Only time will tell if the USA’s new whistleblower program will bear fruit
WHIP will reward whistleblowers at an earlier stage of the prosecution. Buddy Parker discusses whether it’s substantive or performative.
On October 20, 2026, the US Justice Department (DOJ) and the National Fraud Enforcement Division (Fraud Division) announced the establishment of the Fraud Whistleblower Incentive Program (WHIP), the “first ever whistleblower rewards program that pays an up-front award for tips leading to criminal charges.”[1]
WHIP “will pay whistleblowers an award of $10,000 to $30,000 for information leading to criminal charges related to certain government programs,” including federal health care programs administered by Health and Human Services and programs administered by the departments of Agriculture, Labor, Housing and Urban Development (HUD), Education, Veteran Affairs, Small Business Administration (SBA), and Defense (War).
The announcement noted that WHIP “rewards whistleblowers at a much earlier stage of prosecution [ ] encourage[ing] prompt disclosure of information by giving whistleblowers more certainty about the amount and timing of a possible reward payment, while still leaving whistleblowers eligible for potentially larger rewards should their tips ultimately lead to large financial penalties of forfeiture.”
The Department of Treasury has committed $25m to support the program.
Traditional whistleblower programs
For whistleblowers in the US, the primary laws of relevance are the False Claims Act (Federal and State); the Anti-Money Laundering Act (covers proceeds of 80+ criminal statutes, including violations of US economic sanctions, human rights violations, trafficking, and environmental crimes, in addition to the more common money-laundering prosecutions around narcotics trafficking); and the whistleblower programs for the SEC, CFTC, and Internal Revenue Service (IRS).
All these programs were created by statute, and as a general rule provide anonymity and retaliation protection for whistleblowers, and financial awards for whistleblowers who provide “original” information that results in a sanction or recovery of $1m or more, in an amount ranging from 10%-30% of the total amount sanctioned or recovered. A 10% award is the statutory floor, with percentage awards above that being discretionary, though there is a solid precedent for higher awards based on different criteria.
The False Claims Act is the only law that allows private rights of action brought in the name of the United States, but is limited to situations that constitute fraud against the government (such as overcharging or not delivering on government procurement contracts, misuse of federal grants, and Medicare overcharging/fraud).
The overwhelming preference is for the DOJ to intervene and prosecute the claims rather than try it privately; the DOJ typically has >90% success rate once it chooses to intervene, while the costs to privately try the case often range from hundreds of thousands of dollars for large scale frauds to more than $10m.
Unlike the False Claim Act, the Anti-Money Laundering (AML), SEC, CFTC, and IRS whistleblower programs, and the statutes underpinning them, do not provide for private rights of action; the government has to decide to prosecute the case to move it forward. The goal of any filing in these areas is to move it from submission to the relevant government office to active investigation. Typically, 95%+ of claims fail to advance.
What I have observed since the latest Trump administration took office in January 2026, is that the DOJ, US Department of Treasury, and Department of Commerce have stopped all active investigations in these whistleblower areas and in fact no longer employ attorneys or investigative staff necessary to prosecute these offenses.
For context, I am aware of five cases filed with the US government with substantial documentary and physical evidence outlining sanctions violations and money laundering in amounts that range from $100m to $10 billion+. These cases were subject to investigation when the Trump administration took office, yet nothing has happened with them since; indeed, no government attorney or investigative agent has contacted the submitting law firm.
The current situation is that these crimes have been essentially legalized through purposeful non-enforcement. From my experience, these agencies were already heavily understaffed in previous administrations. There were only three attorneys total in the Treasury Department responsible for investigating and prosecuting violations of US economic sanctions, for example. Now, there is none.
Original information
As noted, traditional whistleblower statutory programs require that the information submitted – about the alleged manner and names of the fraud – be “original” information. That is, generally first-hand knowledge of the fraudulent scheme.
One may possess such knowledge if one is a co-conspirator within the conspiracy conducting the fraudulent scheme. One may possess such knowledge if one, while not a co-conspirator, knows of enough facts to provide a “picture” of the fraudulent scheme. Regardless of the basis of one’s knowledge, if someone volunteers original knowledge of a fraudulent scheme to the government, they are taking a risk that they may be incriminating themselves.
While the DOJ’s announcement of the WHIP program did not address a requirement of “original” knowledge, it is believed that the program does require it.
Public reaction to WHIP
In an article published October 21, 2026, the Daily Beast stated, “The President’s offer of cash rewards for exposing fraud didn’t go to plan. The Department of Justice’s new fraud whistleblower scheme has instantly backfired with Americans bombarding it with demands to investigate President Donald Trump.”
Substantive or performative
Given the clear evidence that the government currently is not effectively investigating, much less prosecuting, traditional whistleblower cases, combined with the date (October 20) of the DOJ’s announcement of WHIP – two weeks before Election Day – one can speculate whether WHIP is a substantive program or not. After all, it takes time to investigate an insider’s tip of original information before a deliberative decision can be made whether to prosecute – a condition precedent to receiving an award.
Previously, I addressed the DOJ’s loss of thousands of experienced prosecutors and agents. While there have been efforts undertaken to hire new staff for these roles, these persons are without substantial experience. Complex frauds are simply not being investigated and prosecuted. Therefore, whether WHIP is substantive or performative remains to be seen and only time will tell.
[1] On April 7, 2026, DOJ announced the creation of the Fraud Division focused on investigating and prosecuting persons who commit fraud against government programs.
