The federal government and some state governments reward whistleblowers based upon a percentage of the funds recovered as a result of the whistleblower’s report of fraud or other misconduct.
How much can a whistleblower earn? The percentage of a whistleblower award depends on several factors, including:
- the type of case involved;
- whether the government intervenes in the case (when applicable); and
- the amount of assistance provided by the whistleblower and the whistleblower’s counsel to the government during the investigation of the fraud.
Whistleblower rewards can be quite significant, with one of the highest whistleblower awards to date being $104 million!
Types of whistleblower awards
The rules for the whistleblower awards depend on the type of fraud at issue, and therefore which whistleblower program applies. (For instance, securities law violations and government contractor fraud would be reported under different whistleblower reward programs).
The key whistleblower laws and programs include:
- The False Claims Act
- The Dodd-Frank Act (which relates to both the SEC whistleblower program and the CFTC whistleblower program)
- Financial Institutions, Reform, Recovery and Enforcement Act of 1989 (FIRREA)
- The IRS whistleblower program
False Claims Act whistleblower awards
If you are reporting false or fraudulent claims submitted to the government for payment, you may have a case under the federal False Claims Act and similar state false claims acts. A lawsuit under the False Claims Act is known as a qui tam action.
Types of fraud that would be reported under the False Claims Act include healthcare and Medicare fraud, defense contract fraud, customs fraud, research grant fraud, college recruitment fraud, and more.
In the event of a successful federal qui tam action in which the government has intervened, the whistleblower is entitled to between 15% and 25% of the amount recovered by the government.
If the government declines to intervene in the action, and the whistleblower and his/her counsel decide to litigate the case, then the whistleblower’s share is increased to 25-30% of the proceeds. Click here for information on the qui tam process. Under state false claims acts, the ranges of potential recoveries are similar. Click here for more information on state whistleblower laws.
SEC whistleblower program
If you have information concerning financial fraud, such as securities law violations or foreign bribery, you may have a claim under the Securities and Exchange Commission (SEC) whistleblower program.
If a report of fraud leads to a recovery of $1 million or more, the whistleblower may be entitled to between 10% and 30% of the amount the SEC recovers.
IRS whistleblower program
If you suspect that a business or an individual is failing to pay income taxes or committing some other form of tax fraud, you may have a claim under the Internal Revenue Service (IRS) Whistleblower Program.
In calculating the amount of the whistleblower award, the IRS uses a range of 15% to 30% of the actual money recovered by the government where the proceeds in dispute exceeds $2 million (or, in the case of an individual taxpayer, where the taxpayer had gross income exceeding $200,000).
CFTC whistleblower program
As noted, the Dodd-Frank Act also created a whistleblower award program at the Commodities Futures Trading Commission (CFTC) for individuals to report violations of the Commodity Exchange Act.
A whistleblower may be entitled to an award of between 10% and 30% of the amount collected by the government if the information leads to the recovery of at least $1 million under the CFTC whistleblower program.
This whistleblower program also has confidentiality and anti-retaliation provisions that are similar to the whistleblower protections in the SEC’s whistleblower program.Click here for more information on the CFTC whistleblower program.
Whistleblower’s assistance with the government’s investigation
In deciding what percentage of the proceeds to award the whistleblower, the government will take into account the role of the whistleblower in advancing the case to a resolution.
The government’s attorneys often will work with the whistleblower and his/her counsel to build the case. In some cases, the government will ask the whistleblower’s counsel to play an active role in the investigation, including by drafting document requests and reviewing documents.
Prompt and able assistance to the government will enhance the ability of the whistleblower to receive a larger share of any recovery that the government obtains. The skill of the whistleblower’s attorney thus can add significantly to the whistleblower’s chances of obtaining a larger award, which is one of several reasons why having the right attorney is so crucial when bringing a whistleblower claim.
Timeframe for receiving a whistleblower award
The timeframe for receiving an award can vary greatly depending on the specific case and the government agency handling the investigation. In some cases, the process can take years, with appeals and legal challenges prolonging the process.
It is important to note that the investigation and resolution of the case must take place before an award can be granted. This means that whistleblowers should not expect to receive an award immediately after making a report. The process can be lengthy and may involve multiple government agencies.
Additionally, the amount of the award will depend on several factors, including the monetary sanctions collected as a result of the whistleblower’s information, the extent to which the whistleblower assisted in the investigation, and whether the information provided was original and not already known to the government.
Contact a whistleblower attorney
Contact us for a free confidential assessment of whether you might have a potential lawsuit that could result in a whistleblower award:
- Contact us for a free confidential consultation
- Call us at (617) 823-3217