In another example of how the government turns to whistleblowers to help discover and shut down fraud it isn’t able to ferret out on its own, the Justice Department is launching a program this year that will grant monetary awards to whistleblowers who deliver tips on significant corporate or financial misconduct.
U.S. Deputy Attorney General Lisa Monaco announced the program during a legal conference this month. She said the goal is to address the “full range of corporate and financial misconduct that the Department prosecutes” and cover gaps left by other programs, despite their success. For example, Dodd-Frank whistleblower programs at the SEC and the CFTC have received thousands of tips and paid out hundreds of millions of dollars, but only cover misconduct within their agencies’ jurisdictions.
“Under current law, the Attorney General is authorized to pay awards for information or assistance leading to civil or criminal forfeitures. In the past, we’ve used this authority here and there — but never as part of a targeted program,” she said. “Now’s the time to expand our use of this tool in corporate misconduct cases and apply it to reward whistleblowing.”
Under the new program, Monaco said 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, including Foreign Corrupt Practices Act (FCPA) and Foreign Extortion Prevention Act violations.
- Domestic corruption cases, especially involving illegal corporate payments to government officials.
A pilot program is being implemented, Monaco said, with a formal start date later this year. She said the premise is simple: If someone helps the DOJ discover significant misconduct, then the whistleblower could qualify to receive a portion of the resulting forfeiture, with some caveats. For example, whistleblowers would only be paid after victims were compensated and only if they weren’t involved in the criminal activity. Another key exception, the whistleblower’s information must otherwise be unknown to the department to be eligible for an award.
Also, the new program would only apply in cases where there isn’t an existing financial disclosure incentive — including the False Claims Act or another federal whistleblower program.
“We intend for this pilot program to fill gaps in the existing framework of federal whistleblower programs,” Acting Assistant Attorney General Nicole Argentieri said in a speech this month. “We believe that we can make the greatest impact by offering financial incentives to disclose misconduct in areas where no such incentives currently exist.”
Monaco said the program would “drive companies to invest further in their own internal compliance and reporting systems.”
“With these announcements, our message to whistleblowers is clear: the Department of Justice wants to hear from you,” she said. “And to those considering a voluntary self-disclosure, our message is equally clear: knock on our door before we knock on yours.”
At Keller Grover, our attorneys believe whistleblowers play a crucial role in exposing fraud. We provide confidential, free consultations to advise those who have observed suspected wrongdoing and can help you determine the best path forward from the very beginning, helping you minimize the impact of reporting, protect your rights and achieve the best possible outcome for your situation.