/>iOn March 7, 2024, Deputy Attorney General Lisa Monaco (“DAG Monaco”) gave the keynote address at the American Bar Association’s 39th National Institute on White Collar Crime.1 She addressed the success she views in the Department of Justice’s (“DOJ”) efforts to combat white collar crime. Specifically, DAG Monaco highlighted recent convictions of executives at high-profile companies, including “dozens of executives across a range of industries, including investment firms, health care companies, and defense contractors.” Id.
DAG Monaco also emphasized the DOJ’s practice of progressive discipline. In one example, she shared how a technology company faced a harsher penalty in 2023 because it breached a Deferred Prosecution Agreement (“DPA”) agreed to in 2019. Id. The DOJ required at least a corporate guilty plea to settle that case. Similarly, a pharmaceutical company faced unique and harsh penalties in 2023 because it was a repeat offender. Id. After an investigation for price fixing, the DOJ required the company to sell off an entire product line because it had already resolved a Foreign Corrupt Practices Act (“FCPA”) violation with a DPA. Id.
In addition, DAG Monaco highlighted the impact that the DOJ claw back policy has had on incentivizing employers to comply with the law. The program permits companies to reduce criminal fines by making a good-faith effort recover, or claw back, compensation from individual wrongdoers. By providing “a dollar-for-dollar credit to companies that claw back or withhold compensation from culpable employees,” the DOJ aims to ensure that the actual wrongdoers are the ones paying for their misconduct. Id.
In addition to targeting executives and imposing harsher penalties, now the DOJ is recruiting employees to help the agency discover and punish white collar crime. DAG Monaco announced that the DOJ is implementing a pilot program that recruits employees to “blow the whistle” on their employers: “[W]e recognized there’s another way we can encourage individuals to report misconduct: by rewarding whistleblowers. And how do we do that? Money.” Id.
Comparing the program to “Wanted” posters in the Old West days, DAG Monaco views the pilot program as a way to fill the gaps in other whistleblower incentive programs used at the IRS, FinCEN, and through qui tam actions. DAG Monaco explained that the Attorney General has been authorized to pay awards for information or assistance leading to civil or criminal forfeitures for some time, but that authority has only been used occasionally and never as part of a targeted program. The pilot program’s purpose is to expand that tool and pay whistleblowers out of the funds recovered from a subsequent forfeiture, or the money gained through criminal activity that the DOJ seizes.
The DOJ has launched a 90-day window to develop the plan within the basic guardrails it has already established. It would offer payments:
• Only after all victims have been properly compensated;
• Only to those who submit truthful information not already known to the government;
• Only to those not involved in the criminal activity itself;
• And only in cases where there isn’t an existing financial disclosure incentive—including qui tam or another federal whistleblower program.
While information about any violation is accepted by the DOJ, DAG Monaco noted that the DOJ is especially interested in information about criminal abuses of the U.S. financial system, foreign corruption cases outside the jurisdiction of the SEC, and domestic corruption cases, especially those involving illegal corporate payments to government officials. The exact details of the pilot program have not been developed or disclosed.
How does this impact employers?
It may be too soon to see the immediate impact. DAG Monaco’s announcement did not change any existing laws, but it put potential whistleblowers on notice that their efforts may have additional financial benefits. Thus, DAG Monaco stressed the importance of compliance programs, stating, “I can assure you the price of committing another violation will be far higher than the cost of preventing one.” Id. DAG Monaco encouraged the use of compliance programs and self-disclosure of potential violations, which may prevent financial awards to potential whistleblowers who must be the first to report a violation. To anyone considering a potential self-disclosure, DAG Monaco gave pointed advice: “knock on our door before we knock on yours.” Id.
Now is a good time to evaluate and invest in your company’s compliance programs. Assessing current risk and appropriately investigating suspected or potential misconduct can help ensure your business is compliant with laws and regulations. The development of effective compliance programs also helps identify potential training that might be beneficial to help foster a culture of compliance, transparency, and encouraging ethical behavior.
