Report a Financial Crime? DOJ Will Still Prosecute You

Looks like company executives are damned if they do and damned if they don’t report a financial violation committed by their companies.

The Department of Justice’s (DOJ) criminal division clarified that its voluntary disclosure policy doesn’t apply to chief executive or financial officers (CEOs/CFOs). A reporting individual qualified to enter into a a non-prosecution agreement (NPA) with the DOJ can not be the CEO, CFO or an “organizer/leader of [a financial] scheme,” according to an April 15 DOJ policy letter.

The DOJ’s voluntary disclosure pilot program was created to increase enforcement of financial crimes while protecting whistleblowers who come forward to report them. DOJ is raising the bar for company execs by essentially saying: You should know if anyone in your organization is stealing and you shouldn’t expect any kind of reward for coming forward.

What Kinds of Violations Do the Feds Want to Know About?

The DOJ lays out the crimes whistleblowers can come forward with and expect to receive an NPA:

• money laundering, illegal money transmitting and fraud
• manipulation of financial markets by banks, investment firms, advisors, investment funds, public or private companies with 50 or more employees, or insiders/agents of any such entities
• foreign corruption, bribery, extortion or money laundering
• healthcare fraud or illegal healthcare kickbacks, and
• bribes or kickbacks made to domestic public officials.

All disclosures must be voluntary, truthful and complete. Caveat: This pilot program doesn’t apply to offenses in which other divisions of the DOJ have charging authority, such as tax or sanctions offenses.