Last Thursday, the United States Attorney’s Office for the Northern District of Illinois announced a new program designed to incentivize individuals to voluntarily report and cooperate in the investigation and prosecution of non-violent offenses. The program contains several unique features that should be of interest to the criminal defense bar and observers in the legal community. Corporations and those who advise them should also take note, because the NDIL program could incentivize employees to report their role in corporate misconduct to the government. In light of this, companies may wish to revisit their corporate compliance programs to make sure they effectively incentivize internal reporting of misconduct such that the company has the option to remediate and itself report misconduct under the Department of Justice's Corporate Enforcement and Voluntary Self-Disclosure Policy. 

A Range of Potential Benefits

Unlike prior individual self-disclosure programs, such as those from the United States Attorney’s Offices for the Southern District of New York and the Northern District of California, the Northern District’s program identifies several different potential benefits for those who disclose rather than focusing solely on the possibility of a non-prosecution agreement. In addition to a non-prosecution or deferred prosecution agreement, those who self-report criminal conduct under the NDIL program can also be eligible for letter immunity or substantial sentencing relief in a criminal prosecution. Prosecutors will consider a dozen specifically articulated factors in deciding whether these benefits should be provided to an individual reporter, including the timeliness of the individual’s disclosure, the extent and completeness of that disclosure, the magnitude and duration of the wrongdoing and the individual’s role therein, and the individual’s prior criminal history. 

As United States Attorney Andrew S. Boutros put it when announcing the program, “for the first time in the Northern District of Illinois, individual wrongdoers now know upfront with transparency and much greater certainty whether and how they can be rewarded when they self-disclose wrongdoing, fully cooperate with our investigation, and remediate the misconduct. Incentivizing individuals to come forward and do the right thing will result in a better outcome for victims and a just result for the citizens of our District.”

A Broad Scope

Some individual self-disclosure programs have focused only on certain classes of offenses. For example, the Eastern District of New York USAO’s program listed out seven specific crimes to which it applied, including fraud, intellectual property theft, bribery and obstruction of justice. Similarly, the Southern District of Florida USAO’s program limited its application to reports of criminal conduct by “public or private companies, exchanges, indexes, financial institutions, investment advisers, investment firms, or investment funds involving fraud or corporate control failures or affecting market integrity; or… involving state or local bribery or fraud relating to federal, state, or local funds.” The NDIL program, in contrast, applies generally to “voluntary reporting of criminal wrongdoing” with some exclusions. Still, absent unusual circumstances, the program extends only to non-violent offenses and does not include firearm offenses, terrorism, drug trafficking, child exploitation, human trafficking or certain sex offenses.

New Reporting Mechanisms

The NDIL’s individual self-disclosure program includes an intake form for those seeking to report misconduct, which requires basic information such as the contact information of the individual reporting, the name of the entity involved in the misconduct and information about the individual’s role there, and a brief description of the nature of the misconduct. In addition, the program permits individuals to make their initial contact with the NDIL through counsel without identifying the name of their client. Although anonymous reporting is ultimately not allowed under the program (and indeed the cooperation and testimony the program anticipates would be impossible to provide anonymously), the ability to make the initial approach through counsel is significant. Through it, individuals may have a better opportunity to gauge prosecutors’ assessment of the value of their disclosures and the extent of their wrongdoing through their attorneys before determining whether to reveal their identities. As Boutros put it, “the defense bar now has a unique tool ... that we hope will be used with great frequency.”

Conclusion

The individual self-disclosure program announced by the NDIL provides a powerful incentive for those involved in criminal wrongdoing to work with counsel and self report their misconduct in hopes of avoiding the most severe penalties. At the same time, it also comes with the United States Attorney’s stark warning for those who elect not to self-report that “they should not expect to be treated nearly as favorably as those who turn the corner and take account of their criminal conduct.” At the very least, individuals in the Northern District with knowledge of wrongdoing should consult with counsel about the potential costs and benefits of voluntary disclosure. And in light of this new program, corporations and their attorneys should take another look at their internal reporting systems for employees and, in appropriate cases, consider whether it makes sense for them to make their own self-disclosures of wrongdoing before involved employees beat them to the punch.