Criminal Division’s Voluntary Self-Disclosures Pilot Program for Individuals

Combating corporate crime is one of the Criminal Division’s top priorities. We are focused on identifying the most serious misconduct and holding wrongdoers accountable.

Of course, companies act only through individuals, and we cannot put companies in jail. So, we are using all available tools to identify and prosecute the most culpable individuals for corporate misconduct.

Sometimes, the best evidence of corporate wrongdoing involves a company insider. Our experience shows that individuals who are involved in criminal conduct and are willing to accept responsibility and cooperate with us are critical sources of information.

This is true whether the criminal scheme is hatched on the street or in the C suite. Culpable individuals who are able to provide first-hand testimony about corporate misconduct are often the best source of credible and actionable information. Their cooperation can play an essential part in rooting out misconduct and prosecuting other criminal actors.

To put us in the best position to enforce the law and hold culpable individuals and corporations accountable, we are using longstanding law enforcement tools to encourage corporate insiders not only to cooperate, but to come forward and disclose corporate wrongdoing before we discover it through other means.

To provide clear incentives and encourage individuals to come forward, earlier this week I announced a new Criminal Division pilot program on voluntary self-disclosures for individuals.

Under this pilot program, individuals with criminal exposure—not including CEOs, CFOs, high-level foreign officials, domestic officials at any level, or individuals who organized or led the criminal scheme—who come forward and report misconduct that was otherwise unknown to the department will be eligible to receive a non-prosecution agreement (NPA) if they meet certain criteria.

NPAs have been a part of the federal criminal system for decades, and prosecutors have long exercised discretion to offer NPAs as an essential tool to get culpable individuals in the door. Our new individual self-disclosure pilot program, which provides clear guidelines and threshold criteria, builds on the department’s longstanding practice to advance our fight against complex corporate crime. At bottom, making NPAs available to individuals who come forward to report corporate crime and cooperate allows us to prosecute more culpable individuals and to hold companies to account.

Under the new program, culpable individuals will receive an NPA if they (1) voluntarily, (2) truthfully, and (3) completely self-disclose original information regarding misconduct that was unknown to the department in certain high-priority enforcement areas, (4) fully cooperate and are able to provide substantial assistance against those equally or more culpable, and (5) forfeit any ill-gotten gains and compensate victims. The pilot program is designed to provide predictability and certainty by offering a pathway for culpable individuals to receive an NPA for truthful and complete self-disclosure to the department.

The pilot program seeks disclosures in certain core enforcement areas for the Criminal Division, and in particular for our Fraud Section, our Money Laundering and Asset Recovery Section, and our Public Integrity Section. Specifically, the program is open to individuals who provide disclosures involving the following:

• Schemes involving financial institutions—including money laundering and criminal compliance-related schemes;
• Schemes related to the integrity of financial markets involving financial institutions, investment advisors or funds, or public or large private companies;
• Foreign corruption schemes, including violations of the Foreign Corrupt Practices Act, Foreign Extortion Prevention Act, and associated money laundering;
• Health care fraud and kickback schemes;
• Federal contract fraud schemes; and
• Domestic corruption schemes involving bribes or kickbacks paid by or through public or private companies.

In addition, as in our Corporate Enforcement Policy, the individual’s self-disclosure must be to the Criminal Division, and it must be voluntary. This means the disclosure must happen in the absence of any government investigation, before the department or any federal law enforcement, regulatory, or civil enforcement agency makes a request related to the subject matter of the disclosure, and before the threat of imminent disclosure to the government or the public. Also, the individual must not have a preexisting obligation to report the information to the department or any federal law enforcement, regulatory, or civil enforcement agency pursuant to a plea agreement, NPA, or similar agreement.

At the same time, individuals must provide truthful and complete disclosure of all information known to the individual about misconduct—including the complete extent of the individual’s involvement. This means full disclosure of all activity in which the individual participated or of which the individual is aware.

Individuals must also fully cooperate with prosecutors and provide substantial assistance to the department. This includes assistance in the investigation and prosecution of those equally or more culpable—whether by providing truthful and complete testimony, producing documents and other evidence, or working proactively under the supervision of law enforcement.

Finally, in order to qualify for an NPA, the individual must agree to forfeit or disgorge any profits or ill-gotten gains and provide restitution to victims.

As with any other program, there are some disqualifications. NPAs will not be available under the program for individuals who have engaged in certain types of criminal conduct or who have prior felony convictions or any conviction involving fraud or dishonesty. And again, this program is also not available for CEOs, CFOs, high-level foreign officials, domestic officials at any level, or individuals who organized or led the criminal scheme.

There is another potential benefit to this pilot program. By providing incentives to the first person to report misconduct to the government, it puts pressure on everyone—including companies—to disclose misconduct as soon as they learn about it. As Deputy Attorney General Lisa Monaco said earlier this year, “when everyone needs to be first in the door, no one wants to be second.” And that increases the likelihood the department will learn about serious misconduct that might have gone otherwise undetected.

Indeed, we understand that when companies are deciding whether to make a voluntary self-disclosure, they assess not only the benefits of self-reporting laid out in our Corporate Enforcement Policy, but also the risk that the department will learn about the misconduct from other sources. The department is upping the ante in that calculus by increasing the incentives for individuals to come forward.

We have a web page dedicated to this pilot program that tells you how it works. It’s easy to find.

The Criminal Division’s policies relating to corporate enforcement help us achieve our top priority: holding culpable individuals accountable for their criminal acts. This individual voluntary self-disclosure pilot program will reinforce our existing corporate voluntary self-disclosure program and our developing whistleblower program, helping to expose criminal schemes.

Our message is clear: we will use every tool at our disposal to uncover criminal conduct.

Company executives and leadership have an opportunity to do the right thing now and make the necessary compliance investments to help prevent, detect, and remediate misconduct. And when misconduct occurs and companies are considering whether to make a self-report, know that we now have more ways than ever to uncover misconduct.

With this announcement, we are telling employees everywhere—at nearly every level of an organization—if you’ve been involved in crime, now is your time to come forward to the Criminal Division. Call us before we call you.