Washington, D.C. (August 23, 2024) - The Department of Justice's (DOJ) new Corporate Whistleblower Awards Pilot Program, announced in August 2024, is a groundbreaking initiative designed to encourage the reporting of corporate misconduct by offering significant financial incentives. The program will be administered over three years by the Money Laundering and Asset Recovery Section (MLARS) and aims to cover crimes that have historically fallen outside the scope of other federal whistleblower programs.
Under this program, individuals who provide original, voluntary, and non-public information leading to a successful criminal or civil forfeiture of over $1 million are eligible for monetary rewards. The rewards can be substantial, with whistleblowers eligible to receive up to 30% of the first $100 million in net forfeited proceeds, and decreasing percentages for amounts above this threshold. The exact amount, however, is discretionary and will be influenced by factors such as the importance of the information, the level of cooperation provided by the whistleblower, and whether the information was initially reported internally within the organization.
A key aspect of this program is the emphasis on protecting whistleblowers. Individuals can submit reports anonymously through an attorney, and the DOJ is committed to maintaining the confidentiality of whistleblowers to the greatest extent possible. Importantly, the program also seeks to deter retaliation by companies against whistleblowers, making it clear that such actions could result in the loss of cooperation credit in DOJ investigations and prosecution for obstruction of justice.
This program fills critical gaps by addressing areas not typically covered by other whistleblower programs, such as fraud involving private health insurers, financial institution crimes (including cryptocurrency), and foreign and domestic bribery. It also introduces a strict 120-day period for companies to address internal whistleblower reports before a whistleblower may approach the DOJ, thereby encouraging companies to bolster their internal compliance and reporting systems. If the company voluntarily self-reports within 120 days of receiving an internal whistleblower report and takes appropriate action, it may be eligible for a presumption that the Criminal Division will decline to prosecute, while the whistleblower can still receive a percentage of forfeited assets.
This initiative represents a significant shift in the DOJ's approach to corporate enforcement, signaling a robust commitment to holding companies accountable while offering strong protections and incentives for those who expose wrongdoing. There is every reason to believe the new program will increase whistleblower activity, as well as government investigations and enforcement actions.
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