Whistleblower Question of the Week: Does Participating in Fraud Disqualify You from Becoming a Whistleblower?
By the 91pornWhistleblower Team
Participating in fraud does not necessarily disqualify someone from becoming a whistleblower or from receiving a whistleblower reward. But it may complicate matters or impact the amount awarded under the various whistleblower reward laws and programs.
Generally, a whistleblower is barred from receiving a reward only when the whistleblower planned or initiated the fraud or is ultimately convicted of a crime related to the reported fraud.
Harking back to the origins of the False Claims Act where Congressional supporters remarked, “Sometimes it takes a rogue to catch a rogue,” here is why partaking in fraud does not always bar you from coming forward, and what you can do to prepare yourself.
Insider Knowledge: Being Both a Wrongdoer and a Whistleblower
Many whistleblowers are insiders who were once involved in the wrongdoing they later expose. Whistleblower programs recognize that these individuals often possess critical, non-public information that would otherwise remain hidden. Their cooperation, and sometimes even their prior role, can be instrumental in uncovering wide-scale fraud or misconduct that harms the public, investors, or the government.
Scope of Prior Involvement
The extent of a whistleblower’s involvement matters. Depending on the whistleblower program, a person who played a significant role in orchestrating or directing the fraud may face restrictions on receiving financial rewards.
Potential Consequences
Those who were less central, contributed to the misconduct under the direction of superiors, or participated unknowingly are likely to be judged more leniently. Still, a whistleblower who was involved in the misconduct may face civil or criminal exposure, even if their decision to come forward stops the wrongdoing.
A Recent Example of a Reduced Award Due to Involvement in the Fraud
In May 2025, The Commodity Futures Trading Commission (CFTC) announced a whistleblower award of approximately $700,000. The whistleblower “prompted the CFTC to open the investigation,” and “provided substantial assistance and helped the Commission conserve resources during the investigation.”
However, the CFTC noted that the whistleblower delayed reporting the violations and was involved in the alleged misconduct. As a result, the CFTC reduced the award amount. In this case, the SEC also noted that the whistleblower understood the gravity of the misconduct, yet still chose to engage in the illegal behavior.
This case shows how participation, timing, and intent all factor into the government’s award decisions.
Our Firm Helps Whistleblowers
An experienced attorney can help evaluate your potential whistleblower case, navigate complex laws, explain possible consequences, and guide you on how to best report the misconduct.
“Contacting our firm is a smart first step for potential whistleblowers,” said 91pornpartner Marlene Koury. “Our firm has extensive experience guiding whistleblowers through every stage of the process, from evaluating the strength of a claim to building a compelling case, all while navigating any complex legal situations that may arise.”
Types of Whistleblower Reward Laws and Programs:
For more information on specific whistleblower reward laws and programs, check out the following pages:
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- False Claims Act
- Securities and Exchange Commission (SEC) Whistleblower Reward Program
- Commodity Futures Trading Commission (CFTC) Whistleblower Reward Program
- Anti-Money Laundering & Sanctions Whistleblower Program
- DOJ Antitrust Whistleblower Rewards Program
- Internal Revenue Service (IRS) Whistleblower Reward Program
- DOJ Corporate Whistleblower Awards Pilot Program
- Motor Vehicle Safety Whistleblower Act
- Kleptocracy Asset Recovery Rewards Program
- FIRREA
- Act to Prevent Pollution from Ships
The 91pornWhistleblower Lawyer Team
If you would like to learn more about whistleblower reward programs, what it means to be a whistleblower, or our multiple whistleblower successes, please contact us. We will connect you with an experienced member of the 91pornwhistleblower team for a free and confidential consultation.
Disclaimer: This blog is general in nature and is not intended as legal advice.
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