DOJ Launches Voluntary Self-Disclosure Pilot Program for Individuals Involved in Criminal Corporate Conduct

At a Glance

• Currently the program has seven key limiting criteria, focused on both the contents and context of the disclosure, and the identity and criminal history of the disclosing individual.
• While the DOJ has touted the “transparency” of the program, certain details, particularly regarding the “original” and “voluntary” requirements, appear either unavailable or uncertain.

On April 15, 2024, the Department of Justice rolled out its most recent installment in a series of policies and programs aimed at furthering the Biden administration’s self-disclosure initiative, officially launching a pilot program that offers qualifying individuals the opportunity to enter into nonprosecution agreements (NPAs) in exchange for voluntarily self-disclosing certain types of corporate criminal conduct in which they were involved.

Seven Limiting Criteria

Although the DOJ has left open the possibility of modifying (or extending or terminating) it at a later date, currently the program has seven key limiting criteria, focused on both the contents and context of the disclosure, and the identity and criminal history of the disclosing individual. To be eligible for an NDA under the program:

1. Disclosure must be of original information — i.e., information that is nonpublic and not already known to any segment of the DOJ.
2. Disclosure must relate to at least one of certain specified financial, foreign corruption, health care, fraud or bribery crimes.
3. Disclosure must be voluntary and precede a government investigation and request, and the disclosing individual must not be under a pre-existing obligation to report the information to the government.
4. Disclosure must be both complete and truthful, including a provision of information concerning the individual’s own involvement in the crime.
5. The individual must agree to provide full cooperation and substantial assistance to the DOJ and its investigation of the misconduct and “prosecution of equally or more culpable individuals or entities.”
6. The individual must forfeit any financial gains from the crime and pay restitution / victim compensation.
7. The individual (a) must not have engaged in certain other criminal conduct (such as terrorism, sexual offenses or violent crimes); (b) cannot be the CEO or CFO of a public or private company or be the leader of the criminal scheme at issue; (c) cannot be a government official, whether domestic or foreign; and (d) cannot be a convicted felon or have been convicted of a crime involving fraud or dishonesty.

Analysis

The DOJ hopes that the program, which comes on the heels of a new safe harbor policy applicable to the mergers and acquisitions process and the announcement of a whistleblower reward payment plan, will both “provide a strong incentive for individuals to bring to the Criminal Division’s and law enforcement’s attention actionable, original information about criminal conduct that might otherwise go undetected or be impossible to prove” and incentivize companies to create and expand their compliance programs.

However, while the DOJ has touted the “transparency” of the program, certain details, particularly regarding the “original” and “voluntary” requirements, appear either unavailable or uncertain. For example, it remains unclear how an individual could be certain, prior to disclosure, that the information they will provide is not already known to the government, that a government investigation is not already underway, or that the same information is not under a separate “imminent threat” of disclosure. Without further guidance, these answers may only be learned through practice. Accordingly, decisions to take advantage of the program will require careful analysis for otherwise culpable individuals.

For More Information

We will continue to monitor developments regarding this pilot program as well as the other steps the DOJ is taking to increase self-disclosure of criminal corporate misconduct. In the meantime, please do not hesitate to contact us if you have any questions.