The US Department of Justice (“DOJ”) Criminal Division has announced a pilot program under which individuals who report corporate misconduct may be eligible for non-prosecution agreements (“NPAs”). The announcement came on the heels of the recently announced DOJ pilot program offering cash rewards for whistleblowers and is yet another tool in DOJ’s toolkit to encourage voluntary self-disclosure (“VSD”) and a culture of corporate compliance.

The Voluntary Self-Disclosures Pilot Program for Individuals will allow individuals with criminal exposure who come forward and report misconduct otherwise unknown to the US government to be eligible for receipt of an NPA, assuming they meet the DOJ’s criteria. CEOs, CFOs, high-level foreign officials, domestic officials, and individuals that organized or led criminal schemes that come forward will not be eligible for NPAs under the program. Other culpable individuals could receive an NPA if they voluntarily, truthfully, and completely self-disclose original information concerning misconduct otherwise unknown to the DOJ in “certain high-priority enforcement areas”, so long as they fully cooperate, provide substantial assistance, forfeit ill-gotten gains from the criminal activity, and compensate victims as necessary. These high-priority areas include:

• schemes involving financial institutions (including money laundering);
• schemes related to the integrity of financial markets involving financial institutions, investment advisors and funds, and public or large private companies;
• health care fraud and kickback schemes;
• federal contract fraud schemes;
• foreign corruption schemes (FCPA and FEPA violations included) and associated money-laundering; and
• domestic corruption schemes involving bribes or kickbacks paid by or through private or public companies.

Key Takeaways

This program, combined with the new Whistleblower Pilot Program, incentivizes companies to voluntarily disclose before an individual with insider knowledge reports it to DOJ—whether that individual was involved with the crime or not. VSD and whistleblower programs reward persons or entities that are first to give the US government information about corporate crime previously unknown to the DOJ.  If companies want to reap those rewards—and prevent individuals from profiting monetarily or from receipt of an NPA by reporting themselves—they are incentivized to report misconduct as soon as possible.