The Brief: Connections to fraudulent conduct do not automatically disqualify individuals from becoming whistleblowers. In fact, in certain cases, these whistleblowers can even qualify for awards. This should give potential whistleblowers hope and reason to tell the truth.
Your Next Move: If you’re working with legal representation, be sure your legal team knows the whole story.
There’s a common misconception that a whistleblower must have no connections to the conduct they seek to report. This common misconception often discourages witnesses from coming forward or incentives them to omit or to minimize their role or participation in a fraud. Yet whistleblowers are quite frequently connected to the conduct they seek to report.
The good news is that whistleblowers have, in fact, been both implicated in the fraud they’ve brought forward and not compromised the investigation because of their involvement. In fact, these same whistleblowers may also receive awards for stepping forward!
An example of the government’s approach to whistleblowers with some liability can be found in the IRS’s Whistleblower Program.The federal tax code specifies the kinds of awards whistleblowers can receive, and it accounts for those who might be liable: “If the Whistleblower Office determines that the claim for an award under paragraph (1) or (2) is brought by an individual who planned and initiated the actions that led to the underpayment of tax or actions described in subsection (a)(2), then the Whistleblower Office may appropriately reduce such award. If such individual is convicted of criminal conduct arising from the role described in the preceding sentence, the Whistleblower Office shall deny any award.” (26 U.S.C. 7623, emphasis added). In other words, the U.S. Code states explicitly that even those who have some level of involvement in a tax fraud can also be awarded for bringing that fraud to the attention of the proper authorities.
Yet, not all those with liability will be eligible for a whistleblower award. Individuals are well served by discussing these issues with counsel before stepping out as a whistleblower.
Managing Liability
If there is a chance to be an implicated participant as well as a whistleblower at the same time, then one must strategize and address issues of liability early on, with a view to strengthening the case and even to earning an award.
Whistleblowers should walk their legal representation through the whole story. Through these discussions, whistleblowers may find that their connections to the fraud and reported conduct could be used to their advantage: a whistleblower’s direct and personal knowledge of key details could well be the key to building a strong case.
Telling the whole story includes gathering key supporting documents that back up the fraud and reported conduct. It might feel strange to you to gather evidence of personal actions that you’d rather not talk about, but remember: telling the whole truth, and working with counsel to corroborate the truth, ultimately benefits the whistleblower.
So be assured that liability is no reason to lose hope. You have support no matter what your past actions might look like. In fact, knowledge of past conduct might help build a government investigation that ultimately leads to a world that’s a little more just, and potentially also mitigates some of your own liability.