Since the modernization of the FCA’s qui tam provisions in 1986, whistleblower-initiated actions have led to the recovery of over $52.7 billion, showcasing the substantial impact of these efforts on combating fraud. However, there has been criticism directed at the DOJ for not intervening in or dismissing robust whistleblower cases, as well as for not implementing the confidential reporting requirements mandated by the Anti-Money Laundering Act of 2020.

In the Fiscal Year 2023, the Department of Justice (DOJ) revealed that over $2.3 billion was recovered through qui tam whistleblower cases under the False Claims Act (FCA) – a significant achievement in the fight against fraud.

This amount represents more than 85% of the total $2.68 billion recouped from settlements and judgments during the year. The substantial portion of recoveries attributed to whistleblower actions underscores their vital role in exposing fraud and protecting public funds.

$52.7 billion recovered by whistleblowers since 1986

Stephen M. Kohn, a whistleblower attorney of Kohn, Kohn & Colapinto, said: “The statistics once again show that whistleblowing works. Whistleblowers are the government’s number one source of fraud detection. Year after year, whistleblowers recover billions of dollars for taxpayers. These whistleblowers come forward at grave risk to themselves and their livelihoods. It is high time that the DOJ fully supports whistleblowers.”

The False Claims Act (FCA) allows individuals with knowledge of fraud against government contracts to file qui tam lawsuits on behalf of the U.S. government. The DOJ can choose to intervene in these cases, but even without DOJ intervention, whistleblowers have the right to proceed with litigation.

Since the modernization of the FCA’s qui tam provisions in 1986, whistleblower-initiated actions have led to the recovery of over $52.7 billion, showcasing the substantial impact of these efforts on combating fraud. However, there has been criticism directed at the DOJ for not intervening in or dismissing robust whistleblower cases, as well as for not implementing the confidential reporting requirements mandated by the Anti-Money Laundering Act of 2020.

Whistleblowers can earn up to 30% of the total monetary sanctions collected

The AMLA expanded whistleblower rewards and protections to encourage more individuals to report violations of anti-money laundering laws. Under the AMLA, when a Department of Justice or Treasury Department enforcement action results in monetary sanctions exceeding $1 million, whistleblowers who provide original information leading to a successful enforcement action are entitled to an award. The law specifies that such whistleblowers must be paid, removing the previous discretionary language and potentially increasing the willingness of individuals to come forward with information.

The AMLA’s whistleblower awards can now reach up to 30% of the total monetary sanctions collected, a significant increase from the previous cap of $150,000. There’s no upper limit to the awards under the AMLA, making the prospect of whistleblowing more financially appealing to potential informants.

Moreover, the AMLA includes robust protections against retaliation, allowing whistleblowers to report violations not only to their supervisors and federal agencies but also directly to Congress, further safeguarding their rights and encouraging the reporting of misconduct.

Comparatively, the AMLA includes provisions similar to those found in the Dodd-Frank whistleblower regime, offering awards to multiple whistleblowers, allowing for anonymous submissions through attorneys, and providing protection from employer retaliation. Unlike Dodd-Frank, the AMLA does not require whistleblowers to first report violations internally or to the SEC to be protected from retaliation.

However, the AMLA also faces criticism for not including a minimum award percentage for whistleblowers and excluding forfeiture and restitution from the sanctions that can result in whistleblower awards, potentially limiting its effectiveness in encouraging reports of money laundering activities