Expansion of DOJ White Collar Whistleblower Programs to Local US Attorney’s Offices

In August, the Department of Justice’s Criminal Division announced the launch of a Corporate Whistleblower Awards Pilot Program, building off an earlier pilot program started in the Southern District of New York to encourage employees to provide the government with information regarding corporate criminal conduct. The DOJ’s new Whistleblower Awards Program signals an increased focus on criminal prosecution of corporate criminal conduct in four areas:

1. certain crimes involving financial institutions, from traditional banks to cryptocurrency businesses, with a particular focus on conduct constituting obstruction or defrauding of financial regulators; 
2. foreign corruption involving misconduct by companies; 
3. domestic corruption involving misconduct by companies; or 
4. health care fraud schemes involving private insurance plans.

The DOJ program provides two key incentives to corporate whistleblowers. First, individuals who played no more than a “minimal role” in the criminal conduct they report may receive a percentage of assets forfeited as a result of any successful prosecution. Second, whistleblowers may also receive immunity from prosecution in the form of a non-prosecution agreement. The combination of financial incentives and possibility of avoiding prosecution provide a strong inducement to corporate employees to report potential wrongdoing directly to DOJ.

Now, only one month after DOJ announced its new program, several of the largest U.S. Attorney’s Offices across the country have announced their own Corporate Whistleblower Pilot Programs. In the past weeks, U.S. Attorney’s Offices in the Northern District of Illinois (Chicago), Central District of California (Los Angeles), Southern District of Florida (Miami) Eastern District of New York and the District of Columbia have all announced their own Pilot Programs designed to incentivize corporate whistleblowers. While there are slight differences in the elements of each of these Pilot Programs, all of these U.S. Attorney’s Office are now offering non-prosecution agreements to participants in corporate crimes who voluntarily disclose corporate wrongdoing and fully cooperate with the authorities. Each of the programs specifically encourages whistleblowing by individuals with knowledge of financial crimes, corporate crimes, health care fraud and public corruption. As with the DOJ Pilot Program, the U.S. Attorney’s Offices are implementing these programs to “(i) help law enforcement investigate and prosecute criminal conduct that might otherwise go undetected or be difficult to prove; and (ii) encourage companies to create compliance programs that help prevent, detect, and remediate misconduct.”

Collectively, the creation of the DOJ Pilot Program, in addition to the implementation of similar whistleblower programs by the U.S. Attorney’s Offices, continue to demonstrate the federal government’s focus on incentivizing companies to implement robust compliance programs, as well as DOJ’s increasing emphasis on the investigation and prosecution of corporate crime. As such, businesses should evaluate their existing compliance programs with an eye towards ensuring that employees are strongly incentivized to report suspected wrongdoing through internal channels.

For more information regarding the DOJ and U.S. Attorney Offices’ Whistleblower Pilot Programs, as well as navigating and strategizing responses to DOJ investigations and enforcement actions, please contact your Quarles attorney or:

• Eric Pruitt, Co-Chair, Government Enforcement Defense & Investigations: (312) 715-5170 / eric.pruitt@quarles.com