Whistleblower Reward Calculator

How a qui tam lawsuit works

A private person can sue on the government's behalf: “A person may bring a civil action for a violation of section 3729 for the person and for the United States Government. The action shall be brought in the name of the Government.” (31 U.S.C. § 3730(b)(1))

The case starts in secret: “The complaint shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders.” (31 U.S.C. § 3730(b)(2)) And the government decides whether to take it over: “The Government may elect to intervene and proceed with the action within 60 days after it receives both the complaint and the material evidence and information.” (31 U.S.C. § 3730(b)(2))

So the person who files, called the relator, files under seal, serves the complaint and the evidence on the government, and waits while it investigates. Whether the government joins changes the share the statute sets.

The whistleblower reward in a qui tam lawsuit

When the government joins: “If the Government proceeds with an action brought by a person under subsection (b), such person shall, subject to the second sentence of this paragraph, receive at least 15 percent but not more than 25 percent of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to the prosecution of the action.” (31 U.S.C. § 3730(d)(1))

When it does not: “If the Government does not proceed with an action under this section, the person bringing the action or settling the claim shall receive an amount which the court decides is reasonable for collecting the civil penalty and damages. The amount shall be not less than 25 percent and not more than 30 percent of the proceeds of the action or settlement and shall be paid out of such proceeds.” (31 U.S.C. § 3730(d)(2))

The share is lower for a case built on public information. “Where the action is one which the court finds to be based primarily on disclosures of specific information (other than information provided by the person bringing the action) relating to allegations or transactions in a criminal, civil, or administrative hearing,” (31 U.S.C. § 3730(d)(1)) or in the other public sources the paragraph lists, “the court may award such sums as it considers appropriate, but in no case more than 10 percent of the proceeds, taking into account the significance of the information and the role of the person bringing the action in advancing the case to litigation.” (31 U.S.C. § 3730(d)(1))

And on top of the share: “Any payment to a person under the first or second sentence of this paragraph shall be made from the proceeds. Any such person shall also receive an amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorneys' fees and costs.” (31 U.S.C. § 3730(d)(1))

When the share is reduced or lost

For a person who took part in the fraud, the court may cut the share: “if the court finds that the action was brought by a person who planned and initiated the violation of section 3729 upon which the action was brought, then the court may, to the extent the court considers appropriate, reduce the share of the proceeds of the action which the person would otherwise receive under paragraph (1) or (2) of this subsection, taking into account the role of that person in advancing the case to litigation and any relevant circumstances pertaining to the violation.” (31 U.S.C. § 3730(d)(3))

And a conviction ends it: “If the person bringing the action is convicted of criminal conduct arising from his or her role in the violation of section 3729, that person shall be dismissed from the civil action and shall not receive any share of the proceeds of the action.” (31 U.S.C. § 3730(d)(3))

The SEC whistleblower award

The Securities Exchange Act directs that “the Commission, under regulations prescribed by the Commission and subject to subsection (c), shall pay an award or awards to 1 or more whistleblowers who voluntarily provided original information to the Commission that led to the successful enforcement of the covered judicial or administrative action, or related action, in an aggregate amount equal to” (15 U.S.C. § 78u-6(b)(1)) “(A) not less than 10 percent, in total, of what has been collected of the monetary sanctions imposed in the action or related actions; and (B) not more than 30 percent, in total, of what has been collected of the monetary sanctions imposed in the action or related actions.” (15 U.S.C. § 78u-6(b)(1))

Only larger actions count. A covered action “means any judicial or administrative action brought by the Commission under the securities laws that results in monetary sanctions exceeding $1,000,000.” (15 U.S.C. § 78u-6(a)(1))

Where in the range is the Commission's call: “The determination of the amount of an award made under subsection (b) shall be in the discretion of the Commission.” (15 U.S.C. § 78u-6(c)(1)(A))

A lawyer is allowed, and for an anonymous claim required: “Any whistleblower who makes a claim for an award under subsection (b) may be represented by counsel.” (15 U.S.C. § 78u-6(d)(1)) “Any whistleblower who anonymously makes a claim for an award under subsection (b) shall be represented by counsel if the whistleblower anonymously submits the information upon which the claim is based.” (15 U.S.C. § 78u-6(d)(2)(A))

The IRS whistleblower reward

The Internal Revenue Code sets the award: “If the Secretary proceeds with any administrative or judicial action described in subsection (a) based on information brought to the Secretary's attention by an individual, such individual shall, subject to paragraph (2), receive as an award at least 15 percent but not more than 30 percent of the proceeds collected as a result of the action (including any related actions) or from any settlement in response to such action (determined without regard to whether such proceeds are available to the Secretary).” (26 U.S.C. § 7623(b)(1)) “The determination of the amount of such award by the Whistleblower Office shall depend upon the extent to which the individual substantially contributed to such action.” (26 U.S.C. § 7623(b)(1))

It is lower where the action rests on public disclosures: “the Whistleblower Office may award such sums as it considers appropriate, but in no case more than 10 percent of the proceeds collected as a result of the action (including any related actions) or from any settlement in response to such action (determined without regard to whether such proceeds are available to the Secretary), taking into account the significance of the individual's information and the role of such individual and any legal representative of such individual in contributing to such action.” (26 U.S.C. § 7623(b)(2)(A))

And it applies only to larger cases: the subsection applies to any action “(A) against any taxpayer, but in the case of any individual, only if such individual's gross income exceeds $200,000 for any taxable year subject to such action, and (B) if the proceeds in dispute exceed $2,000,000.” (26 U.S.C. § 7623(b)(5))

No contract is needed: “No contract with the Internal Revenue Service is necessary for any individual to receive an award under this subsection.” (26 U.S.C. § 7623(b)(6)(A)) And a decision can be appealed: “Any determination regarding an award under paragraph (1), (2), or (3) may, within 30 days of such determination, be appealed to the Tax Court (and the Tax Court shall have jurisdiction with respect to such matter).” (26 U.S.C. § 7623(b)(4))

A whistleblower reward example

Say the government collects $4,000,000.00. In a qui tam lawsuit the government joined, the statute's range is $600,000.00 to $1,000,000.00, or no more than $400,000.00 if the case rests on public disclosures. If the government did not join and the relator won, the range is $1,000,000.00 to $1,200,000.00.

If the same amount were monetary sanctions collected by the SEC in a covered action, the range is $400,000.00 to $1,200,000.00. If it were proceeds collected by the IRS in a case the subsection covers, $600,000.00 to $1,200,000.00.

Those are the statutes' floors and ceilings. Where an award falls inside them is decided by the court, the Commission or the Whistleblower Office.

Protection from retaliation

The False Claims Act makes a retaliated employee whole: “Relief under paragraph (1) shall include reinstatement with the same seniority status that employee, contractor, or agent would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys' fees.” (31 U.S.C. § 3730(h)(2)) And sets a deadline: “A civil action under this subsection may not be brought more than 3 years after the date when the retaliation occurred.” (31 U.S.C. § 3730(h)(3))

The securities law has its own rule: “No employer may discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against, a whistleblower in the terms and conditions of employment because of any lawful act done by the whistleblower” (15 U.S.C. § 78u-6(h)(1)(A)), in the acts the subsection lists.

Deadlines for a qui tam lawsuit

A False Claims Act action may not be brought “(1) more than 6 years after the date on which the violation of section 3729 is committed, or (2) more than 3 years after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed, whichever occurs last.” (31 U.S.C. § 3731(b))

So the outside limit is counted from the violation itself. A lawyer can say which of those dates governs a given case, and the earlier the information reaches a lawyer the more of the period is left.

Talking to a whistleblower lawyer

This site is not a law firm, does not refer anyone to a lawyer, and cannot say what an award would be. A whistleblower lawyer is the person to ask whether information is original, which program fits it, how to file under seal or anonymously, and how to protect a job while doing it.

Bring what you know and how you know it, the dates, any documents you lawfully hold, and the program you think applies. Do not take records you are not allowed to have; ask a lawyer first.