DOJ Launches Pilot Program Offering Nonprosecution Agreements to Corporate Whistleblowers

The Department of Justice (DOJ) has initiated a novel pilot program designed to incentivize corporate executives to voluntarily disclose their involvement in financial misconduct, offering the possibility of a nonprosecution agreement (NPA) as a reward for cooperation with agency investigations. Unveiled on Monday, the program aims to create a strong incentive for executives to provide actionable information about criminal conduct that might otherwise remain undetected or difficult to prove.

This initiative provides potential whistleblowers with a new avenue to report various types of financial wrongdoing, including fraud, money laundering, market manipulation, foreign corruption, healthcare fraud, illegal kickbacks, and fraud related to federally funded contracting. To qualify for an NPA, whistleblowers must disclose original information regarding financial misconduct that is not already known to the DOJ. The disclosure must be voluntary and truthful, and the individual must not be under federal investigation or have a prior agreement related to the misconduct.

Moreover, whistleblowers must agree to fully cooperate with the DOJ's investigation and provide substantial assistance. They are also required to forfeit any profits generated from their misconduct. However, the program has certain exclusions, including company CEOs, CFOs, scheme organizers, elected or appointed foreign officials, law enforcement officials, and individuals with felony convictions or a history of violent conduct.

The DOJ anticipates that the program will yield more actionable tips on financial misconduct. Additionally, it believes that the existence of the program may encourage companies to develop robust compliance programs that facilitate internal reporting and help prevent, detect, and remediate misconduct.

This NPA pilot program complements the DOJ's forthcoming whistleblower reward pilot program, which will offer financial incentives to whistleblowers not directly involved in the misconduct under investigation, akin to existing programs at the Securities and Exchange Commission and the Commodity Futures Trading Commission. The NPA pilot program is effective immediately and applies only to disclosures made after its launch. The DOJ has also provided an intake form for whistleblowers to report misconduct in which they were involved.

By fLEXI tEAM