When a Self-Disclosure Ends in a Declination: Lessons from Recent Case Studies

By Jaclyn Jaeger

Imagine this scenario: As in-house counsel for your organization, you’ve just uncovered potential misconduct in the course of an internal investigation. The decision is made to self-disclose the matter to relevant enforcement authorities. Then comes an important follow-up question: What’s next? Citing lessons learned from two recent declinations, this article explores how a voluntary self-disclosure changes what the Department of Justice (DOJ) will expect from the company and corporate counsel during its investigation. To assess the potential outcome of a self-disclosure under the current enforcement environment, a necessary starting point is to review the DOJ’s “Corporate Enforcement and Voluntary Self-Disclosure Policy” (CEP), which was updated and reissued in March to apply to “all corporate criminal matters handled by the Criminal Division.”

“The Department’s policies afford companies that take responsibility for their misconduct with a clear path to a declination,” stated NFED Assistant Attorney General Colin McDonald. “Businesses that ignore the law and profit from their executive’s lies and deceit will be held accountable.”

Relevant case studies

Since the Department-wide CEP has been released, the DOJ has announced two declinations that provide several practical takeaways for companies and corporate counsel. The first declination, announced March 19, resulted from a foreign bribery investigation into Balt SAS, a medical-device company headquartered in France.

According to a “letter agreement” from the DOJ’s Fraud Section to Balt’s counsel, the government’s investigation “found evidence” that, from 2017 to 2023, approximately $602,000 in bribes was paid to a senior-level physician at a “state-owned” hospital in France in exchange for the hospital purchasing certain of Balt’s medical devices.

An earlier internal investigation conducted by Balt found that the individual involved was a former executive of Blockade Medical, a company acquired by the BALT Group in 2016. After discovering the misconduct during its internal investigation, Balt self-disclosed the matter to both the DOJ’s FCPA Unit and the Parquet National Financier (PNF) in France.

Like many bribery schemes, common elements included the use of a third-party consultant to pay the bribes and attempts to conceal the bribery payments, in this case with sham consulting agreements, fake invoices, and bonus payments. What was unique about this case, however, is that the DOJ said the physician met the definition of “foreign official” under the Foreign Corrupt Practices Act (FCPA), which signals how broadly the government can define that term under the FCPA.

In a second case, the NFED on July 29 announced its first declination of a healthcare company under the new CEP. That resolution concerned a criminal healthcare fraud investigation into management services organization, Campus Eye Management Holdings, and its wholly-owned subsidiary, Campus Eye Management, for “health care fraud, illegal kickbacks and bribes, and conspiracy,” the DOJ stated.

Key factors

Both cases offer lessons learned for companies and corporate counsel by highlighting four key factors that the DOJ will consider for a company that self-discloses to receive a declination, as set forth in the CEP.

Timely and voluntary self-disclosure: In both cases, the companies were credited with making timely and voluntary self-disclosures. In Balt’s case, the misconduct was “ongoing at the time of the disclosure,” according to the DOJ.

The DOJ’s Whistleblower Awards Pilot Program makes the timely reporting of a self-disclosure even more important. Even with a whistleblower report, the company may still qualify for a declination, as long as it self-reports the conduct “as soon as reasonably practicable but no later than 120 days after receiving the whistleblower’s internal report,” the CEP states. A regulatory audit and/or adverse media report are other factors that make a timely self-disclosure critical.

Full cooperation: In both cases, the companies also received credit for their “full and proactive cooperation” and their agreement to “continue to cooperate with any ongoing government investigations and prosecutions.”

Another critical element – shared by both cases – was the ability of the DOJ to hold accountable those who played a central role in the misconduct. The CEP explicitly states that a company fully cooperates when it “timely, truthfully, and accurately discloses all facts and non-privileged evidence relevant to the conduct at issue, including…facts and evidence about all individuals involved in or responsible for the misconduct at issue.” In the Balt case, for example, two co-conspirators behind the misconduct were indicted – David Ferrera, an executive at Balt’s U.S. subsidiary; and Marc Tilman, who was hired by Balt’s U.S. subsidiary as a consultant. In the Campus Eye case, the founder of the optometry practice and ambulatory surgery center was indicted for his role in that scheme.

Timely and appropriate remediation: Timely and appropriate remediation commonly involves taking disciplinary action against relevant individuals; terminating the business relationships that gave rise to the misconduct; tailoring anti-corruption compliance training; and enhancing compliance program and internal controls. Remediation can also vary sector-by-sector. For example, Campus Eye’s required remedial measures included, in part, “an internal review and subsequent revision of certain billing, payment, and compensation policies.”

No aggravating circumstances: Both cases also had no aggravating circumstances, which can include “the nature and seriousness of the offense, egregiousness or pervasiveness of the misconduct within the company, severity of harm caused by the misconduct, or corporate recidivism,” the CEP states. Lastly, as required by the CEP, Balt agreed to disgorge ill-gotten gains (a total of $1.2 million), while Campus Eye case agreed to pay back $1 million to victims of the scheme.

Practical takeaways

Not all scenarios will result in a declination. The CEP contains a flowchart of questions to help determine the likely outcome of a self-disclosure – whether it will lead to a declination, an NPA, or prosecution. Companies and corporate counsel should refer to this flowchart when deciding whether a self-disclosure is in the best interest of the company.

Assuming a decision has been made to self-disclose, however, the next step is to craft a carefully planned strategic response, including:

building alignment with outside counsel, compliance, and executive leadership before engaging with the government;
preparing to name individuals involved, including senior executives;
making current or former corporate officers, employees, and third parties “who possess relevant information” available for interviews;
collecting, preserving, and disclosing non-privileged documents, including documents located overseas, where such documents were found, their custodians, who authored and/or located the documents;
facilitating the production of third-party documents; and
Providing translations of relevant documents that are in foreign languages.

When necessary, the company bears the burden of showing when foreign law prohibits or restricts the disclosure of overseas documents, and of identifying “reasonable and legal alternatives” to help the DOJ obtain necessary facts, documents, and evidence for its investigations and prosecutions, the CEP states. The company must also ensure that its own internal investigation processes do not conflict or interfere with the government investigation.

While the investigation is ongoing, remedial measures should be underway, including disciplining or terminating culpable employees; conducting a root-cause analysis of the misconduct and a risk assessment of the company’s operations; updating the company’s Code of Conduct; and enhancing internal controls and anti-corruption training for relevant personnel.

The American Conference Institute will be holding its 43rd Annual Conference on FCPA and Global Anti-Corruption on Dec. 10-11, 2026, in Washington DC. For more information, and to register, please visit: https://www.americanconference.com/fcpa-dc/agenda/