United States Attorney Breon Peace Announces Whistleblower Non-Prosecution Pilot Program

United States Attorney Breon Peace today announced that the U.S. Attorney’s Office for the Eastern District of New York (the “Office”) has implemented a new Whistleblower Non-Prosecution Pilot Program (the “Whistleblower Pilot Program”).  The Whistleblower Pilot Program, which is effective immediately, is designed to encourage individuals to disclose original and actionable information about previously unknown criminal conduct undertaken by or through public or private entities or organizations.  It does so by providing transparency regarding the conditions under which an individual’s voluntary self-disclosure of criminal conduct to the Office, coupled with the agreement to fully cooperate in the investigation of others involved, may make the individual eligible for a non-prosecution agreement (“NPA”).  The Whistleblower Pilot Program will enable the Office to investigate and hold wrongdoers accountable more quickly, particularly with respect to criminal conduct that might otherwise go undetected or be impossible to prove, and will, in turn, further encourage companies to create and enforce compliance programs that help prevent, detect, and remediate misconduct and to report misconduct when it occurs.

The program applies to circumstances where an individual voluntarily discloses to the Office information regarding criminal conduct undertaken by two or more individuals, or by or through public or private entities or organizations, including corporations, partnerships, non-profits, exchanges, money services businesses, banks, financial institutions, investment advisers, or investment funds, involving: (1) fraud or corporate control failures; (2) intellectual property theft and related violations; (3) market integrity; (4) state or local bribery or fraud relating to federal, state, or local funds; (5) obstruction of justice, perjury, or false statements; (6) healthcare fraud, including violations of the Anti-Kickback statute; and (7) money laundering related to any of the prior-listed crimes.  Pursuant to the Whistleblower Pilot Program, the Office will enter into an NPA in exchange for the individual’s cooperation where the following conditions are met:

• The misconduct has not previously been made public and is not already known to the Department of Justice (“DOJ”);

• The individual discloses the criminal conduct voluntarily to EDNY and not in response to a government inquiry or obligation to report misconduct to EDNY or any other component of DOJ, and prior to imminent threat of disclosure or government investigation;

• The individual provides substantial assistance in the investigation and prosecution of one or more equally or more culpable persons, and is prepared to cooperate fully with this Office in its investigation and prosecution of the disclosed conduct, including testifying in any proceeding in the Eastern District of New York or elsewhere as requested by the Office;

• The individual provides complete, truthful, and accurate information, and discloses all criminal conduct in which the individual has participated and of which the individual is aware;

• The individual is not an elected, or appointed and confirmed, federal, state, local or foreign official; a federal law enforcement official; the highest-ranking person within the organization where the misconduct occurred (e.g., the Chief Executive Officer) or the person who, regardless of title, exercises primary control over the operations of such organization; or the head of a public agency or entity;

• The individual’s role in the alleged misconduct did not involve: leading or originating the illegal activity; violence or the threat of violence; any federal or state sex offense involving fraud, force, coercion, or a minor; or any federal or state offense involving terrorism; and

• The individual has not been previously convicted of any felony involving: violence or the threat of violence; any sex offense involving force, fraud, coercion, or a minor; terrorism; or fraud or dishonesty.

If an individual discloses information to the Office regarding the covered crimes but does not meet the requirements set forth above, the Office will nevertheless consider exercising discretion to extend a non-prosecution agreement, taking into account certain factors outlined in the Whistleblower Pilot Program, including, but not limited to, information provided by the individual about individuals or entities located outside the United States of America that could lead to the investigation and prosecution of such individuals or entities; whether the individual has information about criminal conduct by a federal elected or appointed and confirmed official, or by a senior officer and/or member of the board of directors of a publicly traded company; and the adequacy of non-criminal sanctions.

Finally, to receive a non-prosecution agreement under the Whistleblower Pilot Program, the reporting individual will be required to forfeit or disgorge any proceeds from the criminal wrongdoing and pay restitution to victims.

The specific terms of the Whistleblower Pilot Program, along with a form for voluntary self-disclosures and the email address to which such forms should be sent, is available on the Office’s website here.