The DOJ’s Corporate Whistleblower Awards Pilot Program: What Employers Should Know
Mayowa Gbenro, Associate
The Criminal Division of the Department of Justice (DOJ) has launched a new Corporate Whistleblower Awards Pilot Program (the “Program”),[1] effective August 1, 2024, to enhance corporate accountability and combat corporate crime. This initiative incentivizes whistleblowers to report corporate misconduct by offering financial rewards for providing original information that leads to significant asset forfeitures. The Program is designed to fill gaps left by other whistleblower initiatives by covering a broader scope of corporate crime.
Program Rewards, Objectives, and Scope
Whistleblowers have historically played a significant role in uncovering corporate misconduct. The DOJ’s Program seeks to motivate whistleblowers to report corporate misconduct by offering awards for original information that leads to forfeitures exceeding $1 million. It targets specific areas of corporate crime, including financial institution violations (money laundering, fraud, etc.), foreign and domestic corruption and bribery, healthcare-related offenses (fraud against private health care benefit programs, patients, healthcare industry investors, etc.), and other federal violations and crimes not covered by other statutes, such as the False Claims Act or the Foreign Corrupt Practices Act. The Program offers potential financial awards for successful forfeitures, structured as follows: up to 30% of the first $100 million forfeited, and up to 5% of any net proceeds forfeited between $100 million and $500 million. No additional awards are given for amounts above $500 million. By offering these awards, the DOJ seeks to encourage more individuals to come forward with original information about corporate crimes, thus enhancing the effectiveness of federal investigations and prosecutions.
While there are existing whistleblower programs maintained by other federal agencies, such as the Securities and Exchange Commission, these programs do not cover the full scope of corporate crime that the DOJ investigates and prosecutes. The Program specifically targets those areas of corporate crime that have been difficult to address through preexisting channels, such as the criminal activities referenced above.
Self-Reporting Incentives for Companies Facing an Internal Whistleblower Complaint
The Program also provides a 120-day rule by which a company, upon receipt of an internal whistleblower complaint, has 120 days to report the issue to the DOJ to be eligible for a presumptive declination; meaning that the DOJ may decline to prosecute a company that reports to the DOJ within 120 days of receiving the complaint, and before the DOJ contacts the company about the reported violation. This rule incentivizes companies to self-report potential misconduct, allowing them to investigate the complaint and take corrective actions within this period to potentially avoid prosecution under the DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy.
Eligibility Criteria
To be eligible for rewards under the Program, whistleblowers must provide original, non-public information derived from their independent knowledge or analysis. The information must be previously unknown to the DOJ and should materially add to what the DOJ already possesses. Eligibility is restricted to individuals, not entities, and excludes those who may qualify for other government whistleblower programs or those who “meaningfully participated” in the criminal activity, unless the DOJ determines that the participation in the criminal activity was minimal. Submissions must be voluntary, truthful, and complete, with whistleblowers required to cooperate fully with the DOJ’s investigations. All reports are made and submitted under penalty of perjury, and the DOJ reserves the right to permanently bar a person from making any further whistleblower complaints under the Program if the person makes false, frivolous, or fraudulent complaints.
Employer Considerations
Given the financial incentives being offered under the Program, employers should review and enhance their internal compliance and reporting mechanisms, such as by updating policies, providing additional training, and ensuring that reporting channels for suspected corporate misconduct are accessible and confidential. Strengthening these systems may help detect and address potential misconduct before it escalates. Campbell Litigation remains available to assist employers with these and other employment-related questions as they arise.
[1]See https://www.justice.gov/criminal/criminal-division-corporate-whistleblower-awards-pilot-program.