the pilot program will encourage companies to create compliance programs that promote robust internal reporting, and that are capable of preventing, detecting, and remediating misconduct before it starts or spreads.

Criteria to Receive a Non-Prosecution Agreement

The Pilot Program only applies to disclosures made directly to the Criminal Division on or after April 15, 2024, where:

• The reporter discloses original (i.e. non-public) information not known to any DOJ component, including the Criminal Division;
• The report relates to at least one of the following areas of corporate crime:
  • Violations by financial institutions, their insiders, or agents, including schemes involving money laundering, anti-money laundering, registration of money transmitting businesses, and fraud statutes, and fraud against or compliance with financial institution regulators; 
  • Violations impacting the integrity of financial markets undertaken by financial institutions, investment advisors, or investment funds; by or through public companies or private companies; or by any insiders or agents of any such entities; 
  • Foreign corruption and bribery by, through, or related to public or private companies, including violations of the Foreign Corrupt Practices Act, violations of the Foreign Extortion Prevention Act, and violations of the money laundering statutes; 
  • Health care fraud or illegal health care kickbacks committed by or through public companies or private companies; 
  • Fraud against, or the deception of, the United States in connection with federally funded contracting; and 
  • Violations committed by or through public or private companies related to the payment of bribes or kickbacks to domestic public officials. 

• The disclosure must be both:
  • voluntary, meaning before any contact by law enforcement regarding the same misconduct and in the absence of any government investigation or threat of imminent disclosure to the government or the public; and 
  • truthful and complete, including as to the complete extent of the individual’s own role in the misconduct. 

• The reporter must agree to fully cooperate with, and be willing to provide substantial assistance to, the Department in its investigation and prosecution of individuals or entities, including, but not limited to, providing testimony; producing documents, records, and other evidence; and, if requested, working under the supervision of law enforcement officers and agents; and
• The reporting individual must agree to forfeit or disgorge any profit from the criminal wrongdoing and pay restitution or victim compensation. 

Certain individuals are expressly excluded as potential reporters, including CEOs or CFOs of public or private companies, government officials at any level (foreign or domestic), those who are the “organizer/leader” of a scheme, and persons who have committed violent crimes or have prior felony convictions, or convictions for conduct involving fraud or dishonesty. Criminal Division prosecutors still retain discretion to offer an NPA to individuals in appropriate circumstances, including where the criteria above are not met in full. 

The Criminal Division has said it will collect anonymized statistical data about relevant disclosures in the coming months to determine whether to extend, modify, or end the Program. 

This announcement closely follows a number of other DOJ initiatives aimed at creating even stronger incentives to report violations promptly and assist with government investigations. This includes DOJ’s March 2024 announcement of a 90-day “sprint” to implement a new whistleblower reward program, encouraging whistleblowers to report evidence of high-priority white collar crimes with the potential to recover financial rewards from any funds forfeited as part of a resulting criminal enforcement action, recent updates to the Criminal Division’s Corporate Enforcement Policy (“CEP”), Deputy Attorney General Lisa Monaco’s announcement of a department-wide mandate directing all DOJ components involved in combatting corporate crime to promulgate voluntary disclosure policies, and US Attorney’s Offices in the Southern District of New York (“SDNY”) and Northern District of California own pilot whistleblower programs for individuals regarding certain non-violent offenses. As we observed with respect to the SDNY Whistleblower Program, DOJ’s new VSD Pilot Program creates more awareness of, and certainty regarding, incentives for taking the momentous step of self-reporting, which may make individuals more likely to self-report due to their familiarity with the Program’s benefits and provisions. As a result, DOJ’s criminal division hopes the Program will lead to more corporate criminal prosecutions over time.

 

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¹  The intake form is available here.