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August 14, 2024
The United States Department of Justice’s Criminal Division has launched a Corporate Whistleblower Awards Pilot Program – effective August 1, 2024 – to uncover and prosecute corporate crime. If a whistleblower provides to the Department of Justice (DOJ) original and truthful information about corporate misconduct resulting in successful prosecution that includes criminal or civil forfeiture of assets greater than $1 million, the whistleblower may be eligible, at the DOJ’s discretion, for an award of a percentage of the forfeited assets, provided the whistleblower meets certain eligibility criteria.
The whistleblower’s information must relate to one of the following areas[1]:
The DOJ is committed to protecting the whistleblower’s confidentiality. It also will take appropriate steps to address situations where an individual or entity takes action to prevent a whistleblower from sharing information with the DOJ about potential crimes.
To ensure that criminals do not profit from whistleblowing, the program prohibits payments to any whistleblower who meaningfully participated in the criminal activity that they report.
The whistleblower program is designed to encourage employees to report misconduct internally before submitting a report to the DOJ. For example, an employee who reports misconduct through internal company systems still can seek and obtain a whistleblower award from the DOJ, provided that the employee submits the information to the DOJ within 120 days of their internal report. Internal reports may be a factor that increases a whistleblower award to an employee.
Companies also benefit from prompt reporting. If a company receives a whistleblower’s internal report and then self-discloses the allegations to the DOJ within 120 days (and before the DOJ contacts the company), the company remains eligible for the Voluntary Disclosure Program, which limits the company’s exposure for the misconduct if they cooperate with any investigation and timely and appropriately remediate the misconduct.
Employers: This pilot program serves as another reminder of the DOJ’s continued focus on corporate crime. Promote your internal compliance programs to encourage employees to raise concerns internally. Then, strongly consider self-reporting to limit exposure on allegations of misconduct. Seek legal counsel for help.
This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice. Always consult an attorney with specific legal issues.
[1] The DOJ’s program covers misconduct that is not already covered by whistleblower programs run by the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Financial Crimes Enforcement Network (FinCEN).
[2] Qui tam is a type of lawsuit that allows a private person to prosecute for the government and receive a reward.
[3] The False Claims Act is a federal law that imposes liability on individuals and companies who defraud governmental programs.
