In July 1986, the Department of Defense initiated its Voluntary Disclosure Program which is designed to encourage self-policing and voluntary disclosure by Defense contractors of procurement-related problems. The Fraud Section's Federal Procurement Fraud Unit (Unit) is the contact point in the Department of Justice to oversee voluntary disclosure matters. The responsibilities of the Fraud Section's Federal Procurement Fraud Unit with regard to the Department of Defense's Voluntary Disclosure Program include the following:
- The Unit will review all referrals made to the Department of Justice by the Department of Defense in connection with the Voluntary Disclosure Program.
- Upon receipt of the referral from the Department of Defense, the Unit will conduct or refer to an appropriate USA to conduct whatever preliminary inquiry is deemed necessary to determine whether there is specific credible evidence suggesting prosecutable violations of Federal laws.
- If the Unit determines that specific credible evidence of criminal conduct does not exist, the preliminary inquiry will be closed. The closing of a preliminary inquiry does not necessarily constitute a criminal declination. An inquiry may be reinstated by the Unit at any time for any reason it deems to be appropriate.
- If the Unit determines that specific credible evidence of criminal conduct exists, the referred matter will be investigated.
- Matters involving an impact on the government of $100,000 or more or in which the fraud posed a substantial threat to safety or to national security will be retained by the Unit or referred to an appropriate United States Attorney's office (USAO) The unit will advise the USAs of matters, whether or not retained by the unit. Cases referred under this paragraph to USAOs will be monitored by the Unit on two bases: (a) for periodic status reports provided by the USAs, and (b) for review of proposed prosecutions.
- All other matters will be referred to an appropriate USAO for prosecutive decision.
Upon receipt of an initial contractor disclosure, the DOD's Inspector General's Office makes a preliminary determination as to whether the disclosure satisfies the program's requirements, coordinates the execution of a standard voluntary disclosure agreement (known as the "XYZ Agreement"), assigns the disclosure to a DOD criminal investigative organization for verification and to a suspension and debarment authority, and coordinates the disclosure with the Department of Justice for potential civil and criminal action. The Unit reviews all voluntary disclosures, and has the opportunity to concur in the XYZ agreement, which defines the obligations that the contractor and the government assume when undertaking a voluntary disclosure.
The Department of Justice has sole responsibility to initiate or decline prosecution. Prior to any decision to prosecute or to decline prosecution of a volunteer corporation, United States Attorneys Offices will notify the Unit (providing a summary of the evidence, proposed theories of criminal liability, and proposed charges in the case), and obtain the concurrence of the unit.
In July, 1987, the Department of Justice issued guidelines that set out a number of factors to consider in deciding whether to prosecute a company that has been admitted to the DOD Program. Factors include: the candor, completeness and promptness of the disclosure; the extent of the fraud; the pervasiveness of the fraud; the level of the culpable corporate employees; the cooperation of the corporation during the investigation; and the remedial action taken by the corporation, including discipline, restitution, and revisions to the corporate compliance programs.
[cited in JM 9-42.001; JM 9-42.430]