For individuals outside the United States who possess knowledge of significant corporate or financial wrongdoing, a powerful and unique set of U.S. laws offers robust protections, substantial financial rewards, and, crucially, the ability to report confidentially or entirely anonymously. These programs are designed to combat fraud, corruption, and other forms of misconduct that impact the U.S. financial markets, government funds, or international commerce. This guide provides an overview of the key U.S. whistleblower laws available to you as an international whistleblower.
Key Protections and Provisions for International Whistleblowers
Several landmark U.S. statutes have transnational reach, meaning they apply to misconduct that occurs outside of the United States. These laws not only create a channel for reporting but also incentivize it through monetary awards and safeguard whistleblowers from retaliation.
The Dodd-Frank Act: A Gateway for Reporting Securities, Commodities, and Bribery Violations
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 established two of the most effective whistleblower programs for international individuals: the Securities and Exchange Commission (SEC) Whistleblower Program and the Commodity Futures Trading Commission (CFTC) Whistleblower Program.
Misconduct Covered:
- Securities Fraud: Insider trading, accounting fraud, market manipulation, and false or misleading statements by publicly traded companies.
- Commodities Fraud: Manipulation of commodities and derivatives markets, and fraudulent investment schemes.
- Foreign Bribery: Violations of the Foreign Corrupt Practices Act (FCPA), where companies with a U.S. connection bribe foreign officials to obtain or retain business.
Protections and Awards:
- Financial Rewards: If your original information leads to a successful enforcement action resulting in over $1 million in sanctions, you may be eligible for an award of 10% to 30% of the money collected.
- Anti-Retaliation Protections: The Dodd-Frank Act prohibits employers from retaliating against whistleblowers. While the direct application of these employment protections can be complex for individuals working outside the U.S. for foreign companies, the confidentiality and anonymity provisions offer significant safeguards.
Confidentiality and Anonymity:
- Anonymity: You can submit a tip to the SEC or CFTC anonymously if you are represented by a U.S.-licensed attorney. Your identity will not be revealed to the company or the public, and you will only need to disclose it to the respective agency to receive an award.
- Confidentiality: The SEC and CFTC are legally obligated to protect the identity of whistleblowers to the fullest extent possible. All information that could reasonably be expected to reveal your identity is treated as confidential.
The Anti-Money Laundering (AML) Act and the Bank Secrecy Act: Targeting Illicit Financial Flows
Recent enhancements to U.S. anti-money laundering laws have created a powerful new whistleblower program administered by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
Misconduct Covered:
- Money Laundering: Concealing the origins of illegally obtained money.
- Bank Secrecy Act (BSA) Violations: Failure by financial institutions to implement effective anti-money laundering programs, file suspicious activity reports, or comply with other reporting requirements.
- Sanctions Violations: Doing business with sanctioned individuals, entities, or countries in violation of U.S. law.
Protections and Awards:
- Financial Rewards: Whistleblowers who provide original information leading to successful enforcement actions with over $1 million in sanctions can receive an award of up to 30% of the amount collected.
- Anti-Retaliation Protections: The AML Act includes provisions to protect whistleblowers from employer retaliation.
Confidentiality and Anonymity:
- Anonymity: Similar to the SEC and CFTC programs, the AML whistleblower program allows for anonymous submissions through an attorney.
- Confidentiality: The program is designed to protect the confidentiality of whistleblowers throughout the investigation.
The False Claims Act (FCA): Combating Fraud Against the U.S. Government
Also known as the “Lincoln Law,” the False Claims Act allows private individuals to file lawsuits on behalf of the U.S. government when they have knowledge of fraud involving federal funds or programs. These lawsuits are known as qui tam actions.
Misconduct Covered:
- Contractor Fraud: Overbilling for goods or services on U.S. government contracts.
- Healthcare Fraud: False claims submitted to U.S. healthcare programs like Medicare or Medicaid.
- Financial Fraud: Misuse of U.S. government funds or fraudulent claims related to government-backed loans or grants.
Protections and Awards:
- Financial Rewards: Successful qui tam lawsuits entitle the whistleblower (known as a “relator”) to receive between 15% and 30% of the government’s recovery.
- Anti-Retaliation Protections: The FCA provides protection against termination, demotion, harassment, or other forms of discrimination by an employer in retaliation for reporting fraud.
Confidentiality and Anonymity:
- Confidentiality during Investigation: When a qui tam lawsuit is filed, it is initially placed “under seal,” meaning it is kept secret from the public and the defendant. This allows the U.S. Department of Justice to investigate the allegations confidentially. While the case may eventually be unsealed, your attorney can advocate to maintain confidentiality.
- No Full Anonymity: Unlike the SEC and CFTC programs, the False Claims Act does not permit fully anonymous filings. However, the initial sealed period provides a critical window of confidentiality.
The IRS Whistleblower Program: Uncovering Major Tax Fraud
The Internal Revenue Service (IRS) offers substantial awards to individuals who provide specific and credible information about significant tax evasion and fraud.
Misconduct Covered:
- Tax Underpayment: Failure by corporations or high-income individuals to pay their U.S. tax obligations.
- Offshore Tax Evasion: Using foreign bank accounts or entities to hide assets and income from the IRS.
- Money Laundering: The IRS Criminal Investigation division often investigates financial crimes, including money laundering, in conjunction with tax fraud.
Protections and Awards:
- Financial Rewards: For cases where the amount in dispute (including taxes, penalties, and interest) exceeds $2 million, the IRS will award the whistleblower 15% to 30% of the amount collected.
- Confidentiality: The IRS is legally bound to protect the identity of whistleblowers.
Confidentiality and Anonymity:
- No Anonymous Filing: The IRS program does not permit anonymous filings. However, the IRS is committed to maintaining the confidentiality of the whistleblower’s identity to the maximum extent permitted by law. Your attorney can help manage communications to protect your identity.
Conclusion for International Whistleblowers
The United States offers a uniquely powerful legal framework for international whistleblowers to report wrongdoing safely and to be rewarded for their courage. The ability to report anonymously through legal counsel under the SEC, CFTC, and AML programs is a critical protection that mitigates the risk of retaliation.
If you have information about any of the forms of misconduct described above, it is highly recommended that you consult with a U.S. attorney experienced in whistleblower law to understand your rights and the best course of action.
