Whistleblowers, also known as qui tam relators, who come forward with valuable information regarding a corporation’s fraud against the government may receive a whistleblower reward. Examples of reportable fraud include health care scams, PPP loan abuse, securities and banking fraud, and more. Whistleblower rewards are determined based on a percentage of the defrauded funds that are successfully recovered under a qui tam lawsuit or through a whistleblower claim involving the SEC, IRS, or CFTC.
At Tycko & Zavareei LLP, our qui tam attorneys have represented whistleblowers across the country in cases that have resulted in the successful recovery of more than $7 billion. If you have proof of fraud against the government or questions about filing a whistleblower claim, contact the whistleblower lawyers of Tycko & Zavareei LLP today for a free, confidential legal consultation.
What is a Whistleblower Reward?
In the U.S., an employee or other individual who files a claim with proof of a company’s fraud against the government is defined as a whistleblower. A whistleblower or qui tam relator who files a successful whistleblower claim is paid a financial award in the amount of between 15 and 25 percent of the total defrauded funds that are recovered by the government if the government agrees to come on to the case. In cases where the government does not join and the qui tam relator and their attorney pursue the case on their own, the whistleblower is eligible to receive up to 30 percent of the successfully recovered funds.
How Do You Get Paid for Whistleblowing?
Under specific U.S. whistleblower laws, both private U.S. citizens as well as foreign nationals who come forward with a whistleblower tip that results in the government recouping stolen, defrauded, or owed funds are eligible to receive a financial award. Some of the most significant financial reward programs include the False Claims Act, the Securities Exchange Act, the Commodities Exchange Act, and the Foreign Corrupt Practices Act.
Other laws that provide financial rewards, although not as broadly applicable as the previously mentioned statutes, include the Auto Safety Act, the Act to Prevent Pollution from Ships, the Lacey Act, and the Endangered Species Act.
Do You Have to Be an Employee of the Company Committing Fraud to Qualify for a Whistleblower Reward?
You do not have to work for the company committing fraud in order to report what you know as a whistleblower and claim a potential reward if the claim is successful. It is very common to be an employee who chooses to blow the whistle on a corrupt employer. However, others may have access to useful information through other channels.
Many whistleblowers are competitors in a similar field, and therefore have in-depth knowledge of what kinds of rates and business practices are standard. Others may be contractors or similar professionals who many have more insight into the inner workings of a company. Anyone with access to previously unreported, unique information can speak up to become a whistleblower.
What Rewards Are Available for Federal Employee Whistleblowers?
Federal employees who become whistleblowers are protected by the Whistleblower Protection Act (WPA) (5 U.S.C. § 2302(b)(8)). Federal employees who disclose any of the following to a protected source, such as law enforcement, a member of Congress, Inspector General, the courts or a jury, or in some specific cases members of the media, may qualify for protections against retaliation. Protected disclosures include:
- Violations of law, rule, or regulation
- Waste, fraud, and abuse
- Substantial and specific danger to health or public safety.
In addition, federal whistleblower rewards are available to employees who voluntarily speak up about waste, fraud, abuse or mismanagement. Under both the Environmental Protection Agency OIG Cash Awards Program as well as the Department of Defense OIG Cash Awards Program, employees can earn $10,000 or an amount equivalent to 1% of the agency’s cost savings as a reward for their disclosure.
Do State-Level Employees Qualify for Whistleblower Rewards?
Each state offers its own statutes and exemptions to whistleblower law. Consult with an experienced qui tam attorney to find out if your state allows municipal or state employees to claim whistleblower rewards in exchange for disclosures of fraud. In many states, only healthcare fraud, such as attempts to illegally claim state Medicaid or Medicare funds, is reportable under qui tam law. However, in many cases it is permissible to join a federal claim with a state concern in order to file jointly under both state and federal law.
International Whistleblower Rewards
Some of the largest ever whistleblower awards have been obtained in international qui tam cases. Especially in cases involving tax evasion and financial fraud, international whistleblowers have an important role to play in leveling the playing field. In FY 2022, international and offshore issues were among the top ten most common allegations submitted to the Internal Revenue Service Whistleblower Office. Of all fraud claims submitted to the Office of the Whistleblower in FY 2022, 97 whistleblowers were foreign nationals or US citizens located abroad.
Many potential qui tam relators are apprehensive to file a whistleblower claim, despite knowledge of a company’s fraud against the government, due to the fear of the company possibly retaliating against them. Under the False Claims Act and other whistleblower programs, whistleblowers are afforded protection from retaliation for their bravery in coming forward with a claim.
What is whistleblower retaliation?
Any adverse or discriminatory action taken by a company against an employee for filing a whistleblower claim may be considered whistleblower retaliation and is prohibited under whistleblower protection laws. Whistleblower retaliation may include termination, demotion, suspension, withholding pay or benefits, threatening, or discriminating against a whistleblower.
How are whistleblowers protected?
If an employee is subject to retaliation as a result of coming forward with a whistleblower claim, the whistleblower has the right to file a lawsuit against their employer in order to seek reinstatement, back pay plus interest, possible front pay, and reasonable attorneys costs and fees.
Can my employer retaliate?
If you have come forward with a whistleblower claim, you are protected from retaliation by your employer under the False Claims Act. If you are experiencing retaliation after filing a whistleblower claim, contact the qui tam lawyers of Tycko & Zavareei LLP today to understand your legal options.
Whistleblower Rewards and Programs
The following are the most common whistleblower reward programs:
Medicare Whistleblower Rewards
Under the False Claims Act, attempting to illegally draw down state or federal Medicare funds may be reported by a qui tam relator who is then eligible to receive anywhere from 15-30% of the overall settlement. In a successful fraud case, each count of submitting or causing to submit a false claim to the government is subject to treble damages. In Medicare fraud cases, settlements can quickly climb into the hundreds of thousands or million dollar range.
SEC Whistleblower Rewards
Under the Dodd-Frank Act, whistleblowers whose tips regarding securities and exchanges fraud lead to the successful recovery of over $1,000,000 are eligible to receive between 10 and 30 percent of the funds collected as a financial reward. The SEC Whistleblower Rewards Program has paid out over $1 billion for whistleblower tips that resulted in enforcement actions since the program’s inception in 2011. The SEC Whistleblower Program has also recovered over $6 billion in defrauded funds and sanctions. To date, the single highest SEC whistleblower award was $279 million in 2023.
IRS Whistleblower Rewards
If a whistleblower’s tips regarding corporate tax fraud lead to the successful recovery of over $2,000,000, the IRS will pay the whistleblower a financial reward of between 15 to 30 percent of the recovered funds. The largest IRS whistleblower reward to date is $104 million.
CFTC Whistleblower Reward Program
Under the Dodd-Frank Act, qui tam relators with tips regarding commodities fraud that lead to the recovery of over $1,000,000 receive a financial reward from the Commodity Futures Trading Commission (CTFC) of between 10 and 30 percent of the total recovered funds. The largest financial reward given to a whistleblower by the CTFC was nearly $200 million.
Dodd-Frank Act Whistleblower Rewards
Under the Dodd-Frank Act, agencies must pay mandatory financial rewards to whistleblowers who report on violations that result in successful settlements under the IRS, SEC, or CFTC whistleblower programs. This 2010 financial reform bill structured percentages that whistleblowers may receive anywhere from 10 to 30% from a successful financial fraud settlement. It also enabled the SEC to pursue additional legal protections for whistleblowers who report anonymously.
Anti-Money Laundering Reward Program
Whistleblowers with tips regarding money laundering who assist in the recovery of over $1,000,000 may receive a financial award of up to 30% of the total recovered funds.
Qui Tam Whistleblower Rewards
Qui tam relators with claims regarding government contract fraud, healthcare fraud, and other government programs fraud may receive between 15 to 30 percent of successfully recovered funds.
FCPA Whistleblower Rewards
The Foreign Corrupt Practices Act rewards whistleblowers who report on instances of bribery or corruption between US-based, publicly-traded companies or US citizens and foreign government officials. The FCPA also mandates strict recordkeeping policies, and sanctions may be ordered in cases of violation even when bribes are not exchanged. FCPA whistleblowers can receive anywhere from 10-30% of sanctions obtained by the US government. You do not have to be a US citizen to report on a violation of the FCPA, and you may do so and claim your reward anonymously.
EPA Whistleblower Rewards
The EPA OIG Cash Awards Program offers monetary awards to EPA or CSB employees who report on fraud, waste, or mismanagement within the department. EPA OIG employees are not eligible, but EPA or CSB whistleblowers may earn up to $10,000, or up to 1% of the agency’s total cost savings. Award amounts are determined in accordance with Title 5, United States Code, Section 4512. EPA whistleblower disclosures must be made voluntarily, and result in an investigation that generates savings to the department.
Private Prison Whistleblower Rewards
Approximately 8% of inmates in the United States are currently held in privately-owned prisons. The private prison industry has expanded in recent years by about 14% across the country, and by much higher rates in certain states such as Montana, Arizona, Hawaii, New Mexico, Oklahoma, Florida, and Tennessee.
Private prison fraud may be reported under the False Claims Act, and whistleblowers can receive 15-30% of the total settlement from a successful claim. Private prison whistleblowers who report on government contract fraud, failure to meet “Performance Based National Detention Standards” (PBNDS), the offering or receipt of kickbacks, abuse of detainees, and more can help hold these corporations accountable, and protect those incarcerated from inhumane conditions.
DoD Whistleblower Rewards
The Department of Defense OIG Cash Awards Program, like the EPA equivalent, offers whistleblowers the chance to earn up to $10,000 or amount equal to 1% of the agency’s total cost savings from a protected disclosure. DOD OIG Whistleblowers who report fraud, waste, or mismanagement that results in cost savings are eligible for the program. DoD civilian employees and NAFI employees may be considered for a whistleblower reward under Title 5, United States Code, Section 4512.
Tax Whistleblower Rewards
In cases involving tax evasion, underpayment, non-payment, misreporting, and more, IRS whistleblowers may be able to win cash awards in exchange for their information. The claim must involve at least $2 million of defrauded tax funds in order to qualify for a whistleblower reward under the program.
Top Whistleblower Rewards
The law offices of Tycko & Zavareei LLP are experienced in helping whistleblowers who report information through the firm secure significant financial rewards. When the stakes are high, you need an expert whistleblower attorney by your side to communicate with federal investigators, build a successful case, and follow through on any related state or local claims. Tycko & Zavareei LLP has a track record of excellence, including handling some of the largest kickback and healthcare fraud settlements reported to this day. Other whistleblower successes include:
- Booz Allen Hamilton, Inc. (Booz Allen) settlement: $69,828,832 whistleblower reward
- Eos Energy Enterprises, Inc. settlement: $221,552 whistleblower reward
- Online pharmacy fraud settlement: $1,197,000 whistleblower reward
Whistleblower Rewards: FAQs
The following are some frequently asked questions about becoming a whistleblower and receiving a whistleblower reward. If you have questions about the specifics of your case, however, contact a whistleblower attorney for help.
Do whistleblowers get paid?
When a whistleblower’s tips or inside knowledge lead to the government recouping defrauded funds, the whistleblower is entitled to a percentage of the total amount recovered. This falls between 15 and 30 percent.
Why are whistleblowers rewarded?
Whistleblowers receive financial compensation as a reward for their honesty, as well as to incentivize others to come forward. Whistleblowers protect taxpayer funds and save the government money. Because of this, they can earn a percentage from the overall settlement that would not have otherwise been recovered, if not for their actions.
How long does it take to get whistleblower money?
There is exact time frame for when a whistleblower will have their reward in hand. In some cases it can take months and in others it can take a few years. It may take longer if the claims are contested in court. Hiring a qualified whistleblower lawyer can help ensure that during this period you are not tied up in the legal action, and can rest assured that professionals are following up on your claim.
What is the largest whistleblower reward?
The current record for largest whistleblower award was presented by the SEC in May of 2023. The award, close to $279 million, more than doubled the previously highest-ever award of $114 million. According to the Director of the SEC’s Enforcement Division, “This success directly benefits investors, as whistleblower tips have contributed to enforcement actions resulting in orders requiring bad actors to disgorge more than $4 billion in ill-gotten gains and interest. As this award shows, there is a significant incentive for whistleblowers to come forward with accurate information about potential securities law violations.”
Is whistleblower money taxable?
Whistleblower payouts are considered taxable income by the IRS. Whistleblowers who reside in states without income tax, such as Florida or Nevada, may have different tax liabilities depending on state law. It is important to note that the gross award, including the overall percentage allocated for legal fees or costs in the case, is considered as taxable by the IRS.
Who pays whistleblower rewards?
Whistleblower rewards are paid out from settlement amounts and sanctions taken in by the federal government after a successful recovery. Payments for SEC whistleblower rewards are made from a separate investor protection fund established by Congress. The award amounts are financed by monetary sanctions, and do not come out of harmed investors’ pockets.
Is the whistleblower protected by law?
Yes. Once a whistleblower has reported their protected disclosure, they are protected by a number of both federal and state statutes, depending on the nature of their claim. By law, you may be able to sue your employer if they discriminate against you, harass you, demote you, fail to promote you, dock your wages, pay or hours, or otherwise retaliate against you due to your standing as a whistleblower. Contact a US whistleblower rewards attorney to understand what kinds of legal protections you may qualify for in cases involving international whistleblower claims as well.
Can I Qualify for a Whistleblower Reward?
Coming forward with a whistleblower claim and exposing corporations and similar entities who seek to defraud the government is a brave way to both help stop fraudulent business practices and also protect American citizens’ tax dollars. If you have private information regarding a company defrauding the government or otherwise violating the False Claims Act, contact the whistleblower lawyers of Tycko & Zavareei LLP today for a free case evaluation. Significant qui tam whistleblower rewards are available for qualifying information.