DOJ Provides Further Guidance On Corporate Whistleblower Awards Pilot Program

On August 1, the Department of Justice (DOJ) launched its Corporate Whistleblower Awards Pilot Program, focusing on criminal activity that largely falls outside the scope of the existing whistleblower programs—namely, the False Claims Act and the SEC, CFTC, FinCEN, and IRS whistleblower programs. While DOJ previously provided guidance and a fact sheet on the scope of the Pilot Program, many questions remain on how it will operate and the precise misconduct it covers. DOJ Criminal Chief Nicole Argentieri attempted to answer some of these questions in a recent speech she gave at NYU Law School.

In particular, she discussed the four areas of corporate crime the Pilot Program targets, each of which is a priority for DOJ criminal enforcement and none of which is covered by an existing whistleblower program:

• Foreign Corruption. Foreign bribery by companies withing the SEC’s jurisdiction are largely covered by the SEC Whistleblower Program, created as part of Dodd-Frank.  The Pilot Program goes after foreign corruption that falls outside the SEC’s sweep, principally those by companies with significant US contacts but which do not issue securities here. As one prominent example, Argentieri pointed to DOJ’s foreign bribery enforcement actions against several international commodity trading companies which resulted in more than $1.7 billion in financial penalties and forfeitures between 2017 and 2024. She stressed the renewed importance of this area of DOJ criminal enforcement following the recent enactment of the Foreign Extortion Prevention Act, which prohibits foreign officials from taking bribes from American companies.

• Financial Institution Crimes. According to Argentieri, “financial institutions are the first defense against illicit finance,” and DOJ wants whistleblowers to report those institutions that come up short in protecting against financial fraud and abuse, especially related to money laundering and other regulatory compliance failures. As recent enforcement examples, she pointed to SEC actions against Binance (failing to properly register), Danske Bank (misrepresenting anti-money laundering controls), and Rabobank (concealing deficiencies in anti-money laundering program).

• Domestic Corruption. This is an area in which DOJ is looking to expand its corporate enforcement efforts, which according to Argentieri will focus on bribing officials (at any level of government) to win a contract or otherwise secure some kind of business advantage.

• Health Care Fraud. This is another area in which Argentieri said DOJ is looking to step up its enforcement. The False Claims Act, which allows whistleblowers to bring lawsuits against those committing fraud against the government, already covers fraud on federal healthcare programs such as Medicare and Medicaid. The Pilot Program wants to bring under the whistleblower umbrella fraud against private insurers too, which Argentieri estimates at tens of billions of dollars each year.

In addition to highlighting these key areas of DOJ focus under the Pilot Program, Argentieri also reinforced DOJ’s message to companies to “invest in compliance and take internal reports of wrongdoing seriously, because we are using more tools than ever before to identify corporate misconduct.” Encouraging companies to be “good corporate citizens” by “upping the ante” with whistleblowers is all part of DOJ’s two-prong approach to rein in corporate crime. One by encouraging whistleblowers to keep a watchful eye on their employers, and two by encouraging companies to keep their own house in order and not wait for the government to come knocking.

DOJ is hoping to accomplish this in several ways. First, by incentivizing whistleblowers with higher potential rewards if they report internally before coming to the government. Second, by incentivizing companies with a so-called “presumption of declination” to self-report to the government fraud or misconduct a whistleblower brings forward internally. And third, by doing what it can to protect whistleblowers from retaliation. Argentieri was especially forceful on this last point:

Let me be clear: our prosecutors will protect whistleblowers’ identities to the fullest extent allowable under law. And if a company retaliates against a whistleblower, we will take all appropriate steps: the company will lose credit for cooperation and remediation and could face sentencing enhancements—and even prosecution—for obstruction of justice.

Argentieri ended her speech with a very simple message for companies on how best to stay out of regulatory trouble— “Do the right thing now and make the necessary compliance investments to help prevent, detect, and remediate misconduct.” In other words, provide whistleblowers with clear and safe passage to say something when they see something. And take appropriate steps to address their concerns and complaints.

The DOJ message to whistleblowers is equally clear—DOJ wants to hear from you. And is very willing to put its money where its mouth is by rewarding those willing to come forward.

So if you think you have information on fraud or misconduct that fits into DOJ’s new Pilot Program, or that might fit within one of the other whistleblower rewards programs, please do not hesitate to contact us. We will connect you with an experienced member of our whistleblower team for a free and confidential consult.

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