Average Whistleblower Settlement
How Much is the Average Whistleblower Settlement? We Take a Look at Some of the Numbers
Whistleblowers play a key role in the federal government’s fight against fraud. From securities fraud and tax fraud to fraud under federal contracts and healthcare benefit programs, all forms of fraud harm the American public—and, as a result, they are all high on the federal government’s list of top law enforcement priorities.
Since the federal government cannot uncover all instances of fraud on its own, it relies on whistleblowers for assistance. To encourage whistleblowing, the federal government provides protections to individuals who come forward. These include both confidentiality and protection against retaliation when companies uncover whistleblowers’ identities.
The federal government also provides financial compensation to whistleblowers in many cases.
Many of the federal whistleblower statutes include compensation provisions. Under these provisions, whistleblowers are entitled to a percentage of the government’s financial recovery when the information they provide leads to a successful enforcement action. Since whistleblower compensation awards are percentage-based, they vary widely—though they will be substantial in many cases.
Average Whistleblower Settlement Data from the U.S. Department of Justice (DOJ)
The U.S. Department of Justice (DOJ) reports whistleblower compensation data in cases filed under the False Claims Act (FCA). The FCA is a federal statute that prohibits “false and fraudulent claims” affecting government contracts and programs. It is one of the government’s most potent weapons for fighting fraud, and it serves as the basis for a significant percentage of all whistleblower complaints filed with the federal government.
Under the FCA, whistleblowers are typically entitled to between 15% and 30% of the amount the government recovers based on the information they provide. For 2022, the DOJ reported $2.2 billion in FCA judgments and settlements, of which $1.9 billion resulted from whistleblower complaints. With a reported 652 whistleblower complaints responsible for the government’s $1.9 billion in qui tam recoveries, the DOJ reports that whistleblowers received a total of $488 million in compensation. This puts the average whistleblower settlement under the FCA at $748,466 for 2022.
Average Whistleblower Settlement Data from the U.S. Securities and Exchange Commission (SEC)
The U.S. Securities and Exchange Commission (SEC) reports whistleblower compensation data in cases filed under the federal statutes that protect investors from market manipulation and other forms of securities fraud. For fiscal year (FY) 2022, the SEC reported a total of $229 million paid to 103 whistleblowers, “making FY 2022 the Commission’s second highest year in terms of dollar amounts and number of awards.” This brings the average whistleblower settlement in SEC cases for 2022 to more than $2.2 million.
Since the beginning of the SEC’s whistleblower program, the Commission has paid more than $1.3 billion to 328 whistleblowers. This puts the overall SEC whistleblower settlement average at $3.96 million—significantly above the 2022 average.
Notably, the SEC issued its largest-ever whistleblower award in 2023. On May 5, 2023, the Commission announced an award of $279 million paid to a whistleblower who provided “sustained assistance including multiple interviews and written submissions was critical to the success” of the SEC’s enforcement case. This more than doubled the previous record award of $114 million paid to a whistleblower in 2020.
The SEC’s announcement quoted Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, as stating: “The size of today’s award – the highest in our program’s history – not only incentivizes whistleblowers to come forward with accurate information about potential securities law violations, but also reflects the tremendous success of our whistleblower program. . . . As this award shows, there is a significant incentive for whistleblowers to come forward with accurate information about potential securities law violations.” The announcement also includes a link to a list of the SEC’s 10 largest whistleblower awards, most of which have been paid in the past five years:
- $279 million paid on May 5, 2023
- $114 million paid on October 22, 2020
- $110 million paid on September 15, 2021
- $50 million paid on April 15, 2021
- $50 million paid on March 19, 2018
- $50 million paid on June 4, 2020
- $39 million paid on September 6, 2018
- $37 million paid on December 19, 2022
- $37 million paid on March 26, 2019
- $36 million paid on September 24, 2021
While these figures skew the SEC’s average whistleblower settlement data pretty significantly, even taking these awards out of the picture, the average settlement amount is still high. As a result, anyone who believes they may have information about securities fraud has a strong incentive to speak with an experienced whistleblower lawyer promptly.
Average Whistleblower Settlement Data from the Internal Revenue Service (IRS)
The Internal Revenue Service (IRS) is another federal agency that reports its whistleblower award data on an annual basis. In FY 2022, the IRS reported 132 whistleblower compensation awards totaling $37.8 million, which resulted from $172.7 million in recoveries. This means that the IRS’s average whistleblower award for the year was just over $286,000.
This represents a notable increase from the prior year. As the IRS explains, while “[t]he total dollar amount of awards paid increased from FY 2021 when $36.1 million in awards were paid[, t]he total number of awards paid in FY 2022 . . . decreased from 179 in FY 2021 to 132 in FY 2022.” Overall, however, the number of IRS whistleblower awards and the average amounts of these awards have been on the decline since 2018.
How Much Can You Receive as a Federal Whistleblower?
If you believe that you may have information about securities fraud, tax fraud, or any other type of corporate fraud, how much can you receive if you blow the whistle? Ultimately, the answer to this question will depend on three key factors:
- Do you qualify as a whistleblower? First and foremost, to receive a whistleblower award, you must qualify as a whistleblower. Not everyone who submits information to the government qualifies, and the steps you need to take will depend on the type of fraud (or other wrongdoing) you need to report, the agency or office you need to contact, and potentially other factors as well. A whistleblower attorney at Oberheiden P.C. can determine if you qualify as a whistleblower—and, if you do, your attorney can help you take all of the steps necessary to secure a whistleblower award.
- Will the government intervene and take legal action? Under the FCA and other statutes, the percentage that a whistleblower is entitled to receive depends, in part, on whether the government intervenes and takes legal action—or the whistleblower must take legal action independently. Larger percentages are available in cases in which whistleblowers take legal action without the government’s assistance.
- How much will the government recover? Since whistleblower awards are percentage-based, the amount of compensation you can receive as a whistleblower also depends on how much the government is able to recover. This is true whether the government negotiates a settlement, pursues a successful enforcement action, or declines to intervene and you work with an attorney to pursue legal action independently.
Of course, regardless of any amount you may be entitled to recover, serving as a whistleblower is an important role in our society. Each year, whistleblowers help the government uncover billions of dollars in fraudulent corporate activity as well as other civil and criminal wrongs both in the private sector and within the federal government. If you believe you may be able to come forward as a whistleblower, we encourage you to speak with one of our attorneys so that you can make informed decisions about your next steps.
FAQs: Whistleblower Compensation Awards in Federal Cases
How can I figure out how much I will receive as a federal whistleblower?
Due to the nature of federal whistleblower compensation, the only way to find out how much you can receive as a whistleblower is to move forward with filing a complaint. While our lawyers will be able to provide a rough estimation, the government’s decision on intervention and how much the government ultimately recovers are the two main factors that will determine the size of your whistleblower award (if any).
Will I receive the average whistleblower settlement amount?
While some whistleblowers receive roughly the average settlement amount, some receive far less—and some receive far more. If you decide to come forward, the circumstances surrounding your whistleblower complaint will ultimately determine how much (if any) you are entitled to recover.
Do I need a lawyer to obtain a whistleblower compensation award?
Due to the complexity of the federal whistleblower system, we strongly recommend that all potential whistleblowers seek experienced legal representation. Only a small fraction of purported whistleblowers receive compensation awards, and those who do not take the necessary steps to qualify as a whistleblower will not receive the protections that are available.
If I hire a lawyer, will my legal fees reduce the amount of my whistleblower compensation award?
When you hire a whistleblower lawyer, your legal fees (if any) will be calculated as a percentage of your compensation award if your complaint leads to a successful enforcement action. However, the reality is that most whistleblowers need experienced legal representation in order to put themselves in a position to receive any whistleblower compensation at all.
Schedule a Federal Whistleblower Consultation at Oberheiden P.C.
If you would like to know more about your potential eligibility for a whistleblower compensation award, we invite you to get in touch. Please call 888-680-1745 or contact us online to schedule a free and confidential consultation at Oberheiden P.C.