The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and the Financial Institutions Anti-Fraud Enforcement Act (FIAFEA) implemented regulations to allow DOJ to issue rewards to confidential whistleblowers who submit a tip that leads to enforcement of certain criminal statutes. Unlike other whistleblower programs, a FIRREA whistleblower submits a confidential declaration directly to DOJ — without filing a lawsuit or involving other government agencies.
The FIRREA whistleblower program primarily focuses on violations that affect federally-insured banks, credit unions, and other financial institutions. The violations include wire, telephone, mail, and internet fraud, which covers a significant variety of common financial scams. FIRREA also extends to falsification of bank records, embezzlement, and concealment of assets.
Since the 2008 financial crisis, DOJ has obtained judgments and settlements totaling over $150 billion in fines and damages. The whistleblower award is calculated on a sliding scale based on the government’s recovery:
- 20–30% of the first $1 million recovered;
- 10–20% of the next $4 million recovered; and
- 5–10% percent of the next $5 million recovered.
Collectively, if the government were to recover more than $10 million as a result of a FIRREA declaration, the whistleblower award could be as high as $1.6 million.
In some instances, a FIRREA declaration may be submitted to DOJ in tandem with, or as an alternative to, a False Claims Act (FCA) complaint filed in court. Unlike an FCA complaint, a FIRREA declaration is confidential and generally will not be made available to the public. However, a FIRREA declaration provides limited legal recourse for the whistleblower if DOJ decides against pursuing an enforcement action based on the allegations and evidence in the declaration.
How do I know if I have a case?
Contact our firm for a free, confidential consultation to evaluate your case. To make the most of your call, have the following information ready, if known:
- What type of bank, wire, or related fraud did the defendants engage in?
- How did this conduct negatively impact banks, credit unions, and other regulated financial institutions?
- What information or evidence do you have to show that this conduct was not mere mistake?
- How much was the financial loss or risk that resulted from this conduct?
