Source: United States Department of Justice Criminal Division
Good evening. Thank you for the invitation to be with you tonight and for the warm welcome back to NYU School of Law. It’s always a pleasure to be here with so many prominent members of the white-collar bar and corporate compliance community. And a special thank you to the students who are attending. I always enjoy the opportunity to participate in events hosted by the Program on Corporate Compliance and Enforcement. The Program fosters critical dialogue about issues facing the business, compliance, and legal communities, including good corporate governance and effective compliance practices and enforcement strategies. I appreciate the opportunity to speak with you tonight about the newest tool in the Justice Department’s corporate enforcement toolbox: The Criminal Division Corporate Whistleblower Awards Pilot Program.
The Criminal Division is on the front lines of the department’s efforts to hold culpable individuals and companies accountable for corporate crime. We also lead the way in developing innovative policies designed to enhance the department’s work and encourage companies to be good corporate citizens. The Corporate Whistleblower Awards Pilot Program is a critical new tool in these efforts. With this Pilot Program, we are telling individuals who know about corporate misconduct: our tip line is open, so if you see something, say something. We are also sending a message to company executives and leadership: invest in compliance and take internal reports of wrongdoing seriously, because we are using more tools than ever before to identify corporate misconduct.
Companies play a critical role as the first line of defense against corporate crime. That is why we are focused on corporate accountability and corporate enforcement policies that create strong incentives for companies to take compliance seriously. A robust compliance program can prevent criminal activity and allow a company to detect and effectively address misconduct when it occurs. Our corporate enforcement policies are designed to encourage companies to invest in making their compliance programs effective — from hiring capable compliance officers and staff to empowering those individuals to have a real voice in the company and its culture to holding accountable individuals who engage in wrongdoing by having them face real consequences in their performance evaluations and compensation. These policies also create incentives for companies to step up and own up when misconduct occurs. We reward companies that do the right thing by making voluntary self-disclosures of misconduct and cooperating with our investigations because that helps us achieve our top priority — holding culpable individuals accountable for their crimes. The sooner we learn of misconduct, the faster we can jumpstart our own, independent investigations into the individuals responsible for the misconduct.
We understand that when companies are deciding whether to make a voluntary self-disclosure, they assess not only the benefits of self-reporting under our policies, 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 others to come forward. We know from our own experience — and from the experiences of our regulatory partners — that whistleblowers are key to uncovering corporate crime.
Encouraging companies to be good corporate citizens and promoting individual accountability are two key drivers of our whistleblower program and the Criminal Division Pilot Program on Voluntary Self-Disclosures for Individuals that we announced here at NYU earlier this year. Under the whistleblower program, individuals who know about and come forward to report corporate crime that results in forfeiture could get paid a portion of the recovery from the case, so long as they didn’t play a meaningful role in the misconduct. And under our Pilot Program on Voluntary Self-Disclosures for Individuals, individuals with criminal exposure who come forward and report misconduct will receive a non-prosecution agreement if they meet certain criteria.
Together, our corporate voluntary self-disclosure policy, our whistleblower pilot program, and our individual voluntary self-disclosure pilot are mutually reinforcing. Through these policies, we are encouraging both companies and individuals to come forward with information about wrongdoing, increasing the incentives for corporations to improve compliance and internal reporting systems, and ensuring that we get the information we need to hold criminal actors accountable.
Let me take a minute to explain how we got here and to highlight the focus of our whistleblower program. Whistleblower programs at other agencies — including the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission, the IRS, and Financial Crimes Enforcement Network — have received thousands of tips, paid out hundreds of millions of dollars in awards, and resulted in holding culpable actors accountable for misconduct. And at the Justice Department, qui tams have resulted in identification of scores of fraud cases brought under the False Claims Act. The department has used whistleblower information from these programs to build successful individual and corporate prosecutions. But these programs do not cover the full range of white collar and corporate misconduct that the department prosecutes. Our Corporate Whistleblower Awards Pilot Program seeks to fill those gaps.
Our Pilot Program covers four areas of corporate crime. Each is a priority for Criminal Division prosecutors, and none is covered by an existing whistleblower program.
First, foreign corruption. Some foreign corruption cases are covered by the SEC’s whistleblower program, but many of the foreign corruption cases we prosecute are not. Take our cases involving bribery at international commodity trading companies, which resulted in six corporate resolutions, convictions of 20 individuals, and over $1.7 billion in financial penalties including forfeiture between 2017 and 2024. None of those companies issued securities in the United States, so none of them was covered by the SEC’s program. Our whistleblower program would reach that type of foreign corruption and help ensure accountability for corporate wrongdoers. This effort is all the more important given the recent enactment of the Foreign Extortion Prevention Act — which we plan to vigorously enforce.
Second, crimes involving financial institutions. Financial institutions are the first defense against illicit finance, and we want whistleblowers to report abuses of the financial system that are not covered by existing whistleblower programs. This includes cases like Binance — a cryptocurrency exchange that did business in the United States but failed to register with financial regulators and comply with U.S. law. It also includes efforts to access services from U.S. financial institutions through fraud, like Danske Bank, which did business with U.S. financial institutions by misrepresenting the nature of anti-money laundering controls it had to address certain high-risk customers. And it includes cases like Rabobank, which sought to obstruct and defraud its primary banking regulator by concealing deficiencies in its anti-money laundering program.
These are two areas where we are already actively pursuing corporate cases and have been for years. Our whistleblower program will also target two areas where we are looking to expand our corporate enforcement efforts: corrupt conduct here in the United States — such as where a company, acting through its employees or agents, bribes a government official to win a contract — and health care fraud schemes focused on private insurers. Fraud on federal health care benefit programs is already covered by the Civil Division’s qui tam program — and we have no intention of interfering with that highly successful program. But there is no comparable whistleblower program for fraud schemes targeting private insurers, even though estimates show tens of billions of dollars in fraud on private insurers each year.
Let me now take a few minutes to talk about how our program will work in practice. As you know, earlier this year, Deputy Attorney General Monaco asked the Criminal Division to lead a policy “sprint” to develop and implement a whistleblower program that would encourage individuals with information about corporate crime to come forward. Our Money Laundering and Asset Recovery Section and our Fraud Section led that effort. They engaged with a broad swath of stakeholders both within and outside the department, including officials at other agencies’ whistleblower offices, whistleblower advocates, in-house compliance personnel, white-collar defense attorneys, and academics who specialize in corporate enforcement. We received critical input from dozens of experts on design, implementation, and best practices.
Our program is based on existing statutory authority — Section 524(c) of Title 28 of the U.S. Code — which authorizes the Attorney General to pay awards for information or assistance leading to civil or criminal forfeiture. The department has used this authority in the past, but not in a programmatic way and not with a focus on corporate enforcement. Under our whistleblower program, individuals who come forward with original, truthful, and complete information about corporate misconduct in one of our four program areas can qualify for a monetary award paid out of forfeitures obtained as a result of the tip. Whistleblowers will be eligible to receive an award of up to 30% of the first $100 million of net assets forfeited, and up to 5% of the net assets forfeited between $100 million and $500 million.
Our program prohibits payments to any whistleblower who meaningfully participated in the criminal activity they report. In short, individuals are eligible for awards if they are no more than “minimal participants” in criminal activity — defined in the U.S. Sentencing Guidelines as individuals who are “plainly among the least culpable of those involved in the conduct of a group.”
We have a separate program to encourage individuals who played a meaningful role in criminal conduct to come forward. Under our Pilot Program on Voluntary Self-Disclosures for Individuals, which we announced earlier this year, we provide a clear and transparent path to a non-prosecution agreement for culpable individuals who come forward to report misconduct and cooperate.
Let me turn now to internal reporting and what our whistleblower program means for companies. Through our whistleblower awards program, we are not only incentivizing individuals to come forward and report corporate crime to the department. We are also encouraging individuals to use internal company reporting procedures. Making an internal report before coming forward to the department is a factor that will increase the amount of a whistleblower award.
We are also incentivizing companies to invest in strong internal reporting structures and to report crime when they learn about it. Alongside our whistleblower program, we announced an amendment to our Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP). Under that amendment, where a company receives an internal report from a whistleblower, if the company comes forward and reports the misconduct to the department within 120 days and before the department reaches out to the company, the company will be eligible for the greatest benefit under our policy — a presumption of a declination — so long as they fully cooperate and remediate and pay any applicable victim compensation or forfeiture.
To be clear, under this amendment to our CEP, a company could qualify for a presumption of a declination regardless of whether the whistleblower made a report to the department first. This is a significant benefit to companies and a departure from our usual approach. We are offering this benefit to encourage companies to invest in robust internal reporting structures and to incentivize voluntary self-disclosures. A strong culture of internal reporting will pay dividends for compliance programs — the more employees who both understand how to internally report potential misconduct and feel comfortable doing so, the stronger the compliance program will be. And that is why we changed our policy to make sure companies can still benefit from voluntary self-disclosures even after an employee comes forward to the department under our whistleblower program.
I also want to address an issue many stakeholders raised during our policy sprint — the risks whistleblowers face when they decide to come forward. Our statutory authority does not include anti-retaliation provisions, but this is an issue we take incredibly seriously. Let me be clear: our prosecutors will protect whistleblowers’ identities to the fullest extent allowable under law. And if a company retaliates against a whistleblower, we will take all appropriate steps: the company will lose credit for cooperation and remediation and could face sentencing enhancements — and even prosecution — for obstruction of justice.
Let me wrap up where I started. The Criminal Division’s policies relating to corporate enforcement provide incentives for companies to take compliance seriously. They also help us achieve our top priority: holding culpable individuals accountable for their criminal acts. Our whistleblower program reinforces our existing corporate voluntary self-disclosure program and our new individual voluntary self-disclosure policy, 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 does occur and companies are considering whether to make a self-report, remember this simple message: call us before we call you.
We have a web page dedicated to our whistleblower program that tells you more about how it works. It’s easy to find at justice.gov/corporatewhistleblower. And if you want to submit a tip, you can reach us at corporatewhistleblower@usdoj.gov.
Thank you again for the opportunity to speak with you.