In July 1986, the Department of Defense initiated its Voluntary
Disclosure Program which is designed to encourage self-policing and
voluntary
disclosure by Defense contractors of procurement-related problems. The
Fraud
Section's Federal Procurement Fraud Unit (Unit) is the contact point in the
Department of Justice to oversee voluntary disclosure matters. The
responsibilities of the Fraud Section's Federal Procurement Fraud Unit with
regard to the Department of Defense's Voluntary Disclosure Program include
the
following:
The Unit will review all referrals made to the Department of
Justice by the Department of Defense in connection with the Voluntary
Disclosure
Program.
Upon receipt of the referral from the Department of Defense, the Unit
will
conduct or refer to an appropriate USA to conduct whatever preliminary
inquiry
is deemed necessary to determine whether there is specific credible evidence
suggesting prosecutable violations of Federal laws.
If the Unit determines that specific credible evidence of criminal
conduct
does not exist, the preliminary inquiry will be closed. The closing of a
preliminary inquiry does not necessarily constitute a criminal declination.
An
inquiry may be reinstated by the Unit at any time for any reason it deems to
be
appropriate.
If the Unit determines that specific credible evidence of criminal
conduct
exists, the referred matter will be investigated.
Matters involving an impact on the government of $100,000 or more or in
which the fraud posed a substantial threat to safety or to national security
will
be retained by the Unit or referred to an appropriate United States
Attorney's
office (USAO) The unit will advise the USAs of matters, whether or not
retained
by the unit. Cases referred under this paragraph to USAOs will be monitored
by
the Unit on two bases: (a) for periodic status reports provided by the
USAs, and
(b) for review of proposed prosecutions.
All other matters will be referred to an appropriate USAO for
prosecutive
decision.
Upon receipt of an initial contractor disclosure, the DOD's
Inspector
General's Office makes a preliminary determination as to whether the
disclosure
satisfies the program's requirements, coordinates the execution of a
standard
voluntary disclosure agreement (known as the "XYZ Agreement"), assigns the
disclosure to a DOD criminal investigative organization for verification and
to
a suspension and debarment authority, and coordinates the disclosure with
the
Department of Justice for potential civil and criminal action. The Unit
reviews
all voluntary disclosures, and has the opportunity to concur in the XYZ
agreement, which defines the obligations that the contractor and the
government
assume when undertaking a voluntary disclosure.
The Department of Justice has sole responsibility to initiate or
decline prosecution. Prior to any decision to prosecute or to decline
prosecution of a volunteer corporation, United States Attorneys Offices will
notify the Unit (providing a summary of the evidence, proposed theories of
criminal liability, and proposed charges in the case), and obtain the
concurrence
of the unit.
In July, 1987, the Department of Justice issued guidelines that set
out
a number of factors to consider in deciding whether to prosecute a company
that
has been admitted to the DOD Program. Factors include: the candor,
completeness
and promptness of the disclosure; the extent of the fraud; the pervasiveness
of
the fraud; the level of the culpable corporate employees; the cooperation of
the
corporation during the investigation; and the remedial action taken by the
corporation, including discipline, restitution, and revisions to the
corporate
compliance programs.