Can You Be Paid For Blowing The Whistle On Your Employer's Illegal Activities?
You may already be aware of the legal protections available for "whistleblowers" -- individuals who inform applicable federal or state authorities about potentially illegal or unethical activities being committed by their employers. But could blowing the whistle on your employer's activity also result in a payday? Read on to learn more about some of the financial incentives available for whistleblowers, as well as attempts to broaden and increase these rewards.
What current financial awards are available to individuals who assist in the identification and prosecution of illegal corporate behavior?
The federal Internal Revenue Service (IRS) currently has one of the most generous whistleblower reward programs available. Under this program, if you report a failure by an individual or corporation to pay the federal income taxes owed, you could receive a portion of any taxes, penalties, or late fees collected by this person -- up to 30 percent of the total. When you hear about individuals facing tens of thousands of dollars in penalties following an audit, some of these funds are often used to compensate those who provided information to trigger the audit in the first place.
The Securities and Exchange Commission (SEC) is also able to help compensate whistleblowers for reporting investment and other financial fraud. Before the Dodd-Frank banking reform act in 2010, the SEC was only able to issue cash rewards in a small subsection of insider trading cases. However, now the SEC can reward any individual who points the SEC to financial fraud that results in the collection of $1 million or more in sanctions. As with the IRS, the SEC whistleblower will receive a portion of the total collected, up to 30 percent.
Are there additional financial incentives on the table?
The Attorney General of New York has recently proposed a new law that would broaden these financial incentives even further, by allowing individuals to recover a portion of the amount levied on those who have committed insurance, banking, or other financial fraud. If enacted, this law could provide protections and rewards for employees who uncover financial fraud in nearly any industry or sector.
If you've witnessed your employer committing a crime or fraudulent activity and wish to report it to the proper authorities, first consult with a financial or employment attorney, such as Philip L. Burnett, Attorney At Law. This attorney can help you evaluate the best way to proceed, as well as help you place a monetary value on your potential claim.