Avoid prosecution through Central California whistleblower program

August 24, 2024

By KAREN VELIE

A new federal whistleblower pilot program in California encourages individuals to disclose criminal conduct in order to avoid prosecution, according to an announcement by U. S. Attorney Martin Estrada.

The program is designed to prompt individuals to come forward about previously unknown fraud, bribery, and other misconduct. It does so by setting forth conditions under which the voluntary self-disclosure of misconduct to the U.S. Attorney’s Office for the Central District of California, coupled with the agreement to fully cooperate in the investigation of others involved, individual may avoid prosecution.

The program applies to circumstances where an individual voluntarily discloses information regarding criminal conduct undertaken by or through public or private companies, exchanges, financial institutions, investment advisers, or investment funds involving fraud or corporate control failures or affecting market integrity, or criminal conduct involving state or local bribery or fraud relating to federal, state, or local funds.

It is designed to facilitate the investigation of misconduct that is not already known to prosecutors and target those equally or more culpable in the misconduct, and only offers benefits to those who did not play a leading role in the misconduct, and who are not corporate CEOs or those in similar positions of control or federal, state, or local officials.

This pilot program provides transparency regarding deferred or non-prosecution agreements to incentivize individuals (and their counsel). Receiving such information will help federal prosecutors investigate and prosecute criminal conduct that might otherwise go undetected or be impossible to prove, and will, in turn, further encourage companies to create compliance programs that help prevent, detect, and remediate misconduct and to report misconduct when it occurs.

Required conditions for voluntary self-disclosure agreements:

• The misconduct has not previously been made public and is not already known to our office or to any component of the Department of Justice;
• The individual voluntarily discloses the criminal conduct to our office and not in response to a government inquiry, and prior to imminent threat of disclosure or government investigation;
• The individual is able to provide substantial assistance in the investigation and prosecution of at least one equally or more culpable persons, did not play a leading role in the disclosed conduct, and is prepared to cooperate fully with this office in its investigation and prosecution of the disclosed conduct, including by providing testimony if requested;
• The individual truthfully and completely discloses all criminal conduct in which the individual has participated and of which the individual is aware;
• The individual is not a federal, state, or local elected or appointed and confirmed official; not an official or agent of a federal investigative or federal law enforcement agency; or is not the CEO or equivalent, or a person who otherwise exercises primary control – regardless of title – over the operations of a public or private company; and
• The individual has not engaged in any criminal conduct that involves: the use of force or violence, any sex offense involving fraud, force, or coercion, or a minor, any offense involving terrorism or implicating national security or foreign affairs and does not have a previous felony conviction or a conviction of any kind for conduct involving fraud or dishonesty.

In instances in which an individual discloses such information, but does not meet the above requirements, prosecutors may consider exercising – with supervisory approval – discretion to extend an agreement.

Anyone wishing to self-disclose pursuant to this policy, please email: USACAC.VDP@usdoj.gov.