US to Broaden Incentives for Individual Criminal Whistleblowers

The Justice Department is on the verge of encouraging corporate crime whistleblowers by letting the individuals reap financial benefits, building on the Securities and Exchange Commission’s model.

Deputy Attorney General Lisa Monaco is expected to announce Thursday that DOJ will incentivize individuals to “come forward and blow the whistle when they weren’t involved in the misconduct,” said Marshall Miller, who is Monaco’s top deputy, at a legal conference Wednesday.

Miller described it as a corollary of sorts to Monaco’s past efforts at sweetening the rewards for companies to quickly and voluntarily self-disclose wrongdoing.

“The next step is in the monetary space, and I think you’ll hear more about that from the deputy attorney general tomorrow,” said Miller at an American Bar Association event in San Francisco.

He didn’t specify how Monaco, who is scheduled to address the conference the following day, could allow individuals who report a crime to share in the fines levied against their company—a system that already exists at the SEC and the Commodity Futures Trading Commission for those who flag financial misconduct.

Miller compared the idea to what’s already underway at the SEC and CFTC.

“Stay tuned for tomorrow. But the point here is as more and more avenues exist for folks to come forward and either blow the whistle or self disclose, it becomes more and more a risky proposition to sit on your hands.”

Meanwhile, in an expansion of a separate form of individual disclosure incentives, Ismail Ramsey, San Francisco’s US attorney who joined Miller on the ABA panel, said his district will soon be establishing its own version of a recently-launched Southern District of New York pilot.

The Manhattan-based US Attorney’s Office started a program last month that allows prosecutors to offer non-prosecution agreements to individuals who were involved in a nonviolent crimes, provided that the information isn’t public and it leads to the prosecution of others.

The Northern District of California’s program will be focused more on intellectual property matters, and will offer benefits if certain conditions are met, Ramsey said.

The department has long been open to negotiating deals for culpable individuals to avoid charges after they report others for white-collar crime. The SDNY model marked a more formal method to entice such tips.

The DAG’s announcement will be distinct from the approach at those two high-profile US attorney’s offices in that people who played a role in the crime won’t be eligible for the monetary rewards.