The 11 Largest Whistleblower Rewards
5 days ago bryce 0
Whistleblower Reward Programs
The federal government offers protection and incentives to whistleblowers in all kinds of industries who can help expose fraudulent practices. Inspired by a purpose to bring perpetrators of wrongdoing to justice, the following programs strive to make blowing the whistle a safe and fulfilling decision.
Department of Justice
- If a company violates the False Claims Act, the government can collect up to three times the amount it lost as a result of the fraud.
- Whistleblowers who provide evidence that confirms the fraud will find themselves entitled to 15-25% of the recovered funds.
- The IRS whistleblower program empowers individuals to report tax fraud.
- If the penalties resulting from the fraud exceed $2 million, the whistleblower may receive 15-30% of the amount collected.
SEC and CFTC
- The Dodd-Frank Act of 2010 instituted new whistleblower programs to combat fraud in the financial marketplace.
- If the sanctions levied against the perpetrator(s) surpass $1 million, the whistleblower is entitled to 10-30% of the amount collected.
Below is a list of the largest whistleblower rewards in history.
The 11 Largest Whistleblower Rewards of All Time
- $104 Million paid by UBS (2012)
- Bradley Birkenfeld received the most handsome whistleblower reward in history after he reported the tax fraud perpetrated by UBS to the IRS. Before he could enjoy his wealth, however, Mr. Birkenfeld had to spend 40 months in prison as payment for his own participation in the fraud.
- $102 Million paid by Pfizer (2009)
- Ten Pfizer employees shared a $102 million award for revealing the company’s unlawful marketing of the arthritis drug Bextra. John Kopchinski, the original whistleblower and Gulf War veteran, made the following statement concerning the fraud: “In the Army, I was expected to protect people at all costs. At Pfizer, I was expected to increase profits at all costs, even when sales meant endangering lives. I couldn’t do that.”
- $100 Million paid by Hospital Corporation of America (2000)
- After providing evidence to the FBI that HCA had been routinely overcharging the government’s Medicare program, two whistleblowers split a $100 million reward. The actions of James F. Alderson and John Schilling allowed the government to raid dozens of HCA hospitals and offices in 1997. The evidence gathered would form the foundation for this historic lawsuit.
- $96 Million paid by GlaxoSmithKline (2012)
- Cheryl Eckard received her landmark reward after she exposed serious contamination issues at GSK’s pharmaceutical manufacturing plant in 2003. Following an eight-year court battle, Ms. Eckard felt overcome with emotion, “It’s difficult to survive this financially, emotionally, you lose all your friends, because all your friends are people you have at work. You really do have to understand that it’s a very difficult process but very well worth it.”
- $84 Million paid by Abbott Laboratories (2012)
- Four whistleblowers share the reward as a part of Abbott’s $1.6 billion settlement. The whistleblowers, whose identities were never revealed, provided the government with evidence of the company’s improper marketing of an anti-seizure drug called Depakote.
- $52 Million paid by SmithKline Beecham Clinical Laboratories (1993)
- Before they merged with Glaxo Wellcome, SmithKline had already made a habit out of defrauding federal healthcare programs. Robert Merena reported their malicious practices to the U.S. Justice Department and collected his reward after the successful lawsuit.
- $34 Million paid by GlaxoSmithKline (1999)
- The pharmaceutical giant paid yet another massive settlement after George Courto revealed that GSK failed to report cheap sales of relabeled drugs to an HMO. In doing so, the company had hoped to avoid owing millions in rebates to Medicaid. $34 million of the $333 million settlement went to the estate of Mr. Courto.
- $25 Million paid by Bank of America (2012)
- Five whistleblowers aided with the government’s investigation of alleged appraisal fraud on behalf of BoA subsidiary Countrywide Financial. Kyle Lagow, who was awarded $14.5 million for his role in initiating the investigation, spoke on the frustration he experienced throughout the process, “You have to sit there in silence, and you just get up every day and beat your head against the wall.”
- $ 22.5 Million paid by United Technologies Corp. (1989)
- Douglas D. Keeth, a former vice president at United Technologies, exposed fraudulent billing practices that led to the Defense Department paying for helicopters it never received. Keeth filed a complaint in Federal court after the company attempted to cover up the fraud.
- $19.4 Million paid by Lucas Industries (1993)
- Lucas Industries and its two U.S. subsidiaries settled a $88 million lawsuit with the government following allegations that the company knowingly shipped defective parts to the Pentagon. Frederick Copeland blew the whistle once he discovered falsified gear charts and major defects in some of the equipment being sold to the military. The former machinist received a $19.4 million reward.
- $9 Million paid by Damon Clinical Laboratories (1993)
- Jeanne Byrne exposed the fraud behind a bundle of tests that Damon Laboratories referred to as “LabScan”. The company had been grouping certain blood tests together which led to doctors ordering more than were necessary. After a three year legal fight, the government reached a $119 million settlement with Damon for defrauding Medicare and rewarded Ms. Byrne for her help.
The Necessity of Whistleblower Rewards
Some might argue that it is wrong to incentivize whistleblowing because it distracts from the immediate moral merits of the action. There is, however, another way of interpreting the significance of whistleblower rewards that applauds the government’s approach instead of being disillusioned by it.
The monetary reward should not be sneered at or thought of as the primary motivation for a person who decides to blow the whistle; rather, it ought to be praised as the key component in a difficult situation that makes taking action against observed wrongdoing possible.
Those who consider blowing the whistle face a tremendous amount of uncertainty. Should you remain loyal to your company or your conscience? Will others be harmed if you remain passive? If you do take action, how can you secure personal safety and financial stability for yourself and your loved ones?
These kinds of questions can cause waves of overwhelming doubt to flood the mind, leaving you in an isolated purgatory of indecision. In order for the anxiety to subside, there must be a promise for peace of mind; and while a sense of moral justification certainly comprises part of this promise, practical concerns like financial insecurity still need to be accounted for.
Rewards offered by the government help eliminate this burden of uncertainty and enable whistleblowers to pursue their noble intentions without fearing for their own futures.