This blog post was drafted with assistance from Sean C. Church, Paralegal
On Thursday, August 1st, the Department of Justice announced a new Corporate Whistleblower Awards Pilot Program to “uncover and prosecute corporate crime.” This new program incentivizes whistleblowers with potentially very significant payouts if they provide the Criminal Division with original and truthful information about corporate misconduct, including reports of certain trade compliance violations. With this program, companies face higher risk that employees may report legal violations to the government because of the potential financial reward. We recommend that companies reexamine their trade compliance and other policies and revise them as needed to encourage employees to notify company officials, internal legal, or company trade compliance teams to potential concerns regarding non-compliance with company policies and applicable laws. This is a good opportunity to review and update company policies.
The information provided by a whistleblower must relate to one of the following areas:
a. Violations by financial institutions, their insiders, or agents, including schemes involving money laundering, anti-money laundering compliance violations, registration of money transmitting businesses, and fraud statutes, and fraud against or non-compliance with financial institution regulators (such as OFAC).
b. Violations related to foreign corruption and bribery by, through, or related to companies, including violations of the Foreign Corrupt Practices Act, violations of the Foreign Extortion Prevention Act, and violations of the money laundering statutes.
c. Violations committed by or through companies related to the payment of bribes or kickbacks to domestic public officials, including but not limited to federal, state, territorial, or local elected or appointed officials and officers or employees of any government department or agency.
d. Violations related to (a) federal health care offenses and related crimes involving private or other non-public health care benefit programs, where the overwhelming majority of claims are submitted to private or other non-public health care benefit programs, (b) fraud against patients, investors, and other non-governmental entities in the health care industry, where the overwhelming majority of the actual or intended loss was to patients, investors, and other non-governmental entities, and (c) any other federal violations involving conduct related to health care not covered by the Federal False Claims Act, 31 U.S.C. § 3729, et seq.
Companies should ensure they have fulsome internal reporting procedures to incentivize employees to report potential issues internally before going to regulators. Companies should make sure employees know that reports of potential compliance issues will be taken seriously and that whistleblowers will be protected. Companies should also be aware that any potential violations of law now face more risk of coming to DOJ’s attention given the large possible financial gain for whistleblowers.
For more on whistleblowers’ eligibility and considerations for payment, please see the guidance provided by the Department of Justice.
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