On April 15, the Department of Justice (DOJ) rolled out a new Pilot Program that encourages voluntary self-disclosures by individuals in certain types of criminal conduct involving corporations. In return for a person’s cooperation, the individual may be entitled to a non-prosecution agreement (NPA). The Pilot Program provides a strong incentive for individuals to bring to the Criminal Division’s and law enforcement’s attention actionable, original information about unlawful conduct that might otherwise go undetected or be impossible to prove. The program may also incentivize companies to implement robust compliance programs.

To be eligible under the Pilot Program, the reporting individual must disclose original information, or in other words, non-public information not previously known to any component of the DOJ. The information must also relate to at least one of the following:

• Violations of financial institutions, their insiders, or agents, including schemes involving money laundering, anti-money laundering, registration of money transmitting businesses, and fraud statutes, and fraud against or compliance with financial institution regulators.
• Violations related to integrity of financial markets undertaken (1) by financial institutions, investment advisors, or investment funds, (2) by or through public companies or private companies with 50 or more employees, or (3) by any insiders or agents of any such entities.
• Violations related to foreign corruption and bribery by, through, or related to public or private companies, including violations of the Foreign Corrupt Practices Act, violations of the Foreign Extortion Prevention Act, and violations of the money laundering statutes.
• Violations related to health care fraud or illegal health care kickbacks committed by or through public companies or private companies with 50 or more employees.
• Violations by or through public or private companies with 50 or more employees related to fraud against, or the deception of, the United States in connection with federally funded contracting, where such fraud does not involve health care or illegal health care kickbacks.
• Violations committed by or through public or private companies related to the payment of bribes or kickbacks to domestic public officials.

The disclosure must be voluntary, meaning:

1. It was provided to the DOJ prior to any governmental inquiry.
2. The individual has no preexisting obligation to an agreement in connection with a criminal prosecution or civil enforcement action to report the information to the DOJ.
3. In the absence of any government investigation or threat of imminent disclosure to the government or the public. Moreover, the reporting individual must fully cooperate with the DOJ in its investigation and agree to forfeit or disgorge any profit from the criminal wrongdoing and pay restitution.

The Pilot Program guidance provides that the program does not apply to certain individuals, such as the chief executive officer or chief financial officer of a company, a government official, or to an individual with a previous felony conviction or a conviction of any kind for conduct involving fraud or dishonesty.

Read the full guidance here. If you have additional questions, please contact the authors or a member of Taft’s Compliance, Investigations, and White Collar Defense team.