As Deputy Attorney General (DAG) Lisa Monaco recently observed, “[g]oing back to the days of ‘Wanted’ posters across the Old West, law enforcement has long offered rewards to coax tipsters out of the woodwork.” On Aug. 1, 2024, the Department of Justice (DOJ or Department) joined the club of federal law enforcement agencies that have adapted this approach to white-collar crime by launching its own three-year Whistleblower Pilot Program. The Whistleblower Pilot Program will provide monetary awards to whistleblowers who provide the Department with original and truthful information about certain types of corporate misconduct that leads to a successful asset forfeiture. If the success of other government whistleblower programs, such as the one administered by the Securities and Exchange Commission (SEC), is any measure, the DOJ can be expected to see a surge of reports alleging corruption, money laundering and other corporate fraud. If this is not enough reason for companies to take a fresh look at their compliance programs to ensure they are effective at quickly detecting and remediating misconduct, the DOJ simultaneously amended the Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy (Corporate Enforcement Policy) to allow companies the opportunity for full voluntary self-disclosure benefits even after the DOJ receives a whistleblower tip — so long as the company self-reports that conduct to the DOJ within 120 days of receiving an internal report and before the DOJ contacts the company. While on the one hand, the DOJ is clearly sending a message to employees that if they see something, say something, as DAG Monaco stated to companies in no uncertain terms, “[o]ur message is equally clear: knock on our door before we knock on yours.”
As stated in the program guidance, the Whistleblower Pilot Program’s purpose is to fill gaps in the coverage of information that the DOJ has obtained and used for its investigations and prosecutions from already-existing whistleblower programs run by agencies like the SEC and the Commodity Futures Trading Commission and from individuals who bring qui tam actions under the False Claims Act (FCA). However, DAG Monaco noted that the legislative jurisdiction of these preexisting whistleblower programs is like a “patchwork quilt that doesn’t cover the whole bed. They simple don’t address the full range of corporate and financial misconduct that the [DOJ] prosecutes.” In order to do so, the DOJ designed the Whistleblower Pilot Program to encourage tips in four areas not covered by other whistleblower programs:
- Certain crimes involving nonregulated financial institutions or their insiders or agents, including schemes involving money laundering, anti-money laundering compliance violations, the registration of money-transmitting businesses and fraud violations;
- Foreign corruption by, through or related to privately held companies, including violations of the Foreign Corrupt Practices Act, the Foreign Extortion Prevention Act (FEPA) and money-laundering statutes;
- Domestic corruption violations involving companies; and
- Healthcare fraud schemes that target private insurers or nonpublic healthcare benefit programs or that defraud patients, investors or nongovernmental entities in the healthcare industry and that are not subject to qui tam recovery under the FCA. Under the program, the DOJ will use the Attorney General’s discretionary authority under 28 U.S.C. §524(c) to pay “awards for information or assistance leading to a civil or criminal forfeiture” in these areas of focus.
