International Fraud and Whistleblowers
With a fraction of the staff necessary to enforce all of its rules and regulations, the U.S. government relies on whistleblowers to help stop fraud.
Global economies and trade alliances have made the world more connected. The various laws and trade agreements between nations often change which opens the door for opportunistic fraudsters to take advantage. Changing laws also make it possible for honest mistakes to become willing deception as time goes by.
With a tiny fraction of the staff necessary to enforce all of the rules and regulations regarding its laws, the U.S. government relies on whistleblowers to help call out and stop fraud. When you consider the complexities of global markets, the absence of personnel in foreign countries, and language barriers, it’s no wonder international fraud whistleblowers are so important.
What is international fraud, and how do I spot it?
International fraud is any fraudulent activity that takes place across national borders. From the U.S. perspective, it means any fraud perpetrated against the U.S. government from outside the United States.
As the global currency standard, the U.S. dollar is everywhere. With it comes the presence of the U.S. government. We have many laws on the books that have worldwide reach in banking, trade, manufacturing, and almost anything that involves investment from the U.S.
It would be impossible to list all of the specific frauds and scams in use. In general, it boils down to fraudulently taking money from the U.S. government or paying less to the U.S. government than it is owed.
Can non-U.S. citizens be whistleblowers?
Non-U.S. citizens can become whistleblowers for our government and share in the potential recovery the same way citizens can. Five primary laws enable foreign whistleblowers to call out international fraud against the U.S. government.
- False Claims Act
- Foreign Corrupt Practices Act
- Commodity Exchange Act
- Securities Exchange Act
- Internal Revenue Code
You do not need to know which law applies to the fraud you observe. Leave that to your whistleblower lawyer. Call us if you suspect a person, business, or even government official is taking money from the U.S. government, failing to send money that the U.S. government is due (a reverse false claim), or engaging in suspicious activity.
What kind of rewards can a foreign whistleblower earn?
The U.S. laws mentioned above specifically authorize a possible reward to whistleblowers for doing the right thing. While a potential whistleblower award depends greatly on the quality of the information and details of the case, the award can be up to 30% of the government’s recovery. In some cases, this can mean life-changing sums!
International securities fraud and whistleblower opportunities
“Securities” is a perhaps overly broad term used to indicate almost any kind of investment, usually related to banking in some way. Officially, a security is any publicly-traded financial instrument or asset. There are three general types: equity, debt, and derivatives (see below). From mortgages to precious metals, you name it – if they’re traded in the United States, we generally consider them securities.
How the U.S. defines securities is crucial to whistleblowers because it is U.S. law that you will be using. An international securities whistleblower is likely to be somewhere in the banking industry and likely understands securities regulations in their own country. Recognizing that they may be regulated differently in the U.S. is crucial to possibly becoming a whistleblower.
In April 2020, the U.S. Securities and Exchange Commission (SEC) awarded an international whistleblower $27 million for providing leads to its investigative team that both advanced its investigation and saved significant commission resources in the process.1,3
Whistleblowers and international contract and procurement fraud
As a global power, the U.S. government engages with contractors worldwide to do various things. When the U.S. government enters into a contract, violations of that contract could rise to a False Claims Act violation. These cases can be tough for the government to spot without help. Our government relies on foreign contractors and workers to fulfill their duties without a great deal of oversight in many cases.
Contract fraud is just what it sounds like. The service or product that was promised and paid for was not delivered. In December 2019, a contractor paid $45 million to resolve False Claims allegations relating to the illegal transportation of goods across Iran in connection with a contract to provide material and logistical support to U.S. troops in Afghanistan.3
Procurement fraud involves any activity that seeks to gain something from the U.S. government. Bid-rigging and collusion are common examples. In March 2019, an international organization agreed to pay $6.9 million to settle allegations under the False Claims Act related to United States Agency for International Development (“USAID”)-funded programming for beneficiaries affected by the conflict in Syria.4
Whistleblowers can stop bribery and corruption abroad
The Foreign Corrupt Practices Act (FCPA) gives international whistleblowers great power. In many countries, bribery may be seen as “the cost of doing business” or simply how things are done. U.S. law, however, forbids this practice and other forms of corruption in dealings with the U.S. government.
These cases can be difficult to understand without the inside perspective and grasp of the culture and language that a local citizen would have. Some corrupt officials and businesses may operate with impunity abroad, using bribes to ensure contracts or make them more lucrative while lining their pockets with American taxpayers’ money.
In June of 2021, a whistleblower was awarded $28 million in a settlement for providing information about FCPA violations from a U.S.-based aircraft electronics manufacturer.1,3
How to report international fraud
While it may seem like a good idea, there may be many pitfalls to internal reporting. In general, contacting an attorney first may be the safest bet. Discussing your information with us costs you nothing.
Plus, a whistleblower attorney will know the law, what evidence to gather, and how to present your case to the proper authority. In addition, we can help you seek any available protection from retaliation under U.S. law and the laws of whatever country you may be in, and we can try to help you maximize any available reward.
While many countries have laws that encourage and reward whistleblowers, the U.S. has perhaps the most lucrative whistleblower laws of all. The U.S. also has more robust whistleblower protection laws than many countries.
Talk to a whistleblower attorney confidentially and without obligation
We’ve represented dozens of whistleblowers, with tens of millions of dollars in total settlements since 2016.1,4 Companies that have global reach have paid millions in penalties.
Call us at 1-888-292-8852 or use our secure chat or online contact form if you’re outside the United States. We treat our clients’ cases with the strictest confidentiality. Though your identity may eventually be revealed, we can fight for your privacy as long as possible.
“Bill has the ability to ‘think outside the box’…which makes him extremely effective as an advocate for his clients.” 1 — Attorney who previously worked with Bill
Awards we’ve won
For standards of inclusion for awards listed, visit bestlawyers.com, thenationaltriallawyers.org, superlawyers.com, farrin.com/business-nc-power-list, and millondollaradvocates.com. National Trial Lawyers Top 100 designation is for 2022. Regarding the Million Dollar Advocates Forum, we do not represent that similar results will be achieved in your case. Each case is different and must be evaluated separately. Firm award is for the Law Offices of James Scott Farrin. Attorney awards are for attorneys with the Law Offices of James Scott Farrin.
Contact the Carolina
Whistleblower Attorneys
If you’re wondering if it’s a good idea to speak with a whistleblower lawyer about what you know, let us set the record straight.
- Corporate ethics hotlines can be risky and may lead to termination. If you’ve already done this, call us immediately.
- Your coworkers could be aware of the fraud – or complicit in it – and you should not talk to them about it.
- The first claim to be filed under the False Claims Act can proceed – if you’re not first, you’re at a serious disadvantage and may get nothing (another reason not to speak to your coworkers about it).
- A confidential discussion costs you a few minutes, but could save you time, stress, and money.
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