What is a bank fraud whistleblower case?
Two statutes establish the framework for banking fraud whistleblower cases: the Financial Institutions Anti-Fraud Enforcement Act of 1990 (FIAFEA) and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). FIRREA, which was enacted in the wake of the savings and loan crisis of the 1980s, gives the U.S. Attorney General the power to bring civil actions in banking fraud cases, seeking statutory penalties for violations of various criminal laws that apply to the banking industry, including bank fraud, wire fraud, and mail fraud. “Bank fraud,” as well as mail and wire fraud, are broadly defined such that almost any fraud on a bank by its customers, or by a bank’s own employees, officers or directors, may come within the scope of the FIRREA civil penalties provision.
FIAFEA was enacted a year after FIRREA and its goal was to encourage whistleblowers with information about fraud on or by banks to come forward with that information, so that the Attorney General could use that information to ferret out FIRREA violations. In exchange for providing the Attorney General with information of a FIRREA violation, the whistleblower was entitled to a monetary reward.