The United States Department of Justice (DOJ) started a Corporate Whistleblower Awards Pilot Program to help uncover and prosecute corporate crime. Under the three-year pilot program, if a whistleblower provides the DOJ’s Criminal Division with original and truthful information about corporate misconduct that results in successful forfeiture, the whistleblower may be eligible for an award.
The Program is modeled after similar whistleblower programs run by the SEC, CFTC, and FinCEN. The criminal division of the DOJ will review the submissions and consult with the FBI in determining whether to open an investigation. If the DOJ and FBI opt to open an investigation and the investigation and prosecution lead to a forfeiture greater than $1 million, if the whistleblower meets eligibility requirement set forth by the DOJ, he or she may be eligible to receive a monetary award.
The potential award for the whistleblower will be calculated based on the “net proceeds forfeited,” defined as the value of any assets the DOJ forfeits after compensating eligible individual victims and paying other costs associated with the forfeiture. Whistleblowers may be able to receive up to 30% of the first $100 million in net proceeds forfeited and up to 5% of any net proceeds forfeited between $100 million and $500 million. The percentage paid to the whistleblower will be calculated by the DOJ based on various factors, including the usefulness of the provided information and the level of assistance provided.
Additionally, for companies that voluntarily self-report within 120 days of receiving an internal whistleblower report, they may be eligible for a presumption of a declination under the DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy if the company reports to the DOJ before the DOJ contacts the company.
The program emphasizes internal compliance programs of companies’, designing the program to encourage employees to report misconduct internally before submitting information to the DOJ, including adding internal reports as a factor that may increase the ultimate whistleblower award.
Importantly, the DOJ program prohibits payments going to any whistleblower who meaningfully participated in the criminal activity they report. There is a separate program for individuals to report previously undetected corporate misconduct if they face criminal liability for their actions, and under that program, the individual may be eligible for a non-prosecution agreement.
To qualify for the program, the information provided must relate to one of the following areas: (1) certain crimes involving financial institutions, from traditional banks to cryptocurrency businesses; (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 plans to evaluate the program on a regular basis to determine whether adjustments are needed, including soliciting feedback from stakeholders throughout the pilot program.
According to the DOJ, submissions are confidential to the fullest extent of the law. Going a step further, if the DOJ learns that any person or entity tries to prevent a whistleblower from sharing information about potential crimes, DOJ will take all appropriate action, including possibly opening a criminal investigation into obstruction of justice.