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North America: DOJ extends leniency incentives to corporate wrongdoers who disclose criminal misconduct

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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.

Key takeaways

  • 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 is a partner in the Litigation and Government Enforcement practice group in Washington, DC. Geoff started his career in Baker McKenzie's London office in 2007 and moved to Washington DC in 2012. Geoff represents clients in matters before the federal government arising out of anti-corruption, trade sanctions, fraud, anti-money laundering, national security, and related enforcement actions. He also represents clients in civil and criminal matters in federal court. Geoff has extensive experience conducting internal investigations relating to such matters around the world.

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Jess is a technology investigations partner practicing at the forefront of government enforcement in the technology industry. Jess leads Baker McKenzie's investigations and compliance practice on the West Coast.
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.

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Maria Grenader is an associate in the Litigation and Government Enforcement Practice Group and a member of the Compliance and Investigations Group in our Washington, DC office. Maria advises clients on managing anti-corruption compliance risks stemming from operating businesses in global markets. She handles internal investigations and related interactions with law enforcement authorities and international financial institutions.

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Maria Piontkovska is an associate in Baker McKenzie's Los Angeles office. Maria advises clients on reducing anti-corruption compliance risks stemming from operating business in emerging markets and handles internal investigations and related interactions with law enforcement authorities.

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