Understanding the DOJ’s New Criminal Conduct Pilot Program: Implications for US Corporate Compliance
In this Expert Focus podcast, John Mitchell from Taft, Stettinius & Hollister LLP discusses the DOJ’s new Criminal Conduct Pilot Program and its implications for corporate actors and their internal compliance programmes.
The Criminal Conduct Pilot Program
The DOJ launched this initiative on 15 April 2024, aiming to encourage individuals to voluntarily disclose original, actionable information regarding certain types of corporate-related criminal conduct. Those who meet the programme’s criteria might receive a non-prosecution agreement (NPA), potentially insulating them from prosecution.
Mitchell explains that the programme is part of the DOJ’s longstanding strategy to use co-operating witnesses, grants of immunity, and NPAs to secure co-operation in investigations. For an individual to qualify for an NPA under the Pilot Program, the disclosure must be made after the programme’s announcement, contain original non-public information, and relate to specific categories of offences.
Areas of Focus of the Pilot Program
The Pilot Program focuses on a few primary categories of criminal offence:
- Violations by financial institutions, including money laundering and fraud.
- Integrity violations in financial markets by institutions, advisors, funds, or large companies.
- Foreign corruption and bribery, including violations of the Foreign Corrupt Practices Act and related statutes.
- Healthcare fraud and illegal kickbacks by large healthcare companies.
- Fraud against the United States in federally funded contracts, excluding healthcare-related fraud.
- Bribery or kickbacks to domestic public officials by large companies.
DOJ Policy and Goals
Notably, the programme excludes CEOs, CFOs, government officials, and individuals with prior felony convictions for fraud or dishonesty from participating. The disclosure must be voluntary, made before any investigation or inquiry by the DOJ or other federal agencies, and not be subject to any pre-existing obligation to report.
Mitchell emphasises the programme’s alignment with the DOJ’s goals to foster robust corporate compliance programmes. The DOJ expects corporations to create and implement systems that prevent, detect, and remediate misconduct, encouraging internal reporting and proactive compliance.
The Importance of Robust Internal Corporate Compliance
He advises companies to continuously review and enhance their compliance programmes to meet DOJ expectations, highlighting that a strong compliance culture can mitigate potential legal issues. This preparation is crucial when facing investigations, as demonstrating that any misconduct was the action of a rogue employee rather than a systemic issue can significantly benefit the organisation.
Mitchell concludes by noting the programme’s potential to become a more regular feature of the DOJ’s enforcement strategy, similar to initiatives in other US Attorney’s offices. This approach aims to uncover otherwise hidden criminal activities by incentivising early co-operation and disclosures from individuals.
The discussion underscores the importance of understanding the programme’s criteria and the broader implications for corporate compliance and legal strategy.
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