The Department of Justice (DOJ) has unveiled a new three-year pilot program designed to incentivize individuals to report corporate misconduct. This initiative, modeled after similar programs at the Securities and Exchange Commission, Commodity Futures Trading Commission, and Financial Crimes Enforcement Network, aims to encourage the reporting of significant corporate wrongdoing.
Under the new program, whistleblowers who provide original and truthful information about criminal misconduct related to a designated DOJ program area, such as federal healthcare offenses, can receive financial awards. To qualify for an award, the information must lead to a criminal forfeiture exceeding $1 million, net of victim compensation and forfeiture costs.
To be eligible for an award, whistleblowers must meet several requirements noted below:
- Come forward voluntarily with new information that is independently obtained, not privileged, and not otherwise illegal or ineligible.
- Report to the DOJ within 120 days of the initial report through internal channels. The 120-day window also applies to corporate self-disclosure.
- Must cooperate by providing testimony and evidence.
The DOJ will limit whistleblower awards to the amounts recovered through criminal or civil forfeiture proceedings related to corporate criminal conduct. The awards can be adjusted based on the whistleblower's cooperation in company investigations and their involvement in the criminal conduct. However, even if the whistleblower was involved in the criminal conduct, they may still receive a non-prosecution agreement.
The DOJ's new program could have significant implications for both corporations and individuals. It may lead to an increase in the number of whistleblowers coming forward, as well as a focus on new areas of corporate misconduct. Additionally, the program could encourage corporations to conduct more timely and thorough internal investigations to identify and address potential wrongdoing. However, it may also increase the risk of disclosure of privileged communications.
