The federal government and state governments reward whistleblowers based upon a percentage of the recovered funds resulting from reporting fraud. 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 whistleblower’s and his/her counsel compliance 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?
Submitting, or causing someone to submit, false or fraudulent claims to the government
If you are reporting false or fraudulent claims being submitted to the government for payment, you might have a case under the federal False Claims Act (FCA) and/or state false claims acts. Lawsuits under the FCA are known as a qui tam action. Click here for types of qui tam cases.
In the event of a successful federal qui tam action, the “Relator” (whistleblower) is entitled to between 15%-30% of the amount recovered by the government, plus legal fees and other expenses of the action. The percentage depends on, in part, whether or not the government intervenes in, or joins, the case. Click here for information on state whistleblower laws.
If the government intervenes, the whistleblower is entitled to receive 15-25% 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.
You might be wondering, 15-30% of what exactly? This is dependent on the case value. Violators of the FCA may be responsible to pay the government treble the amount of the government’s damages, plus $5,500 – $11,000 for each false claim presented to the government. This can add up quickly!
If you are reporting financial fraud, such as violations of the securities and banking laws, then your best bet may be to have an attorney report the allegations to the Securities and Exchange Commission (SEC). As part of the SEC Whistleblower Program, participants can be awarded between 10-30% of the sanctions collected in the results of the investigation, when these sanctions amount to at least $1 million.
Click here for more information on the SEC whistleblower program.
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 15-30% of the actual money recovered by the government if the taxes, penalties, interest and other amounts in dispute exceed $2 million; or if the case deals with an individual, the individual’s annual gross income exceeds $200,000.
The IRS also has an award program for whistleblowers who do not meet the thresholds of $2 million in dispute or $200,000 annual gross income. The maximum award through this program is 15% of the amount collected, up to $10 million.
Whistleblower’s Compliance in the Government’s investigation
In deciding what percentage of the proceeds to award the whistleblower, the court will take into account the role of the whistleblower in advancing the case to litigation. The government’s attorneys will often work with the whistleblower and his/her counsel to build the case. Providing details of extreme importance to the case and offering considerate assistance to the government throughout its investigation will certainly increase the whistleblower’s award. A strong and experienced whistleblower attorney will make the difference between winning and losing a case.