Our White Collar, Government & Internal Investigations Team examines a plethora of new whistleblower pilot programs from federal prosecutors across the country.
- The latest DOJ efforts to incentivize reporting of corporate misconduct
- All offer non-prosecution agreements rather than monetary rewards
- Offices can be flexible with their eligibility criteria, but certain people are categorically excluded
In recent days, eight U.S. Attorneys’ Offices – covering many of the largest cities in the country – have issued “pilot programs” to incentivize reporting of corporate criminal wrongdoing. These follow similar programs issued by the U.S. Attorneys’ Offices for the Southern District of New York (SDNY), the Northern District of California (NDCA), and the Department of Justice’s Criminal Division earlier this year (discussed in a prior Alston & Bird advisory available here).
These new policies issued by the U.S. Attorneys’ Offices in the Central District of California (CDCA), Southern District of Florida (SDFL), District of New Jersey (DNJ), Eastern District of Virginia (EDVA), Northern District of Illinois (NDIL), Southern District of Texas (SDTX), Eastern District of New York (EDNY), and District of Columbia (DC) are effective immediately and will run indefinitely (with the exception of NDIL, which disclosed its program will end on March 16, 2025, when, depending on the success of the program, the office will determine whether to extend it permanently).
These programs – which offer non-prosecution agreements to potentially culpable individuals who self-report certain types of corporate misconduct – should not be confused with another recent DOJ initiative, the Corporate Whistleblower Awards Pilot Program announced by the Criminal Division on August 1, 2024 (and analyzed in a prior Alston & Bird advisory available here), which offers monetary rewards, rather than non-prosecution coverage, to those reporting corporate misconduct.
Similarities and Differences Among the Programs
While there are many similarities between the U.S. Attorneys’ Offices’ and Criminal Division programs, important differences exist between the types of conduct certain offices express interest in and the requirements reporting individuals must meet.
Conduct of interest
The U.S. Attorneys’ Offices’ and Criminal Division programs all seek information about corporate criminal wrongdoing; the NDIL program does not provide any specifics about the types of corporate wrongdoing it targets, but all the other programs explicitly focus on conduct involving some or all of the following: fraud, corporate control failures, market integrity, state or local bribery, and fraud relating to federal, state, or local funds. As described in our prior advisory, the Criminal Division specifies additional criteria for the information it seeks, and while most of the programs only express interest in corporate conduct, others are more expansive: the DNJ also solicits “information regarding criminal conduct” in general, the EDNY also solicits “information regarding … criminal conduct undertaken by two or more individuals,” and the Criminal Division also solicits information about individual criminal conduct involving money laundering or market integrity.
Certain offices explicitly state interest in other specific areas of misconduct, with (1) the EDNY and NDCA expressly requesting information on intellectual property theft; (2) the EDNY explicitly seeking information on obstruction of justice, perjury, or false statements, health care fraud, and money laundering; and (3) the DNJ explicitly seeking information on health care fraud and civil rights violations. Like the SDNY and NDCA programs, all of these newly announced programs expressly disavow interest in information about certain types of conduct, including federal tax offenses, federal environmental crimes, and violations of the Foreign Corrupt Practices Act, recognizing DOJ policy that confers primacy in such areas to specific components of the DOJ.
Eligibility requirements
Each office’s program includes a list of criteria that reporting individuals must meet to be eligible for a non-prosecution agreement, including:
- The misconduct has not previously been made public and is not already known to the particular office or to any component of the DOJ.
- The individual discloses the criminal conduct voluntarily and not in response to a government inquiry or obligation to report misconduct and before imminent threat of disclosure or government investigation.
- The individual is able to provide substantial assistance in the investigation and prosecution of one or more equally or more culpable persons and is prepared to cooperate fully.
- The individual truthfully and completely discloses all criminal conduct the individual has participated in and the individual is aware of.
All the U.S. Attorneys’ Offices’ and Criminal Division’s programs also identify circumstances in which the office receiving a report may, in its discretion, offer a reporting individual a non-prosecution agreement even if all the conditions are not met. While these circumstances are generally consistent across the programs, the EDNY program also considers (1) “[w]hether the individual is located outside the United States of America and is likely to remain outside of the United States of America”; (2) “[w]hether the individual has information about individual(s) or an entity or entities located outside the United States of America and could provide substantial assistance in the investigation and prosecution of such individual(s) or entity or entities”; and (3) “[w]hether the individual has information about criminal conduct by a federal elected or appointed and confirmed official.”
Notably, the SDTX’s program allows “business organizations,” as well as individuals, to qualify for a non-prosecution agreement; neither the other U.S. Attorneys’ Offices’ programs nor the Criminal Division’s program are available to companies.
Payment requirements
All the U.S. Attorneys’ Offices, except the CDCA, and the Criminal Division also require that to receive a non-prosecution agreement, a reporting individual must forfeit or disgorge any proceeds from the reported wrongdoing. The EDNY, NDIL, SDTX, DC, EDVA, DNJ, SDFL, and Criminal Division programs also require the reporting individual to pay restitution to victims.
Excluded persons
All the U.S. Attorneys’ Offices’ and Criminal Division’s programs categorically exclude certain individuals from program eligibility, including federal and foreign officials, federal law enforcement agents, high-ranking personnel in the organization where the misconduct occurred, and individuals who previously have engaged in certain types of criminal conduct. The SDTX, EDNY, DC, EDVA, DNJ, and Criminal Division programs also explicitly exclude individuals who led or organized the criminal conduct, and the SDTX’s program excludes from eligibility “a person who otherwise is, or is expected to become, of major public interest” (this exclusion previously appeared in the SDNY’s program, but has been removed).
More Incentives for Individuals Means Less Time for Companies
This proliferation of incentive programs across DOJ offices signals an ongoing and increasing appetite at the DOJ for corporate criminal investigations and enforcement, and recent statements by senior DOJ officials suggest that these and similar programs are already yielding significant results for the DOJ. Companies have less time than ever before to identify and assess internal conduct ahead of DOJ scrutiny and accordingly must ensure sufficient compliance and internal control investments are made to ensure maximum prevention and detection capability. As the head of the Criminal Division stated in a recent speech, “now is the time to make the necessary compliance investments to help prevent, detect, and remediate misconduct,” and as the end of the year approaches, companies can expect and should prepare for increased DOJ corporate criminal enforcement activity.
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