Individuals who are citizens of any country inside or outside the United States, who have information concerning fraudulent billing, foreign bribes, securities fraud, tax evasion or military contract fraud may become whistleblowers under U.S. laws and may be eligible for rewards for revealing the fraud. For example, in May of this year, a former orthopedic surgeon from Brazil received an award of $4.5 million for information which he rendered to the Securities & Exchange Commission regarding violations of the U.S. Foreign Corrupt Practices Act involving bribes to public officials in Brazil and Mexico to obtain business. Under the SEC rules, whistleblowers are entitled to between 10% and 30% of the monetary recovery when it exceeds more than $1 million.Zimmer Biomet Settlement
Perhaps the most famous international whistleblower to date to receive an award in the U.S. for revealing fraud is Dinesh Thakur, a chemical engineer who worked for a Pharmaceutical manufacturer in India called Ranbaxy. Mr. Thakur revealed that the company falsified essential data about the safety of Ranbaxy drugs and he reported this to the U.S. FDA. Based on this information and a detailed investigation, the company pleaded guilty to criminal felony charges and paid $500 million in fines and settlements. Mr. Thaur eventually received $48.6 million for his role in revealing this fraud.
In a separate case, the U.S. Government criminally prosecuted and obtained more than $1 million from British defense contractor ECL Solutions Limited, Inc. (“ECL”) thanks to the help of whistleblower Todd Mihajlovic from the United Kingdom. Mr. Mihajlovic, a former employee of ECL, reported that ECL hid the fact that the steel racking systems it sold to the U.S. military were made in China. This deception enabled ECL to pass off its shelving product as compliant with the Buy American Act and Trade Agreements Act when, in fact, it was using prohibited Chinese steel.
In yet another occurrence, an American whistleblower living in Nicaragua revealed a $25 million fraud which involved a Florida health insurance company that illegally billed Medicare, a U.S. government-funded healthcare system, for services performed in Nicaragua on former U.S. residents.Under the U.S. whistleblower rewards programs, whistleblowers need not be U.S. citizens or even residents. Anyone with knowledge of fraudulent conduct can file a claim under the FCA, or under the whistleblower programs of the Internal Revenue Service (for tax fraud), the Securities and Exchange Commission (for securities fraud), or the Commodity Futures Trading Commission (for commodities fraud).
The Foreign Corrupt Practices Act (FCPA) prohibits U.S. companies and foreign companies subject to U.S. regulation and individuals from bribing foreign government officials to obtain business or gain any business advantage.
Also, our government imposes sanctions against some nations for their actions against the U.S. such as Iran and Syria. There are stringent laws which say that companies or individuals subject to U.S. jurisdiction may be prosecuted and fined for violating U.S. sanctions. Such violations are frequently revealed by whistleblowers who are citizens of countries outside the U.S.
The IRS whistleblower program also offers substantial rewards to whistleblowers who report fraudulent avoidance of U.S. taxes. Although the IRS program has been less prominent, reports indicate that the IRS has a particular interest in hearing about: “US taxpayers with illegal offshore accounts around the world – especially Hong Kong, Singapore and Central America.”
American law enforcement agencies including the Department of Justice and Customs authorities rely in part on foreign whistleblowers to reveal customs tariff evasion including by China.
Jeffrey Newman represents whistleblowers and his form is presently representing whistleblowers from Mexico and the United Kingdom in tariff evasion cases.