Non-American Citizens As Whistleblowers
SEC Receives Large Number Of Foreign Tips
Substantial Monetary Rewards
The federal government has four primary whistleblower statutes and reward programs:
- The Federal False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq.
- The Securities and Exchange Commission (“SEC”) Whistleblower Program, Section 922 of the Dodd-Frank Act, 12 U.S.C. § 5301 et seq.
- The Internal Revenue Service (“IRS”) Whistleblower Program, I.R.C. § 7623 et seq.
- The Commodity Futures Trading Commission (“CFTC”) Whistleblower Program, 7 U.S.C. § 26 et seq.
All of these whistleblower programs permit non-American citizens to file a complaint in a court of law (in the case of the FCA) or submit an agency tip (in the case of the SEC, CFTC, and IRS whistleblower programs). Non-citizens, whether they reside in the U.S. or abroad, are generally treated on equal footing with U.S. citizens under the whistleblower statutes and reward programs. Eligible whistleblowers can seek, and have received, sizeable rewards under these whistleblower programs regardless of their citizenship.
Importance of Foreign Whistleblowers
Foreign citizens are an integral part of the whistleblower system according to federal agency data. In particular, foreign citizens compromise a substantial number of SEC whistleblowers. In fiscal year 2021 alone, the SEC received over 1,300 tips from individuals in 99 foreign countries. The critical importance of foreign whistleblowers to SEC enforcement should come as no surprise. Many foreign companies list shares on American stock exchanges, thousands of American companies have sizeable operations abroad, and market participants the world over invest trillions of dollars in American securities.
Just as importantly, the SEC shares jurisdiction over enforcement of the Foreign Corrupt Practices Act (“FCPA”) with the Department of Justice (“DOJ”). The FCPA bars a wide array of actors from bribing foreign officials and imposes certain related accounting obligations on covered companies.
There is no question that the SEC and DOJ rigorously enforce the FCPA. Both the SEC and DOJ have special units dedicated to FCPA enforcement. Given the broad reach of the FCPA and the substantial civil and criminal penalties associated with FCPA violations, annual FCPA recoveries are often in the billions of dollars. Foreign citizens frequently possess particularly valuable knowledge of FCPA violations as such wrongdoing tends to occur on their home soil.
Foreign Citizens As Tax Fraud Whistleblowers
When it comes to U.S. tax fraud, non-citizens may have key information regarding tax law violations under the IRS whistleblower law (e.g., abusive tax shelters), violations in the commodities and derivatives marketed policed by the CFTC (e.g., manipulation in the oil futures market), and healthcare and government contractor fraud (e.g., Medicare fraud) covered by the FCA.
The United States’ key whistleblowers programs provide substantial monetary rewards for eligible whistleblowers as well as various protections for those that blow the whistle. In passing these laws, Congress no doubt realized that foreign citizens can provide critically important information to regulators.
Ingrid M. Evans represents individuals in Los Angeles and throughout California with credible, original information of any kind of tax fraud, including offshore tax avoidance measures, and use of foreign corporations and accounts to avoid taxation or the like. Ingrid can be reached at (415) 441-8669, or by email at <a href=”mailto:firstname.lastname@example.org”>email@example.com</a>. Our toll-free number is 1-888-50EVANS (888-503-8267). Ingrid can also represent individuals who have been retaliated against for blowing the whistle on tax fraud.