By Andrew Goudsward
WASHINGTON (Reuters) - The U.S. Justice Department on Thursday debuted its first-ever whistleblower program offering monetary awards to tipsters who report certain types of corporate misconduct, an effort designed to ratchet up the pressure on companies who face allegations of wrongdoing.
The program, which officials previewed in March, is designed to fill gaps in existing U.S. government whistleblower programs and incentivize both people with knowledge of corporate wrongdoing and companies who might be implicated to inform the government.
“We're doubling down on a proven strategy to ferret out criminal activity that might otherwise go unreported,” Deputy Attorney General Lisa Monaco told reporters.
Under the program, which will run initially for three years, whistleblowers who report original information about certain corporate offenses will, if a prosecution results in a forfeiture of assets, be eligible to receive a certain portion of that penalty.
Tipsters can receive up to 30% of the first $100 million in asserts forfeited and up to 5% of those between $100 and $500 million.
It is the latest in a series of steps taken by the Justice Department during the Biden administration to pressure companies to voluntarily alert prosecutors about potential criminal activity in their ranks.
“The company's leadership now has to grapple with the increased possibility that if they don't self-disclose misconduct, an individual whistleblower might beat them to the punch,” Monaco said.
The program is designed to capture conduct not already covered by existing whistleblower programs run by civil regulators including the Securities and Exchange Commission and Commodity Futures Trading Commission, officials said.
Justice Department officials said they are especially interested in foreign corruption schemes outside the authority of the SEC, health care fraud against private insurers and certain financial crimes including defrauding regulatory agencies.