DOJ Announces Launch of New “Gap-Filling” Whistleblower Program

March 13, 2024

On March 7, 2024, Deputy Attorney General Lisa Monaco delivered the keynote remarks at the American Bar Association’s 39th National Institute on White Collar Crime. In her address, she announced a new, nationwide whistleblower rewards program that will launch as a pilot program later this year.

Noting the success of agency-specific whistleblower rewards programs within the SEC, CFTC, IRS and FinCEN, the Deputy Attorney General said that the DOJ’s new program “will fill gaps” by reaching misconduct not covered by these existing programs. The new program will reward an individual who “helps DOJ discovery significant corporate or financial misconduct—otherwise unknown to [DOJ]” by allowing them to qualify to receive a portion of the forfeiture award resulting from an enforcement action.

Although the program formally extends to significant information about any violation of federal law, it will focus on the following areas:

  • Criminal abuses of the U.S. financial system;
  • Foreign corruption cases outside the jurisdiction of the SEC, including FCPA violations by non-issuers and violations of the recently enacted Foreign Extortion Prevention Act; and
  • Domestic corruption cases, especially involving illegal corporate payments to government officials.

Individuals who bring forward original information (so are the “first in the door”) about such conduct could qualify to receive a portion of the resulting forfeiture:

  • After all victims have been properly compensated;
  • If submit truthful information not already known to the government;
  • If the whistleblower is not involved in the criminal activity itself;
  • And wherever there isn’t an existing financial disclosure incentive — including qui tam or another federal whistleblower program.

Because the DOJ’s statutory authority to pay financial rewards derives from its forfeiture authority, DOJ’s Money Laundering and Asset Recovery Section (“MLARS”) will assist with the design and launch of the new program, which is expected to take shape in the next 90 days. As with the SEC and CFTC, DOJ expects to set a minimum monetary threshold for enforcement action that makes an individual eligible for a whistleblower award.

DOJ’s announcement follows other recent initiatives designed to encourage companies to strengthen internal corporate controls and reporting systems and encourage voluntary disclosure of corporate misconduct. The U.S. Attorney’s Office for the Southern District of New York (“SDNY”) rolled out a pilot program in January 2024 that offers individuals who self-report financial fraud or public corruption a path to a non-prosecution agreement. The Deputy Attorney General noted that the new program will create another avenue for misconduct to be reported to DOJ, thereby creating a “multiplier effect” by encouraging businesses, wrongdoers, and whistleblowers to come forward as early as possible.

If you have any questions concerning the matters covered in this alert, please contact your primary attorney at Seward & Kissel, or any of the partners listed below.