Whistleblower Attorney Calls for Caution Around DOJ’s New SDNY Whistleblower Program

On January 10, the United States Attorney for the Southern District of New York announced the launch of a Whistleblower Pilot Program offering the potential of non-prosecution agreements to individuals involved in non-violent crimes in exchange for voluntary self-disclosures and cooperation against others involved in the criminal conduct.

Leading whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto urges that individuals interested in the program proceed with extreme caution, given the Department of Justice’s track-record in dealing with whistleblowers and the existence of established whistleblower award programs for corporate fraud which offer anonymity and confidentiality.

“Outside of representing the United States in False Claims Act cases, the DOJ has no whistleblower office or program,” Kohn explains. “In violation of federal law, DOJ has no program to accept confidential and anonymous whistleblower tips under the Anti-Money Laundering/Bank Secrecy Act whistleblower law. Worse still, the DOJ has indicted and aggressively prosecuted highly qualified whistleblowers, even whistleblowers who have been recognized by other federal agencies for their contributions in fighting corruption and crime.”

“Given this history, whistleblowers must be very cautious when approaching the DOJ. Whistleblowers should consider filing claims under the anonymous and confidential whistleblower programs operated by the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and FinCEN. Additionally, the Internal Revenue Service (IRS) whistleblower regulations offer strict confidentiality to whistleblowers. These offices have welcomed whistleblowers and offer financial incentives. Under all these programs whistleblowers who have participated in illegal conduct can still qualify for a reward.”

“When possible, we urge whistleblowers to file claims within whistleblower programs that offer rewards and confidentiality. If a referral is needed to the DOJ, at that time it is advisable to seek confidential informant status for the whistleblower, and, if necessary, negotiate a non-prosecution agreement.

“Our experience with DOJ has been mixed. Many DOJ agents and prosecutors understand whistleblowers and their importance. They do a great job in working closely with whistleblowers as valuable informants. But others do not.”

“Until DOJ has an agency-wide whistleblower program that implements the laws and policies behind the numerous whistleblower laws, communications with the DOJ must proceed with caution.”