DOJ Criminal Division Initiates Self-Disclosure Pilot Program for Individuals

On April 15, 2024, the Criminal Division of the Department of Justice (DOJ) announced a new pilot program setting forth the circumstances in which it will offer non-prosecution agreements (NPAs) to individuals who voluntarily disclose original information about criminal misconduct (Pilot Program).

Key Takeaways

• The Pilot Program is the latest in a series of DOJ whistleblower programs announced in recent months, including DOJ’s whistleblower rewards program, announced in March 2024, and a whistleblower program of the U.S. Attorney’s Office for the Southern District of New York (SDNY), announced in January 2024 and enacted in February 2024 (the SDNY Program). [1] 
• Although the Pilot Program seeks to incentivize individuals to self-report and cooperate with DOJ, individuals must satisfy stringent requirements to qualify for an NPA, including self-reporting a covered offense, disclosing “original” information that was not previously known to DOJ, repaying all proceeds of the offense, and full cooperation. The requirements create risk for individuals, because even if they self‑report, they may not qualify for an NPA.
• The Pilot Program adds to the complex landscape of self-reporting. Because companies (and now individuals) receive self-reporting credit only for conduct that is not previously known to DOJ, companies must assess the risk that an employee will use the Pilot Program to report conduct to DOJ before the company does so or even is able to do so, based on the need to engage in fact‑finding before self-reporting any potential wrongdoing.
• Companies should evaluate their own whistleblower programs to ensure that those programs are up to date, well known to employees, and properly incentivize internal reporting. Companies should ensure that their policies and procedures do not improperly interfere with a whistleblower’s ability to communicate with DOJ, which could be viewed as potentially obstructive conduct.

The Pilot Program

According to DOJ, individuals will receive an NPA if they voluntarily self-disclose original, non-public, and previously unknown information about certain types of offenses and subject to the qualifications discussed below.

The information provided by the individual to DOJ must relate to the following covered offenses:

• Violations by financial institutions involving money laundering or fraud against financial institution regulators;
• Violations related to the integrity of markets;
• Violations related to foreign corruption and bribery;
• Violations related to healthcare fraud or healthcare kickbacks;
• Violations related to fraud against the United States in connection with federally funded contracting; or
• Violations related to bribe or kickback payments made to domestic officials.

In addition to subject matter limitations, there are several other significant limitations on eligibility for immunity. The Pilot Program provides that “voluntary” disclosure must be made before any government request or inquiry into the matter by an individual who has no preexisting obligation to disclose the information and in the absence of any government investigation or threat of imminent disclosure to the government or the public.

In addition, the disclosure must be “truthful and complete,” defined to require disclosure of all information known to the individual related to any misconduct in which the individual participated or is aware of, including the individual’s own role in the misconduct.

The Pilot Program further requires that the individual “fully cooperate” and provide “substantial assistance” to DOJ in its investigation, including by providing truthful and complete testimony and evidence, and if asked, cooperating proactively with law enforcement. The individual must also forfeit or disgorge profits from the misconduct.

In addition, the reporting individual must not be involved in any terrorist activity, violent crime, or sexual offenses. Nor can the individual be the leader of the misconduct under investigation, a chief executive officer, a chief financial officer, or equivalent, or a domestic government official at any level.

According to DOJ, if an individual comes forward under the Pilot Program but does not fully comply with its terms, DOJ maintains sole discretion to offer an NPA if DOJ deems it appropriate to do so.

The Pilot Program is similar to, but not entirely the same as, the SDNY Program. Both the SDNY Program and the Pilot Program offer NPAs to non-violent offenders who voluntarily self-report truthful and previously unknown information. The Pilot Program applies to certain offenses that are beyond the scope of the SDNY Program and provides more specific expectations than the SDNY Program about the nature of individual cooperation.

Conclusion

Although the Pilot Program provides an incentive for individuals to self-report potentially criminal conduct to DOJ, the requirements of the Pilot Program raise a high bar for qualifying for an NPA and create uncertainty for individuals who are evaluating whether to self-report. In addition, by encouraging individuals to self‑report, the Pilot Program places companies at greater risk of government scrutiny and further complicates already complex and fraught self-reporting decisions. Companies should evaluate their own whistleblower and compliance programs to ensure that the company is encouraging internal reporting and facilitating the identification of alleged wrongdoing before it is directly reported to DOJ.

[1] The Pilot Program does not replace DOJ Antitrust Division’s Leniency Program or apply to violations of the Sherman Act.