DOJ Fraud Division Launches Whistleblower Rewards Program Offering Fast-Track Payments for Fraud Tips

On Oct. 20, the DOJ and its National Fraud Enforcement Division (the Fraud Division) announced the Fraud Whistleblower Incentive Program (WHIP), which DOJ describes as the first-ever whistleblower rewards program that pays an up-front award for tips leading to criminal charges. The program arrives only 19 days after Assistant Attorney General Colin M. McDonald issued Directive 26-12: Corporate Enforcement in the Fight Against Fraud (the Directive), which directed Fraud Division leadership to design programs that incentivize whistleblowers to bring credible fraud information to DOJ. 

WHIP marks a shift in how the Fraud Division sources its cases. Alongside its data analytics work, the Fraud Division is now putting money behind tips and paying out at the charging stage rather than only after final resolution of a matter. For organizations, that changes the odds that a concern raised by an employee or vendor reaches a prosecutor before it reaches the legal department. 

How WHIP Works 

Early, Predictable Awards 

WHIP will pay whistleblowers an award of $10,000 to $30,000 for information leading to criminal charges in specified subject areas. Most existing government whistleblower programs issue awards only after final resolution of a criminal matter, including the forfeiture and appeals process. By contrast, WHIP rewards whistleblowers at a much earlier stage of a prosecution and does not require the matter to result in large fines or forfeiture. DOJ states that these early-stage rewards are meant to encourage prompt disclosure by giving whistleblowers more certainty about the amount and timing of a reward, while leaving them eligible for potentially larger rewards if their tips ultimately lead to large financial penalties or forfeiture.

Awards will be made in DOJ’s sole discretion following the filing of criminal charges. The Department of the Treasury is committing $25 million to support the program’s implementation.

The program’s specific terms and conditions are available at www.justice.gov/fraud/whistleblower.

Eligibility Criteria 

According to the Fraud Division’s program guidance, to be eligible: 

• Participation must be voluntary 
• The whistleblower must provide truthful and complete original information in writing 
• The information must pertain to the defined subject matter areas and lead to criminal charges in those areas 
• The whistleblower must cooperate fully 
• The whistleblower must not have actively participated in the fraud 

 Covered Subject Matter Areas

Information must pertain to: 

• Federal healthcare offenses and related crimes involving healthcare benefit programs, or fraud against patients or others in the healthcare industry; or 
• Fraud on programs or benefits administered by the Department of Agriculture (e.g., the Supplemental Nutrition Assistance Program), the Department of Labor (e.g., unemployment fraud), the Department of Health and Human Services, the Department of Housing and Urban Development, the Department of Education (e.g., student aid fraud), the Department of Veterans Affairs, the Department of War, or the Small Business Administration. 
• For healthcare offenses, WHIP will prioritize submissions involving hospice, home health care, day care, and special services fraud.

 Interaction With Other Whistleblower Programs

WHIP participants remain eligible for additional awards through other rewards programs, including the DOJ Criminal Division’s Corporate Whistleblower Awards Pilot Program. A single tip may therefore produce a quick WHIP payment at the charging stage and a potentially larger award later in the process.

Why WHIP Matters for Organizations  

WHIP is the latest in a series of rapid developments from the Fraud Division, which DOJ created on April 7. The Directive identified healthcare and government contracts and programs among its four priority areas for corporate investigations. And on Oct. 15, the Fraud Division and the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) issued a joint policy making the Fraud Division’s Health Care Fraud Section the single point of entry for self-disclosure of potentially criminal conduct affecting a federal healthcare program. 

Taken together, these developments raise the stakes for timing. Under DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP), a declination generally requires that the organization voluntarily self-disclose the misconduct to an appropriate DOJ criminal component, fully cooperate, and timely and appropriately remediate. A whistleblower who is paid at the charging stage has an incentive to report early, which may shrink the window an organization has to learn of, investigate, and decide whether to self-disclose potential misconduct before DOJ hears about it from someone else. 

Healthcare providers – particularly in hospice and home health – and organizations that participate in or administer federal programs or benefits administered by the covered agencies face the most direct exposure. 

Key Takeaways 

WHIP gives whistleblowers a reason to go to the government, and to go early. Healthcare organizations (particularly hospice, home health care, day care, and special services providers) and other participants in covered federal programs should consider the following:   

• Enhance internal reporting mechanisms. A $10,000 to $30,000 payment is a concrete incentive to report externally. Organizations that have easy-to-use hotlines, encourage internal reporting, and address concerns promptly will be in a better position to identify and address potential issues.
• Map exposure to WHIP’s subject areas. Identify which business lines touch federal healthcare programs or programs and benefits administered by the eight covered agencies. Those are the areas where an outside tip is now most likely, and where internal monitoring and audits should be prioritized.
• Assess and escalate quickly. Establish a process to promptly assess internal reports, including whether conduct may be criminal and whether it touches WHIP’s covered subject areas, and to escalate to counsel where warranted.