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  • Writer's pictureDave Lee

DOJ Announces Conditional Immunity for Individuals Under Pilot Self-Disclosure Program

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Earlier this week, the Criminal Division of the U.S. Department of Justice (“DOJ”) launched a pilot program where individuals won’t be charged for their involvement in certain types of wrongdoing – including fraud, corruption, and money laundering – if they turn themselves in first.


The Pilot Program on Voluntary Self-Disclosures for Individuals follows a string of incentives announced last year aimed at nudging corporate entities towards self-disclosing misconduct, as well as a similar individual program within the DOJ’s U.S. Attorney's Office for the Southern District of New York. As with those efforts, this program provides immunity if certain conditions are met, including:


  • The self-disclosure must provide information that is not already public or known to the DOJ;

  • There must be no government investigation or threat of imminent disclosure to the government or the public;

  • The individual must agree to fully cooperate with and be willing and able to provide substantial assistance;

  • The individual must agree to forfeit or disgorge any profit from the wrongdoing and pay restitution or victim compensation; and

  • The individual cannot be the “organizer/leader of the scheme.”


While such a structure may work well at pushing companies towards self-disclosure, individual wrongdoers may not use the same calculations. If a company’s self-disclosure does not go as hoped, it may face larger fines or a monitorship; if an individual is not so successful, they face time in jail. That prospect may be daunting enough that many individual wrongdoers may opt to stay silent and hope to avoid getting caught, particularly when it may not always be clear what “substantial assistance” is, how victims can be compensated, who counts as an “organizer/leader,” or whether there is an existing government investigation (especially since anticorruption investigations often occur as industry sweeps).


But the program’s aim is not so much to attract individual disclosures, as it is to raise the stakes for companies who become aware of potential wrongdoing. If they want to avail themselves of declinations or reduced penalties, they will need to contact regulators before the individual wrongdoers do. This potential for a “race to the courthouse,” even if remote, means companies may need to have a tailored investigations plan in place long before any potential wrongdoing is revealed.


Indeed, the policy document itself indicates that the program “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.”


Nicole Argentieri, the head of the Criminal Division, is reported to have put it more bluntly when announcing the program:  “The department is upping the ante…by increasing the incentives for others to come forward,” Argentieri said. Echoing a phrase she used last November in urging companies to self report, she added, “Call us before we call you.”


Ultimately, the DOJ will likely gauge the success of this pilot not by the number of individuals who self-disclose, but by the broader universe of companies and people. In that regard, it may be hoping for a repeat of its Antitrust Leniency Policy that was substantially revised in 1993 and 1994 to provide similar safe harbors for self disclosure. Leniency applications soared in the wake of those revisions, and the Deputy Assistant Attorney General in charge of criminal antitrust enforcement declared it to be their “most important prosecutorial tool over the last 26 years.”



FCPA Compliance Consultant, TRACE

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