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 depends on several factors, including: the type of case, 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!
What type of fraud are you reporting?
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/or state false claims acts. A lawsuit under the False Claims Act is known as a qui tam action.
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 jointly 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.
If you have information concerning financial fraud, such as violations of the securities laws or foreign bribery, you may choose to have an attorney prepare a report of that information for the Securities and Exchange Commission (SEC). Under the 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.
If you suspect that a business or an individual is failing to pay income taxes, you would have an attorney submit your allegations to the Internal Revenue Service (IRS) through its 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 if the taxes, penalties, interest and other amounts in dispute exceed $2 million. If the case involves less than $2 million, or if it involves an individual with a gross income of less than $200,000, then the maximum award through this program is 15% of the amount collected.
Whistleblower’s assistance with the government’s investigation
In deciding what percentage of the proceeds to award the whistleblower, the government and/or the court 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.