Aug 21

Can you get a whistleblower reward for wearing a wire for the FBI?

One of the frequent questions I get as a law firm dedicated exclusively to helping whistleblowers file for rewards is whether a cooperating witness is entitled to a whistleblower reward after wearing a wire to help the FBI or federal agency prove fraud against the government. The answer is that it all depends on when and how you apply for a reward. Allow me to go over the three key issues that dictate the result as to whether you get a reward for wearing a wire for the FBI.

As an initial matter, there is a federal whistleblower reward program that pays between 15% and 25% of what funds a wrongdoer repays to the government. For example, if the defendant cheated the military or Medicare by $5 million and repays that amount, the reward can be as high as $1.25 million.

Now let’s talk about whether a person is entitled to a reward for cooperating with the government, such as wearing a wire (or alternatively, calling a hotline). The short answer is that wearing a wire does not entitle you to a whistleblower reward. However, if you are wearing a wire for the FBI or other government agency (or someone who called a hotline), you are likely in a position to have the right type of information that does entitle you to a whistleblower reward.

Here is how the reward programs work.

The main federal whistleblower reward program is administered by the U.S. Department of Justice under the False Claims Act. This reward program has some very specific requirements for earning a reward, and I am going to discuss three key procedural rules that often apply.

The first requirement is that you must hire an attorney (which is normally on a contingency basis) and formally apply for a reward by filing a qui tam complaint in court alleging in detail the fraud against the government. In short, it is not enough to wear a wire or even call a hotline to report fraud to get a reward. You must formally apply for a reward using an attorney and comply with all the procedures of the False Claims Act statute.

The second requirement is that you file for a reward before another eligible whistleblower files a claim for the reward. This is known as the first to file rule. Rather than divide up the reward based upon who contacted the government first, who provided better information, or cooperated most, the reward program pays only the first eligible whistleblower that applies. For example, if you were the first to contact the FBI or a government official and even if you wore a wire to help prove the fraud, if another employee of the company hires an attorney first and files for a reward, you are second in time and barred by the first to file rule. (That’s one of many reasons why I caution whistleblowers not to brag or tell others that they are interested in a reward or helping the government prove a fraud case.)

The third requirement kicks in only if a whistleblower did not formally apply for a reward until after the fraud allegations already made its way into the news media. This limitation is known as the pubic disclosure bar. But, the good news is that there is an exception to the rule that you very well might fit within.

Here is how it works. Assume that you did not know of the reward program at the time you agreed to wear a wire to help the FBI catch a crook cheating the military or Medicare. Assume that you did not find out about the reward program until after the U.S. Attorney issued a press release announcing an indictment. At that moment in time, the public disclosure bar begins to apply to any reward applications not already filed. If the bar applies, you would need to possess “original source” information to meet the exception to the rule, which generally requires that you have previously disclosed to the government the fraud scheme or that you have information not contained in the media report that the government considers valuable. That element could be met by a person wearing a wire, assuming you told the government of the fraud as part of the sequence of wearing the wire in the first place or the government finds your additional information valuable.

The advice I have for anyone who wore a wire or called a hotline (or are considering doing so) is to contact an experienced whistleblower reward attorney as soon as possible. Your communication with an attorney is privileged and confidential. They can guide you with whether or when you should apply for a reward.

It is also important to get legal advice because the FBI or government agents don’t really want you to apply for a reward because the defendant would argue at the criminal trial that you were biased because you applied for a reward that consists of 15% to 25% of the amount the defendant repays to the government. Your attorney can talk directly to the FBI or prosecuting attorney and coordinate issues that affect you or your family and your interest in and eligibility for filing for a reward.

You will want to discuss all of these issues in confidence with an experienced attorney that has handled these types of whistleblower reward cases. Only then will you know for sure if wearing a wire for the FBI or government will entitle you to a whistleblower reward. The Hesch Firm would be pleased to review your potential reward application decision in strict confidence. (You can fill out our questionnaire on this website if you want The Hesch Firm to consider your case.)

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