DOJ extends leniency incentives to corporate wrongdoers who disclose criminal misconduct
In brief
On April 15, 2024, the DOJ launched the Individual Voluntary Self-Disclosures (VSD) Program, extending incentives for individual wrongdoers to self-report criminal activities. This follows similar initiatives in the SDNY and NDCA. Traditionally, the DOJ incentivized corporate self-disclosure of wrongdoing. The new program aims to encourage individuals to disclose their misconduct and cooperate fully in exchange for non-prosecution agreements, potentially heightening the pressure on corporations to self-disclose swiftly. The program covers white-collar crimes and fraud but excludes violent crimes, high-ranking executives, and government officials. Companies should update compliance policies to mitigate risks and streamline internal reporting, while individuals must weigh the risks and benefits of self-disclosure under this untested program.
The Individual VSD Program incentivizes individuals involved in misconduct to come forward in exchange for leniency, allowing the DOJ to uncover and prosecute additional instances of corporate wrongdoing.
Subject to certain exceptions, under the new program, individual wrongdoers who disclose information to the government will be eligible to receive a non-prosecution agreement if the disclosing individual fully cooperates with the resulting investigation and the information disclosed related to qualifying criminal violations, was original, truthful, and complete, and voluntarily disclosed.
The Individual VSD Program further increases the risks and time pressure for voluntary self-disclosure decision-making by corporations – a delay in corporate disclosure now runs the elevated risk of other reporters coming forward before the corporation.
In light of these new disclosure avenues and incentives for wrongdoers to benefit from reporting corporate misconduct, companies should review their compliance policies, reporting mechanisms, and internal investigation procedures. They should ensure that employees can freely and easily report their concerns internally within the company without fear of retaliation.
At the same time, it is still crucial for companies to refrain from taking any action that the government may view as obstructing or interfering with an individual’s right or ability to make their voluntary disclosure (including under the Individual VSD Program).
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Author
Geoff Martin
Author
Jessica Nall
For more than two decades, Jess has defended companies and individuals in government investigations and conducted internal investigations involving cutting-edge technology issues including AI, cybersecurity, and alleged misuse of all kinds of data. Jess has defended companies and individuals across the Asia Pacific region since the first DOJ Antitrust cartel investigations in 2003, and has a deep understanding of cultural issues impacting investigations in that region and across the globe.
Jess has been recognized by Chambers & Partners, The Legal 500, and Global Investigations Review for internal investigations and defense in cases involving White Collar Crime & Government Investigations.
