Whistleblowers who know of fraud either in the regulation of securities, commodities, options and futures, banking and mortgages or in the reporting and payment of taxes, customs duties and tariffs can file complaints under federal agency whistleblower programs, including with the SEC, CFTC, IRS, and the DOJ. In addition, they may be able to file a False Claims Act qui tam complaint in court. As former prosecutors and as whistleblower lawyers, we are familiar with the priorities of the agencies that enforce these laws and have the expertise to present a compelling case on behalf of our whistleblower clients.
The U.S. Securities and Exchange Commission (SEC) whistleblower program offers significant protections and financial awards to individuals or groups of individuals who voluntarily provide information involving false financial reporting, fraudulent offerings, market manipulation, insider trading, and similar securities law violations as well as bribery and kickbacks to foreign officials in violation of the Foreign Corrupt Practices Act.
The U.S. Commodity Futures Trading Commission (CFTC) whistleblower program offers significant protections and financial awards to individuals or groups of individuals who voluntarily provide information about fraud or market manipulation involving futures, options, swaps, forex, commodities or leveraged transactions, or similar violations of the Commodity Exchange Act.
The federal and state governments depend on tax revenues to fund their programs. In a recent analysis of the nation’s ‘tax gap,’ the Internal Revenue Service (IRS) estimated that corporations and individuals fail to pay more than $450 billion in federal taxes each year. States also suffer from significant unpaid taxes, including income and sales taxes. The IRS actively encourages whistleblowers to come forward to report those who fail to pay their fair share of federal taxes through a whistleblower tip program established in 2006.
Federal law provides financial incentives of up to $1.6 million for whistleblowers who confidentially report fraud and related misconduct in the banking and financial services industries to the U.S. Department of Justice. In addition, the federal and state False Claims Act qui tam or whistleblower provisions may be used in certain banking and mortgage fraud cases.
Customs duties are the second largest source of revenue for the U.S. government after federal taxes. Our customs system relies on importers accurately reporting the type, value, and country of origin for the merchandise they bring into the U.S. as well as paying their import duties. But one study by the Government Accounting Office estimated that the government fails to collect over $440 million in customs duties each year due to noncompliance with U.S. import laws. Federal courts and the U.S. Department of Justice have shown increasing support for use of the False Claims Act to combat and deter customs fraud.