DOJ Launches Whistleblower Compensation to Incentivize Informants

Deputy Attorney General Lisa Monaco speaks alongside Attorney General Merrick Garland during a news conference at the Department of Justice Building in Washington on March 21, 2024. (Anna Moneymaker/Getty Images)

The U.S. Department of Justice (DOJ) on Aug. 1 launched the Corporate Whistleblower Awards Pilot Program aimed at encouraging individuals to report corporate misconduct by offering them a share in the financial penalties collected from successful prosecutions.

The pilot program, as highlighted by Deputy Attorney General Lisa Monaco in remarks on Thursday, seeks to expand the scope of whistleblower initiatives beyond those administered by the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Financial Crimes Enforcement Network (FinCEN).

Unlike existing programs that focus on specific types of misconduct, she said the DOJ’s initiative targets a broader range of corporate crimes, including foreign and domestic corruption, financial institution fraud, and health care fraud involving private insurers.

This program aims to fill gaps and double down on a “proven strategy to ferret out criminal activity that might otherwise go unreported,” Monaco said. She added that law enforcement has long offered rewards “to coax tipsters to report crimes.”

Whistleblowers can now submit information via www.justice.gov/CorporateWhistleblower.

According to the DOJ fact sheet, the program offers monetary awards to whistleblowers whose information leads to successful prosecutions and asset forfeitures exceeding $1 million.

Whistleblowers can receive up to 30 percent of the first $100 million in net proceeds forfeited, with smaller percentages applied to larger amounts. The DOJ will assess each whistleblower’s contribution based on the usefulness of their information and the assistance provided during the investigation.

Additionally, the program emphasizes confidentiality and protection for whistleblowers. The DOJ said it will take appropriate action against those attempting to prevent whistleblowers from coming forward.

Monaco noted the initiative is expected to enhance deterrence by holding individual and corporate wrongdoers accountable, thus encouraging a culture of compliance and responsible corporate citizenship.

Principal Deputy Assistant Attorney General Nicole M. Argentieri said in a statement “we are sending a message to individuals who know about corporate misconduct: Our tip line is open, so if you see something, say something.”

She cited the Binance case, in which the cryptocurrency exchange operated in the United States without registering with financial regulators.

The new whistleblower initiative complements the DOJ’s existing voluntary self-disclosure programs, which incentivize companies to report misconduct proactively.

Companies are encouraged to enhance their internal reporting systems and are assured that self-disclosure within a specified time frame can still yield benefits, even if a whistleblower has already submitted information to the DOJ.

The DOJ plans to evaluate the pilot program regularly and is open to legislative actions to expand its reach and effectiveness.

“We’re excited to move forward with the authorities Congress has already given us to strengthen corporate accountability, promote fairness, and protect the American people,” Monaco added.