Whistleblowing Across the Water

Fraudsters in Europe are quick to suggest that while it’s OK to incentivize sales and profits, it would somehow be morally reprehensible to incentivize integrity. A “good chap” should be willing to commit career suicide without recompense, even as companies actively set up programs to lie about vehicle emissions and medical device safety, price-gouge, or pay doctors kickbacks in order to increase market share or promote medically unnecessary medicines and services.

Does the “good chap” argument work? A little too well. Politicians in Europe need campaign donations to get elected, newspapers and magazines need advertisers, and corporate managers want year-end bonuses. As American writer Upton Sinclair once observed, “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

The end result is that despite over 30 years of unalloyed success incentivizing integrity here in the U.S. under the federal False Claims Act, European countries have yet to offer cash awards to help fight fraud.

Undeterred, American lawyers, who have seen dozens of European firms operationalize massive frauds inside the United States, are now taking their anti-fraud fight to corporate home offices in Europe.  There they are actively seeking whistleblowers to illuminate chicanery going on here in the United States.

From The New York Times:

Unlike in Britain and the Continent, whistle-blower cases can net big money in the United States — both for the government and the individuals who expose wrongdoing.

In fiscal year 2016, the Justice Department recovered more than $4.7 billion — the third-highest amount recovered in a single year — for civil fraud and false claims cases. Whistle-blowers propel the majority of false claims cases.

The ability of British citizens to avail themselves of American whistle-blower laws “is a great example of how the global economy opens up opportunities for whistle-blowers from around the world to point out fraud against the U.S. government,” said Mary Inman, who arrived in London in July to start Constantine Cannon’s whistle-blower practice in Europe.

The U.S. Department of Justice is not the only federal agency interested in fighting fraud with whistleblower support. The U.S. Securities Exchange Commission, the U.S. Internal Revenue Service, the U.S. Commodity Futures Trading Commission, and the U.S. Department of Transportation all have programs that reward whistleblowers with as much as 30 percent of what is recovered in exchange for helping initiate and develop successful anti-fraud cases.

0 views0 comments

Recent Posts

See All