On August 1, 2024, the Department of Justice (DOJ) issued final guidance on its Corporate Whistleblower Awards Pilot Program (Program), offering financial incentives to qualifying individuals who report certain criminal conduct to the DOJ. This new guidance follows a March 7, 2024, announcement of an inchoate program by Deputy Attorney General Lisa Monaco in a speech that emphasized the expansion of credit for voluntary self-disclosure (VSD) programs. (We wrote about this prior announcement here.) 

The DOJ intends for the Program to fill gaps in existing whistleblower programs by compensating individuals who do not qualify for another federal voluntary self-disclosure program or qui tam mechanism. Under the Program, “[w]histleblowers may be eligible for an award…when they provide original, truthful information about criminal misconduct relating to one or more designated program areas that leads to a forfeiture exceeding $1,000,000 in net proceeds.” Notwithstanding this broad description of the Program, an individual seeking an award must meet very specific requirements. The Program defines who an eligible individual is, what original information is, what covered criminal conduct includes, what information leads to a forfeiture, what net proceeds are, and how a whistleblower must claim eligibility for an award. The DOJ makes abundantly clear in all Program materials that any award is at its sole discretion.

Regardless of how restrictive the qualifying criteria may be, DAG Monaco explained that the DOJ envisions the Program working in concert with other VSD programs to “create a multiplier effect that encourages both companies and individuals to tell us what they know.” In addition to multiplying sources of information, the DOJ designed the Program to pressure companies to self-report and to do so quickly so they report misconduct before individuals do. DAG Monaco emphasized, “[T]o be eligible for the most significant benefits under these disclosure programs…you have to tell us something we didn’t already know. With very few exceptions, you need to be first in the door. And when everyone needs to be first in the door, no one wants to be second. Suddenly[,] everyone is racing up the front steps, all hoping they’re the first to knock.”

Ultimately, the DOJ has implemented these programs, according to DAG Monaco, to attempt to “identify[] the most serious wrongdoers—individual and corporate” while “remind[ing] every CEO and board member in America why they need to invest in compliance and build a culture of responsible corporate citizenship.”

The Program

To be eligible for an award under the Program, an individual, alone or with others, must provide the DOJ with original information in writing that leads to criminal or civil forfeiture in excess of $1 million in net proceeds. (The DOJ requires the Program submission to be made pursuant to an intake form through which the individual certifies under penalty of perjury the elements of the submission, including the qualification for compensation.)

Individual Eligibility. The DOJ’s definition of an eligible individual has eight parts, summarized below.

• An eligible individual cannot be an entity; the reporter must be a person.
• An eligible individual must not have been eligible for an award through another federal VSD or qui tam mechanism had they reported through that mechanism.
• An eligible individual cannot be in, or directly connected to someone in, law enforcement.
• An eligible individual cannot be a foreign government official.
• An eligible individual cannot have meaningfully participated in the conduct they reported.
• An eligible individual cannot make false, fictitious, or fraudulent statements or representations, withhold significant information, use false, fictitious, or fraudulent documents, or interfere with the DOJ’s investigation. Under certain circumstances, the DOJ can impose a permanent submission bar on a person who sends submissions or applications that are frivolous or fraudulent or that otherwise hinder the effective and efficient operation of the Program.
•  An eligible person cannot have acquired the reported original information (i) from someone ineligible because of the previous four criteria (save for a limited exception) or (ii) with the intent to evade a provision of the Program.
• An eligible person cannot have provided the DOJ information before the Program’s implementation

The DOJ has prepared a FAQ section on its website and a fact sheet regarding the definitions of an eligible individual and other criteria.

Original Information. The information the individual provides must be original. First, the information must be from the individual’s independent knowledge or analysis. It cannot be derived from publicly available sources. Second, the information must be non-public and not known to the DOJ. The focus here is on the originality of the information, not whether the DOJ already has or had an open investigation relating to the information. Third, original information must materially add to the DOJ’s knowledge, either by raising a new matter or expanding the DOJ’s knowledge on an existing matter. Fourth, if the individual reports the information to an entity’s internal reporting mechanism and the entity reports that information to the DOJ itself, that individual can still claim to be a source of original information if said individual also reports the information to the DOJ within 120 days of that internal report. Under the Program, the DOJ deems the date that the individual internally reported to the entity as the individual’s reporting date to the DOJ.

A range of information does not qualify as original information. For example, information is not original if, directly or indirectly, obtained through privileged communications (absent an exception to the privilege), obtained through an individual’s role in a law firm’s representation of an entity, obtained by the individual in connection with the entity’s process for identifying, reporting, and addressing allegations of misconduct (unless certain conditions are met), or obtained in violation of federal or state law.

Covered Conduct. The Program applies to certain federal criminal laws that, according to Principal Deputy Assistant Attorney General Nicole M. Argentieri, reflect “priorit[ies] for Criminal Division prosecutors” that are not “covered by an existing whistleblower program.” Conduct covered by the Program includes:

• Violations by financial institutions, their insiders, or agents;
• Violations related to foreign corruption and bribery by, through, or related to corporate entities, violations of the Foreign Extortion Prevention Act, and violations of money laundering statutes;
• Violations by or through companies related to bribes or kickbacks to domestic public officials; and
• Violations related to (i) federal health care and related laws involving private or non-public health care benefit programs, (ii) fraud against patients, investors, or other private entities in health care, and (iii) any other federal laws involving conduct related to health care not covered by the False Claims Act.

Voluntariness. A submission must be voluntary. The submission must occur (i) before the DOJ directs a request on the relevant subject matter to the individual, (ii) when the individual does not have a preexisting reporting obligation pursuant to an agreement in connection with criminal or civil enforcement, and (iii) in the absence of a government investigation or the threat of imminent disclosure. If an individual had reported the information to the entity within 120 days of one of the above three circumstances, the submission would qualify as voluntary.

Cooperation. An individual’s obligations do not end with a submission. The individual must cooperate with the DOJ’s investigation. For example, the individual must submit to interviews, testify before a grand jury or at trial, produce documents, or make other proactive efforts.

Forfeiture. The DOJ will only award compensation under the Program in the event of a forfeiture in excess of $1 million in net proceeds arising from the submitted information. The forfeiture must result from an order, judgment, or declaration, and the assets must be deposited in the Assets Forfeiture Fund. The information must have led to or significantly contributed to the successful forfeiture.

Award Amount and Claim Process. The Program provides awards of up to 30% of the first $100 million in net proceeds forfeited, up to an additional 5% of any proceeds forfeited between $100 million and $500 million, and no additional award on net proceeds forfeited in excess of $500 million. The DOJ may split awards between multiple reporters based on its assessment of their relative contribution. Absent mitigating considerations, the Program establishes a presumption of an award at the maximum of 30% for the first $10 million in net proceeds forfeited. When determining the size of an award, the DOJ will consider increasing award amounts based on the significance of the information provided, the level of assistance offered, and engagement by the individual in the entity’s internal compliance systems and will consider decreasing award amounts based on culpability, delay, interference, and the reporter’s role, if any, in management. The Program establishes a process by which a reporter must submit an award eligibility claim within 90 days from the publication date of the relevant forfeiture. The DOJ will assess all such claims and make a final, non-reviewable, discretionary determination of any award.

Key Takeaways

• Evaluate compliance programs. Companies should evaluate the efficacy of their reporting mechanisms to ensure that whistleblowers are using them, that reports are properly escalated, and that credible reports are appropriately and timely investigated.
• Promptly investigate whistleblower internal complaints. The DOJ has attempted to incentivize whistleblowers to use companies’ internal compliance mechanisms, like reporting hotlines, by providing the possibility of greater rewards for whistleblowers who engage with the companies’ internal compliance systems.
• Promptly report whistleblower internal complaints if seeking VSD credit. The DOJ has imposed a very tight timeframe of four months for a company to make its own qualifying VSD under the Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy when an individual seeking compensation under the Program reports misconduct through the company’s internal reporting mechanism. In this situation, a company can only qualify for VSD credit if the company “(1) self-reports the conduct to the [DOJ] within 120 days of receiving the whistleblower’s submission, even if the whistleblower reports to the [DOJ] before the company does, and (2) meets the other requirements…under the policy.” 
• Be mindful of the race to the DOJ and increased reporting out. Relatedly, the Program imposes a similar four-month window for an individual to make a report to the DOJ to qualify as an original source for an award, regardless of whether the company makes its own VSD. This aspect of the Program will likely increase reporting out by individuals who are protecting their perceived interests in an award and may not be aware of whether the company has made or plans to make its own VSD.
• Engage with whistleblowers. A company conducting an investigation arising from an internal report may wish to engage with the whistleblower about its plans to seek a VSD to minimize the risk that the whistleblower will report out to the DOJ before the company is ready.