Whistleblowers can bring claims under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) pursuant to a companion statue, the Financial Institutions Anti-Fraud Enforcement Act. FIRREA imposes civil penalties if the government can prove, under a lower burden of proof than a criminal case, violations of specified criminal statutes, including bank fraud and mail/wire fraud affecting a federally insured financial institution.
FIRREA enforcement is an important civil enforcement remedy for the government and it is anticipated that the Department of Justice (DOJ) may invoke civil penalties relating to Paycheck Protection Program (PPP) under FIRREA.
Key features of the FIRREA, or more specifically, the FIRREA companion Financial Institutions Anti-Fraud Enforcement Act (“FIAFEA”), whistleblower program are:
• FIRREA allows whistleblowers to report potential FIRREA violations to the attorney general in a confidential declaration setting forth allegations of fraud, much like the False Claims Act (“FCA”). DOJ may then investigate the allegations to determine whether to pursue FIRREA charges. The basis of the confidential declaration cannot be established on information that has been publicly disclosed, unless the declarant is the original source of that information.
• A FIRREA whistleblower may receive a reward of up to a maximum of $1.6 million.
• The procedures for FIRREA whistleblowers are different from the FCA. For example, if the government declines to intervene, the FIRREA whistleblower may only proceed if the government affirmatively contracts out to the whistleblower to bring the lawsuit.
• FIRREA civil enforcement has a ten (10) year statute of limitations.
• Under FIRREA, a declination of criminal charges does not preclude the DOJ from bringing a civil enforcement action if DOJ can prove by a preponderance of evidence that a FIRREA offense occurred.
• The Government may pursue FIRREA and FCA in the same case.
Should you need assistance with a FIRREA or FCA whistleblower matter, please contact our law office.
