Criminal Division Corporate Whistleblower Awards Pilot Program

Using civilians outside DOJ to assist in the fight against crime is not new.  We have seen it with the addition of Civil RICO in 1970 (18 U.S.C. 1964), and of course the government partnership with those outside the government under the False Claims Act.  We have also seen government calls to the public for information related to criminal acts, and the government's use of cooperating witnesses to secure information and testimony against other perpetrators of crimes. That said, the Criminal Division Corporate Whistleblower Awards Pilot Program has some unique aspects that could incentivize individuals to assist the government in reducing criminality.

The program guidance limits the applicable areas to:  (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 foreign corruption by companies is particularly intriguing as it can be an area difficult to obtain accurate information.  Likewise, this may be another way to infiltrate misconduct in the cryptocurrency world.

The DOJ provides FAQs for Potential Whistleblowers and also for Companies here. But is also notes that "A whistleblower award is made in the Department’s sole discretion." Finally, the DOJ announcement reminds companies that voluntary "self-report within 120 days of receiving an internal whistleblower report may be eligible for a presumption of a declination under the Criminal Divisions's Corporate Enforcement and Voluntary Self-Disclosure Policy if the company reports to the Department before the Department contacts the company." (Note -Temporary Amendment to the Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy)

It is good to see the government exploring new methods to achieve corporate compliance.  In the future evaluation of this program, it is hopeful that there will be a cost-benefit analysis to ascertain whether the program proves to be an administrative challenge for the government in comparison to the rewards of achieving compliance.  But it will be important to factor into that analysis the intangible factors of how many companies step into line just on the mere threat of possibly being caught up in this new whistleblower program. 

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