2024 was a big year for news in the whistleblower world! In addition to a steady stream of resolutions under the False Claims Act, the Department of Justice launched a new whistleblower pilot program. What’s more, the United States levied enormous penalties against the world’s most substantial cryptocurrency exchange and made clear that cybsersecurity will be a priority in the coming years. WLC and its colleagues had a record-breaking settlement in Illinois, and a whistleblower prevailed in a hard fought litigation against a major pharmacy. We detail these developments below. Keep your eye on our News blogs for regular updates in 2025.
Department of Justice Whistleblower Pilot Program Launches in 2024
One of the biggest headlines in 2024 was DOJ’s launching of a Corporate Whistleblower Awards Pilot Program. This opens a new lane for whistleblowers to report on criminal behavior and be eligible for an award. The program covers financial crimes, domestic or foreign corruption, and/or health care fraud involving private insurance companies. It will focus on four major enforcement areas:
- Violations by financial institutions, their insiders, or agents;
- Violations related to foreign corruption and bribery;
- Violations committed by or through companies related to the payment of bribes or kickbacks to domestic public officials; and
- Federal health care law violations that are not covered by the Federal False Claims Act.
The DOJ program will follow the process outlined below.
Binance Pays $4 Billion in Penalties
Binance and its principal, Changpeng Zhao (Zhao), agreed to pay a historic level of corporate penalties to settle multiple criminal charges. The charges included operating an unlicensed money service business, failing to maintain an effective anti-money laundering program, and violating the International Emergency Economic Powers Act (IEEPA). Binance agreed to pay over $4 billion, and Zhao will resign from his role as CEO. While the settlement does not mention a particular whistleblower, there are avenues — and potential rewards — for those in the crypto and financial industries to report misconduct.
The guilty pleas followed an extensive investigation by the DOJ, FinCEN, OFAC, and the CFTC. Kudos to this coordinated government effort!
Record Setting Cybersecurity Whistleblower Settlement and New Guidelines
Guidehouse Inc., made news in 2024 when it agreed to the largest ever cybersecurity whistleblower settlement. The U.S. alleged Guidehouse failed to meet cybersecurity requirements while administering New York state’s Emergency Rental Assistance Program during the COVID-19 pandemic.
In other 2024 cybersecurity whistleblower news, there are new security guidelines that federal contractors must follow. The guidelines apply to any contractor doing business with the federal government. They require contractors to adhere to these guidelines for safeguarding sensitive information. A failure to follow these guidelines could lead to liability under the False Claims Act. The government is looking for whistleblowers to report those who violate these rules or falsely certify compliance with them.
PharMerica Agrees to $100 Million FCA Settlement
Another whistleblower has held a large company to account under the False Claims Act! In this case, a whistleblower alleged that PharMerica engaged in an unlawful kickback scheme. PharMerica is an in-house pharmacy services provider for nursing homes. The whistleblower claimed that PharMerica illegally offered heavily discounted prices for some patients in exchange for access to more-lucrative patient populations. This led to an explosion of government reimbursements. In 2006, Medicare and Medicaid paid $308 million in reimbursements to PharMerica. By 2012, that had soared to $1.2 billion. This case was a long haul for the whistleblower and his lawyers, but led to a very impressive result. In fact, the $100 million settlement is one of the largest recoveries in a False Claims Act case that had been declined by the federal government.
WLC Participates in Largest Settlement Ever Under Illinois False Claims Act
Along with many other firms across the country, WLC was proud to represent a whistleblower in a groundbreaking municipal bond fraud case. Our client, Edelweiss Fund LLC, alleged that eight large banks engaged in widespread fraud and collusion in the fees they charged and the interest rates they set for municipal bonds. Specifically, the allegations related to the banks’ handling of VRDOs. The defendant banks included: Bank of America, Barclays, Citigroup, JPMorgan Chase, Morgan Stanley, Fifth Third Bancorp, BMO, and William Blair.
In 2024, the Illinois case settled for $70 million, a record under the Illinois law. Cases in other states are ongoing.
Update to the CFTC Whistleblower Program
The Commodity Futures Trading Commission (CFTC) released preliminary guidance regarding the trading of voluntary carbon credits on designated contract markets. One of the most important tools in the CFTC’s fraud-fighting arsenal is its Whistleblower Program. This program aims to safeguard the commodity markets and reward whistleblowers for reporting potential violations of the Commodity Exchange Act (CEA). This could include violations related to the voluntary carbon markets. The CFTC’s Whistleblower Program offers financial incentives to whistleblowers and ensures privacy and confidentiality. It also has safeguards against retaliation. Whistleblowers who provide voluntary information leading to the recovery of at least $1 million in penalties by the CFTC (or related authorities) may qualify for awards of up to 30% of the collected penalties.
Whistleblower Law Collaborative LLC
Whistleblower Law Collaborative LLC devotes its practice entirely to representing clients nationwide in bringing whistleblower actions. Our clients bring actions under the federal and state false claims acts, and other whistleblower programs including those addressing financial fraud. If you are considering becoming a whistleblower or are aware of other types of fraud, contact us for a free, confidential consultation.
