Last week, the Department of Justice (DOJ) launched the Corporate Whistleblower Awards Pilot Program to help the agency ferret out corporate crime. Under the three-year pilot program, whistleblowers can be eligible for a financial reward for providing original and truthful information about corporate wrongdoing that results in a criminal or civil forfeiture greater than $1 million. Rewards can range up to 30% of the first $100 million in net proceeds and up to 5% of any net proceeds between $100 million and $500 million, not to exceed $50 million. A whistleblower award is made at DOJ’s sole discretion.
The program is targeting crimes involving:
- financial institutions and their employees, including traditional banks and cryptocurrency businesses,
- foreign corruption involving misconduct by privately held companies and others that are not issuers of U.S. securities,
- domestic corruption involving misconduct by companies and bribery of domestic public officials, and
- healthcare fraud involving directed at patients and fraud related to private insurance plans that are not subject to recovery under the False Claims Act. (See Guidance).
According to DOJ, the new program was created to capture misconduct not covered by the current whistleblower programs at the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Financial Crimes Enforcement Network (FinCEN), as well as the federal False Claims Act.
To be eligible for a reward, the information must not be public or not previously known to the DOJ, must “materially add” to whatever information the DOJ already has, and must not be provided by someone who “would be eligible for an award through another U.S. government or statutory whistleblower, qui tam, or similar program.”
Other key eligibility requirements include that the reporting individual must not be a DOJ employee or contractor; must not be a foreign official; must report the information voluntarily; and must not make any false statements to the agency. The reporting individual may have provided the information through a company’s internal reporting mechanisms before reporting to the DOJ, but the reporting individual must report the information to the DOJ within 120 days of their internal report in order to be eligible for an award.
Companies that voluntarily self-report within 120 days of receiving an internal whistleblower report may be eligible for a presumption of “declination” under the Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy. A “declination” means that a case that would have been prosecuted except for the voluntary disclosure, full cooperation, and payment, will not be pursued. To be eligible for the presumption, the company must report to DOJ before DOJ contacts the company. More information is available here.
DOJ has said the agency awards to whistleblowers will be paid from the net proceeds of total asset(s) finally forfeited and deposited in the Assets Forfeiture Fund in conjunction with each successful prosecution, corporate criminal resolution, or civil forfeiture action.
DOJ has stated that it is committed to protecting the confidentiality of whistleblowers and that it will not publicly disclose any information, including any information that could reasonably be expected to reveal the identity of a whistleblower, except as required by law or Department policy as determined by the Department in its sole discretion, unless and until required to be disclosed to a defendant in connection with a judicial or administrative proceeding. If a whistleblower prefers to remain anonymous, they must be represented by an attorney. However, before DOJ will pay an award, a whistleblower must disclose their identity to be verified by DOJ.
The initiation of the program was announced by Deputy Attorney General Lisa Monaco and Principal Deputy Assistant Attorney General Nicole M. Argentieri on August 1, 2024, after previewing the program in March. The program does not apply to reports prior to August 1, 2024.
Program guidance can be found here.
A fact sheet can be found here.
Although the new whistleblower program has not been tested yet, it may provide a viable alternative for reporting misconduct that is not covered by other whistleblower programs. Contact an experienced whistleblower attorney for a free, confidential review of your matter.
Phillips & Cohen is the most successful law firm representing whistleblowers, with recoveries from our cases totaling over $13 billion. The firm’s partners include the former first head of the SEC Office of the Whistleblower, the former director of the CFTC’s Whistleblower Office, and numerous attorneys with decades of experience representing whistleblowers.