On April 15, 2024, the Criminal Division of the Department of Justice (“DOJ”) issued a new pilot program to incentivize individuals to come forward with voluntary disclosures (the “Program”). Under this Program, individuals with criminal exposure who come forward and report misconduct that was otherwise unknown to the DOJ may be eligible to receive a Non-Prosecution Agreement (“NPA”).
While the use of NPAs is not new, this Program will provide clear guidelines for individuals who can qualify for an NPA. This Program provides that culpable individuals will receive an NPA if they voluntarily, truthfully and completely self-disclose original information regarding misconduct that was unknown to the department in certain high-priority enforcement areas; fully cooperate and can provide substantial assistance against those equally or more culpable; and forfeit any ill-gotten gains and compensate victims. The disclosure must be made to the Criminal Division of the DOJ and must occur before any other corresponding government investigation or civil enforcement in order to be truly voluntary.
The Program seeks disclosures related to specific enforcement areas involving the following:
- Health care fraud and kickback schemes committed by or through companies with 50 or more employees;
- Schemes involving financial institutions—including money laundering and criminal compliance-related schemes;
- Schemes related to the integrity of financial markets involving financial institutions, investment advisors or funds, or public or large private companies;
- Foreign corruption schemes, including violations of the Foreign Corrupt Practices Act, Foreign Extortion Prevention Act and associated money laundering;
- Federal contract fraud schemes; and
- Domestic corruption schemes involving bribes or kickbacks paid by companies to domestic public officials.
Note that CEOs, CFOs, high-level foreign officials, domestic officials at any level or individuals who organized or led the criminal scheme in question are not eligible for this Program. Additionally, individuals who have engaged in certain types of criminal conduct, have prior felony convictions or any conviction involving fraud or dishonesty are not eligible for an NPA under the Program.
Practical Takeaways
Health care fraud is specifically listed as a key enforcement area for the DOJ. This Program provides a pathway for certain culpable individuals to come forward without risking criminal prosecution. Individuals who do come forward must be prepared to be fully transparent and forfeit any benefit illegally received to participate in this Program. Due to the restraints on when an individual is eligible to receive an NPA and the severity of the potential repercussions should they not meet the criteria, it will be interesting to track the number of self-disclosures under the Program. It will also be enlightening to watch whether this self-reporting option becomes as popular as other federal government self-reporting vehicles to resolve potential civil exposure.
Keep in mind that the best defense to potential misconduct, criminal or otherwise, is an effective compliance program. As the DOJ highlights in its Program guidance, an NPA “may be a particularly important incentive for companies to create compliance programs that encourage robust internal reporting of complaints, that help prevent, detect, and remediate misconduct before it begins or expands, and that allow companies to report misconduct when it occurs.”
For more information on the Pilot Program, help in assessing a potential self-reporting issue or assistance in evaluating or enhancing your compliance program, please contact:
- Katherine Kuchan at (414) 721-0479 or kkuchan@hallrender.com ;
- Scott Taebel at (414) 721-0445 or staebel@hallrender.com;
- Brandon Helms at (248) 457-7847 or bhelms@hallrender.com;
- Kaitlin Nucci at (248) 457-7838 or knucci@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
