7 Richest Snitches: Time to Rat Out Your Boss?

Blowing Whistle Brings Big Payday

ByABC News
September 17, 2012, 2:49 PM

Sept. 17, 2012 -- Ever dream of getting rich by blowing the whistle on your boss? People have—most recently Bradley Birkenfeld, the ex-banker whom the IRS paid a record $104 million for ratting out his former banking bosses who had helped U.S. clients to hide money in Swiss accounts.

Have any other blowers cashed in big?

Yes, says Stephen M. Kohn, author of "The Whistleblower's Handbook," a how-to guide. The book describes the government's major whistleblower programs and lists the many kinds of fraud that qualify for rewards—everything from "altering expert certificates to avoid paying a fee" to the "sale of adulterated drugs."

Kohn, who runs the National Whistleblowers Center, says another big reward was the $96 million paid in July to Cheryl Eckard, a former employee of drug maker Glaxo Smith Kline, who fingered faults in manufacturing at one of Glaxo's plants. For other big rewards, see the list below

"Super-duper rewards," as Kohn calls Birkenfeld's and Eckard's, act like advertisements for the U.S. government's whistleblower programs, which make hundreds of rewards every year: They include the Department of Justice's whistleblower program, under the False Claims Act; and three other reward programs run respectively by the IRS, the SEC, and the Commodity Futures Trading Commission.

Patrick Burns, director of communications for pro-whistleblower group Taxpayers Against Fraud, cautions that big rewards to single individuals are rare.

"They're about as common as whales," he says. "You don't see them very often." In most rewards, he says, more than one blower is involved. "You're looking at six or seven blowers, so the money gets parsed out." Of the roughly 100 rewards a year given out under the False Claims Act, says, 50 will be for "$2 million or less." The amount of the reward varies case to case by is usually around 16 percent of the fines levied, according to Burns.

Let's say you win one of those awards, and that after divvying up the pot with your fellow blowers, you get $320,000. That's still a respectable amount of money. But half of that, Burns says, typically will go to pay your taxes and your attorney bills.

Of the many differences between the four whistleblower programs, the most significant, say Burns and Kohn, are these:

The CFTC program offers the most protection for a whistleblower who wants to remain anonymous. "You can pursue your claim and remain anonymous, even to the government," says Kohn. Your identity will disclosed only after you've qualified for a reward.

All the other programs, he says, require that you tell the feds up front who you are. "And because the government knows who you are," he says, "there's always a chance your company will find out."

Another big distinction: Under the IRS, SEC and CFTC programs, the government decides if they want to pursue your claim. If they decide not, then your attempt to get a reward ends. You have no legal authority to pursue a claim on your own.

Under that False Claims Act, however, even if the Justice Department turns you down, you can continue to pursue your claim in court as a private individual acting on behalf of the government. "The Act empowers the average worker with the same authority as if they were the government of the United States. On paper, it's the most powerful program of the four," says Kohn.