backOn April 15, 2024, the Criminal Division of the U.S. Department of Justice (“DOJ”) announced the launch of its Pilot Program on Voluntary Self-Disclosures for Individuals. U.S. Dep’t of Justice, The Criminal Division’s Pilot Program on Voluntary Self-Disclosures for Individuals (Apr. 15, 2024). Under the Pilot Program, the Criminal Division will offer a non-prosecution agreement (“NPA”) to individuals who are the first to voluntarily disclose original information about certain criminal misconduct, including conduct for which they are culpable. This represents a potentially significant change to the approach to encouraging individual self-disclosures and may impact the way in which companies collect and address internal complaints.
To qualify for an NPA under the Pilot Program, the information provided (1) must be truthful and complete, (2) must not be previously known to DOJ, and (3) must relate to specified categories of legal violations involving financial institutions, anti-money laundering laws, or the integrity of financial markets; foreign or domestic bribery and corruption; health care fraud; or fraud relating to federally funded contracting. Id. at 2. In addition to disgorging any profits and paying restitution, the individual must provide substantial assistance to DOJ, produce documents and evidence, and “if requested, work[] in a proactive manner under the supervision of, and in compliance with United States law enforcement officers and agents.” Id. at 3. This latter point sounds like a level up from tactics that traditionally have been used in white collar investigations. The program is not available to CEOs or CFOs or any individual who is the “organizer/leader of the scheme.” Id.
The Pilot Program appears to figure in DOJ’s recent efforts to encourage corporate self-reporting and reward whistleblowers through a “first-in-the-door strategy.” U.S. Dep’t of Justice, Deputy Attorney General Lisa Monaco Delivers Keynote Remarks at the American Bar Association’s 39th National Institute on White Collar Crime (Mar. 7, 2024). The emphasis on sharing original information creates incentives for individuals to report misconduct and to do so earlier than might otherwise happen, potentially before reporting or discussing the same internally.
As a result, the Pilot Program may influence how corporations design compliance programs and address internal complaints. The DOJ notes, in describing the program, that it “may be a particularly important incentive for companies to create compliance programs that encourage robust internal reporting of complaints, that help prevent, detect, and remediate misconduct before it begins or expands, and that allow companies to report misconduct when it occurs.” Given this emphasis, now may be a good time for companies to take a fresh look at how they triage and address internal complaints and how they approach internal investigations. For more information on these topics, please reach out to our Special Matters team.
