Indiana Businesses Should Heed DOJ's Self-Disclosure Policy

In 2020, an Indianapolis federal judge ordered a petroleum company to pay nearly $70 million after a Department of Justice prosecution of company employees unearthed a sprawling scheme to defraud the government through tax credit incentives. A few years earlier, an Indiana-based manufacturer settled a DOJ lawsuit over alleged bribes to foreign officials by agreeing to a $17 million criminal penalty.

The list goes on.

Over the years, Indiana businesses have found themselves in hot water (and on the hook for eye-popping fines) due to the DOJ’s continued focus on corporate criminal enforcement. Now, a newly unveiled DOJ policy gives businesses an opportunity to self-report misconduct before the government comes knocking — and receive significant leniency for doing so.

In March, the Department of Justice released its revamped “Corporate Enforcement and Voluntary Self-Disclosure Policy.” For about a decade, DOJ has had a patchwork of policies aimed at encouraging companies to report misconduct. The prior policies received criticism for being opaque and failing to provide clear guidance on the benefits that a company might receive for self-disclosing misconduct.

The CEP aims to correct that. It aligns with the Trump Administration’s corporate-friendly policies by providing clear guidance and offering enhanced incentives for companies to proactively manage compliance, self-report misconduct and cooperate with federal investigations. And it provides greater transparency about the rewards for self-disclosure.

Under the CEP, if a business voluntarily self-discloses, fully cooperates with the DOJ and undertakes timely and appropriate remedial actions, it may receive a “declination” (meaning DOJ will not prosecute the company for the misconduct). To be eligible for a declination, the company must have voluntarily disclosed the misconduct to DOJ, fully cooperated with the DOJ investigation and demonstrated that it took steps to remediate the misconduct effectively and in a timely manner. The company also must not have engaged in especially egregious or pervasive misconduct, and there must be no aggravating circumstances such as recent criminal recidivism or significant harm caused.

The prospect of getting a declination is a significant incentive. A company receiving a declination is protected from public criminal proceedings, avoids reputational damage and shareholder disillusionment and mitigates the amount of fines that it would face if the case were successfully prosecuted through trial.

Even if a company is not eligible for a declination, it might still receive benefits under the CEP. The CEP contains a provision allowing for “near miss” disclosures, wherein a company that is ineligible for declination due to aggravating factors or other disqualifying facts may still be granted a Non-Prosecution Agreement with a term of fewer than three years. The company also can receive a reduction of between 50% to 75% off the low end of the U.S. Sentencing Guidelines fine range and avoid imposition of an independent compliance monitor, which often represents a major cost to a convicted company.

Furthermore, if neither declination nor “near miss” NPA status is achieved, the DOJ retains considerable discretion with respect to fines, compliance obligations, and monitorship. Full cooperation and remediation will influence the ultimate resolution, and companies can still benefit from reduced penalties.

Engaging counsel that is familiar with the institutional norms and processes of the Department of Justice is a smart move for companies considering whether to voluntarily self-disclose to the government. Resolutions under the CEP are subject to approval by high-level DOJ leadership, including the assistant attorney general and/or the U.S. attorney for the applicable district. The CEP also preserves the discretion of the line prosecutor to recommend declination or seek a lower penalty than would otherwise be imposed where the prosecutor believes that circumstances warrant it. Moreover, a company must navigate the CEP process carefully and correctly. For instance, the policy provides that the company’s disclosure must be made to “an appropriate Department criminal component.” Disclosures to state agencies, regulatory bodies and civil enforcement agencies do not generally qualify.

The CEP also underscores the importance of early detection of wrongdoing and robust compliance programs. Companies should work with their counsel to develop and refine their compliance processes. The DOJ lists several criteria for effective programs, including risk assessment, the independence and empowerment of compliance personnel, regular program testing and the allocation of sufficient resources. Here, early detection and reporting are crucial, especially in whistleblower scenarios where companies must act within 120 days to self-disclose after receiving an internal report to preserve eligibility for declination.

Federal contracts, interstate operations and multi-jurisdictional business activities all invite DOJ criminal enforcement. The CEP provides strategic opportunity to avoid or mitigate corporate liability and incentivizes companies to invest in rigorous compliance programs.•

Originally published by The Indiana Lawyer, 15 May 2026