DOJ to Prioritize Whistleblower Tips on Tariffs, Immigration (1)

The Justice Department said it will prioritize corporate whistleblower tips in areas such as tariff fraud and violations of US immigration law and “simplify” its corporate enforcement and voluntary self-disclosure policy.

The department also plans to use fewer corporate monitorships as part of a broader effort to cut down on companies’ compliance obligations.

“Excessive enforcement and unfocused corporate investigations stymie innovation, limits prosperity, and reduces efficiency,” Matthew R. Galeotti, the acting head of the DOJ’s criminal division, said during a Monday speech at a financial crimes conference. “So that ends today.”

In his remarks, Galeotti, a former New York federal prosecutor, said that white-collar enforcement during the second Trump administration would be focused on “key threats to America,” such as fraud perpetrated against US citizens and the government.

The announcement comes as new DOJ leadership scales back some of its white-collar enforcement as part of an effort to direct more resources to such areas as immigration and drug trafficking. Department leaders have also released memos narrowing enforcement priorities in areas such as foreign bribery, foreign lobbying transparency, and crypto.

Galeotti’s announced priorities for the corporate whistleblower program appear to bring the Biden-era initiative in line with the president’s top areas of attention.

In August, DOJ leaders kicked off the three-year pilot program, which is designed to offer potentially million-dollar payouts to tipsters who come forward with information on financial fraud and bribery.

Along with tariffs and immigration, Galeotti said the department will prioritize tips involving sanctions, material support of foreign terrorist organizations, or those that facilitate cartels and transnational criminal organizations.

The revisions to the self-disclosure and monitorship policies also marks a shift from programs that Biden-era leaders placed a big emphasis on.

Galeotti said that the department will decline to prosecute companies that self-disclose wrongdoing and meet other criteria, which he noted was different from the current policy that says companies have a “a presumption of a declination.”

Companies that self-disclose following a delay or after DOJ has already become aware of the misconduct will also be entitled to possible benefits, Galeotti said, though prosecutors will retain the ability to recommend resolutions.

He also said the value outside monitors “add is often outweighed by the costs they impose.” New DOJ policy would limit their use and require a fee cap for those that are appointed, he said.

The Justice Department earlier this year began reviewing ongoing monitors, which are assigned in some corporate resolutions to review a company’s future conduct. Firms that currently have monitors as part of settlements with US prosecutors include crypto exchange Binance Holdings Ltd. and a US subsidiary of Toronto-Dominion Bank

Monitorships can generate huge fees for law firms but are widely criticized by the business community.