During a March 7, 2024, speech at the American Bar Association’s 39th National Institute on White Collar Crime, Deputy Attorney General Lisa Monaco announced that the United States Department of Justice (“DOJ”) is launching a pilot whistleblower program intended to fill gaps in the existing framework of federal whistleblower programs. Monaco explained that there would be a “90-day sprint” to develop and implement the pilot program, with a formal start date scheduled for later this year. While the details of the program will be developed over the next 90 days, the DOJ will likely replicate requirements seen in the False Claims Act (31 U.S.C. §§ 3729-3733) and other federal whistleblower programs.  

Like other whistleblower initiatives, the DOJ’s program will focus on incentivizing disclosure of misconduct, fraud and abuse, and reward whistleblowers who provide original and meaningful information to the government. The new program expands on existing DOJ initiatives aimed at encouraging companies to self-disclose violations by offering incentives for proactively reporting violations. To qualify for a reward, a whistleblower must disclose original information that helps the DOJ discover significant corporate or financial misconduct that is otherwise unknown to the DOJ, and the whistleblower must be “the first in the door.” As a result of the information provided, a whistleblower may qualify to receive a portion of the resulting forfeiture. However, this new pilot program is distinguishable from other federal whistleblower initiatives in that it represents the first instance where the DOJ is incorporating monetary rewards as a fundamental component of a targeted program.

The new program largely serves as an extension of Title 28 of the U.S. Code, which authorizes the United States Attorney General to pay awards for “information or assistance leading to civil or criminal forfeitures involving any Federal agency participating in the [Department of Justice Assets Forfeiture Fund].”[1] As the statutory authority identifies the DOJ’s Money Laundering and Asset Recovery Section (“MLARS”), MLARS will play a leading role in designing the operational details of the pilot program. MLARS will work closely with U.S. Attorneys, the FBI, and other DOJ offices to develop the program guidelines and address eligibility requirements for potential whistleblowers.

In considering program eligibility requirements, the DOJ’s new whistleblower reward program will bear similarities to other federal whistleblower programs. For example, like the Security and Exchange Commission (“SEC”) and Commodity Futures Trading Commission (“CFTC”) whistleblower programs, the DOJ pilot program will only provide rewards to whistleblowers who submit original, non-public, truthful information not already known to the DOJ, and only when that information is provided voluntarily and not in response to any government inquiry, preexisting reporting obligations, or imminent threat of disclosure. Similar to how both the SEC and CFTC whistleblower programs limit rewards to cases in which the agencies collect sanctions of $1 million or more, the DOJ expects to establish a monetary threshold as a way to focus its resources on the most significant cases.

The DOJ identified four guardrails for the new whistleblower reward program. The DOJ would offer payments to a whistleblower if the following conditions are satisfied:

  1. All victims have been properly compensated;
  2. The whistleblower submitted truthful information not already known to the government;
  3. The whistleblower was not involved in the criminal activity itself; and
  • In cases where there isn’t an existing financial disclosure incentive – including qui tam or another federal whistleblower program.

The DOJ recognizes that the current whistleblower programs do not address the full range of corporate and financial misconduct that the Department prosecutes. As existing whistleblower programs at the SEC, CFTC, IRS, and FinCEN only cover misconduct within the jurisdiction of each agency, the DOJ’s new whistleblower reward program is designed to cover areas not currently addressed by other, preexisting whistleblower programs. Monaco says this program is the DOJ’s attempt to “fill in the gaps.”

During her announcement, Monaco emphasized three types of violations that the DOJ is particularly keen on uncovering:

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

While introducing the new program, Deputy Attorney General Monaco emphasized the DOJ’s commitment to maintaining its core strategy, which prioritizes allocating the most significant resources to the most serious cases, holding individuals accountable and pursuing tough penalties for repeat offenders. The DOJ plans to employ a “carrot and stick” approach to incentivize participation, combining both rewards and penalties to encourage companies to “step up and own up” and report misconduct to the government. The DOJ made it clear that waiting to disclose information would not be advantageous, as eligibility for the program will primarily hinge on whether a whistleblower is the first to report previously unknown information to the DOJ. This directive aims to incentivize both companies and individuals to promptly share any relevant information as soon as it comes to their attention. This announcement is yet another signal from the Department of Justice to companies and businesses to put robust compliance programs in place and to be prepared to report corporate or financial wrongdoing swiftly.

Cranfill Sumner’s White Collar, Government Investigations and Special Matters Practice Group has extensive experience representing whistleblowers and qui tam relators. We encourage any potential whistleblower to seek advice of experienced and competent counsel prior to contacting the authorities or making any statements to any government agencies.

[1] 28 U.S.C. § 524(c)(1)(C)