Our lawmakers recognize the incredible risks that whistleblowers take in bringing information to the government. To reward whistleblowers for that risk and to encourage them to come forward, lawmakers have established a reward system that allows whistleblowers to share in the government’s recovery. The entitlement to an award varies by whistleblower program. Here is the reward structure under the various whistleblower programs:
Federal False Claims Act
Under the Federal False Claims Act, whistleblowers are generally entitled to between 15 percent to 30 percent of the government’s recovery. The minimum and maximum award depends on whether the government intervenes in the case. If the government does intervene, the whistleblower is generally entitled to no less than 15 percent and no greater than 30 percent of the government’s recovery. If the government does not intervene, the whistleblower is entitled to no less than 25 percent and no more than 30 of the government’s recovery. The amount of the whistleblower’s share in the ranges depends on a number of factors, including the extent to which the whistleblower substantially contributed to the prosecution of the matter.
State False Claims Acts
There are 31 states with false claims act statutes that provide whistleblowers a reward in the event of a state government’s recovery. Most are mirrored after the Federal False Claims Act, and provide an award between 15 and 30 percent of the state’s recovery. Several states, including California and Tennessee, allow whistleblower awards of up to 50 percent of the government’s recovery.
SEC Whistleblower Program
If the SEC recovers more than $1 million as a result of original information properly submitted by a whistleblower, the whistleblower is generally entitled to no less than 10 percent and no more than 30 percent of the recovery. If there are additional recoveries in certain related actions, such as a civil or criminal proceeding brought by the U.S. Department of Justice, the whistleblower may be entitled to a percentage of such recoveries, as well. The amount of a whistleblower’s award under the SEC Whistleblower Program depends on a variety of factors, including the significance of the whistleblower’s information, the degree of the whistleblower’s assistance, and the SEC’s interest in deterring future misconduct and encouraging whistleblower’s to come forward.
The CFTC Whistleblower Program
Like the SEC program, if the CFTC recovers more than $ 1 million as a result of original information properly submitted by a whistleblower, the whistleblower is entitled to between 10 percent and 30 percent of the recovery. Whistleblowers may also be entitled to a percentage of the recoveries made in certain related actions, such as the U.S. DOJ civil or criminal proceedings. The criteria for setting the award is similar to that in the SEC Whistleblower Program, and includes the significance of the whistleblower’s information, the degree of the whistleblower’s assistance, and the CFTC’s program goals of deterring future wrongdoing and encouraging whistleblower’s to come forward.
The IRS Whistleblower Program
Under the IRS Whistleblower Program, if a whistleblower reports underpayment of taxes that exceeds $2 million, including penalties and interest, and meets the other program requirements, the whistleblower is entitled to between 15 percent to 30 percent of the amount the IRS recovers based on that information. If the case deals with an individual, the individual’s annual gross income must exceed $200,000 for the whistleblower to be eligible for an award.
FIRREA/FIAFEA Whistleblower Actions
Under FIAFEA’s whistleblower provisions, if the United States recovers under FIRREA based on original information brought by the whistleblower, the whistleblower is entitled to 20 percent to 30 percent of the first $1,000,000 recovered, 10 percent to 20 percent of the next $4,000,000 recovered, and 5 percent to 10 percent of the next $5,000,000 recovered, for a total potential recovery of $1.6 million.