How New Voluntary Self-Disclosure Program Excludes Whistle-Blowers from Prosecution

How New Voluntary Self-Disclosure Program Excludes Whistle-Blowers from Prosecution

Nicole Argentieri, the Assistant Attorney General for the Department of Justice (DOJ) Criminal Division, recently explained the new voluntary self-disclosure pilot program. The program will allow for the exclusion of corporate misconduct whistle-blowers from prosecution. 

This is one of the numerous DOJ programs that seek to reward individuals and corporations for self-reporting criminal activities. The DOJ is trying to encourage people with connections to corporate misconduct to self-report. 

“The reward for this is granting a Non-Prosecution Agreement, excluding the individual from prosecution. However, to become eligible for such protection, you must offer credible information on which the DOJ can take action”, says criminal defense attorney Jeffrey Lichtman of The Law Offices of Jeffrey Lichtman.

This article discusses the new voluntary self-disclosure program in detail. It highlights the eligibility criteria for the non-prosecution agreement (NPA) and examines its impact on corporate criminal law.

The Reason for the New Program

The DOJ is attempting to stamp out corporate misconduct as much as possible. The new program focuses on making individuals and corporations accountable for their activities. Thus, the department is offering an avenue for guilty individuals to come out cleanly and truthfully without fear of prosecution.

What the Voluntary Disclosure Program Entails

A voluntary disclosure is self-disclosing criminal information that any government law enforcement agency is unaware of. There are 3 criteria that guide what makes up a voluntary disclosure:

1. There is no government investigation before uncovering the information before the disclosure 
2. There is no threat of impending disclosure to the public or government
3. The whistle-blower does not have an obligation to report the information due to promises of a non-prosecution agreement on a separate criminal investigation

It is also noteworthy that the program defines those who can receive the NPA and exempts some potentially culpable individuals from receiving it. These include Chief Executive Officers, Chief Finance Officers, foreign officials with a high rank, organizers of criminal activities, and heads of criminal schemes.

Furthermore, eligibility for the non-prosecution agreement depends on the originality of the information. Originality means that the department was unaware of the information before the self-disclosure. The DOJ will grant the agreement if the information is truthful, voluntary, and original.

The DOJ mandates whistle-blowers to participate in any legal proceedings relating to the case. They must also relinquish any rewards they may have gained from the criminal scheme. In some cases, they may have to compensate victims of the criminal scheme.

Areas of Focus of the Program

The new program primarily focuses on areas involving financial misconduct in a company and seeks to uncover criminal misconduct in financial institutions and the healthcare sector. 

The program targets the following areas: money laundering, corruption schemes that negatively affect the integrity of financial markets, investment fraud, healthcare fraud, federal contract fraud schemes, bribery, kickbacks, and violation of foreign corruption acts, among many others.

Projected Impacts of the New Program

The target is to pressure companies to report criminal activities once discovered. The program rewards the first person to disclose criminal activities in the company, which may push individuals to disclose such information as soon as they discover it. 

The DOJ seeks to use this program to curtail criminal activities in financial institutions. It will also help the DOJ fight foreign corruption schemes and protect the integrity of the financial market.

The new program will impact criminal activities in the healthcare sector. The DOJ’s announced area of focus lists the healthcare industry and kickback schemes as the target of the government’s fight against financial crimes. 

Before this announcement, this government had focused on the healthcare sector. This is because the number of criminal cases in the sector has risen. However, it was challenging to pursue these cases due to COVID-19 and the change of administration.

It was common for potentially guilty individuals to refrain from self-reporting because they feared prosecution. This allowed companies to deal with these issues internally. However, the reward of the NPA increased the chances of external whistle-blowers. 

How Companies Can Get Ahead of Individual Whistle-blowers

Companies may adopt three practices to get ahead of external whistleblowing and escalate the issue internally.

Risk Assessment

Conducting a comprehensive risk assessment regularly will help manage and highlight potential risks. Companies can assess whether they comply with government regulations through this.  

Assessing transactions also helps. Risk assessment can help companies uncover misconduct. They may then decide to disclose these issues or deal with them internally.

Self-Reporting Channel

Companies must check if their self-reporting channels are effective. They must encourage a healthy speak-up culture to go with this. It is highly likely for whistle-blowers first to raise an issue internally. 

They tend to go external when there is no internal resolution. Checking the efficiency of self-reporting channels will help companies increase the number of internal whistle-blowers, especially now that the DOJ has incentivized external whistleblowing.

Dealing with Compliance Issues

Companies need to check their compliance with regulations. They must ensure that resources are channeled to detect and remediate any compliance issues. Companies must focus on complying with the following regulations: foreign corruption, fraud, and bribery schemes. A good self-reporting channel helps companies remediate any issues. 

Following New Developments

Government law enforcement or regulation agencies may issue new updates. Companies should monitor these agencies for any new developments. 

Final Words

The law is now on the side of those who want to disclose financial corporate misconduct voluntarily. Liaising with an attorney can help with the process of self-disclosure. Collaborating with a legal professional to disclose the alleged misconduct will help you stay within the confines of the law. 

As the authorities continue devising ways to sanitize the system, all hands must be on deck for this effort to yield the desired results. When you keep hiding financial crimes, the side effects will affect the entire society. 

If you want to disclose your past dealings or whistle-blow a suspicious act in your firm, a criminal defense attorney will guide you through the relevant laws to ensure compliance and the desired outcome.