Yes, overseas individuals can file whistleblower lawsuits in the United States. The False Claims Act (FCA), one of the most powerful tools for combating fraud against the U.S. government, allows individuals or entities, even non-U.S., to bring qui tam lawsuits if they have information and evidence of fraud involving funds of the United States government or its agencies. This has made the FCA and other U.S. whistleblower laws highly effective in uncovering global fraud schemes that would otherwise go undetected.
Many overseas whistleblowers have successfully used these laws to expose fraud involving U.S. government programs and contracts, customs violations, and other fraudulent practices. If the fraudulent activity involves U.S. government funds, individuals and companies located outside the U.S. can file claims under the FCA and other U.S. whistleblower programs and may be eligible for significant financial rewards.
Under the FCA, being represented by U.S. legal counsel, a whistleblower attorney, is required. Under other U.S. whistleblower programs, being represented by a whistleblower attorney in the United States is only required if you want to remain anonymous. However, given the complexity of whistleblower laws and claim procedures, proceeding without a whistleblower attorney is highly ill-advised.
How U.S. Whistleblower Laws Apply to Foreign Nationals
The FCA incentivizes individuals to report fraud by offering monetary rewards to whistleblowers (also called “relators“) whose information leads to successful government recoveries. Whistleblowers can file qui tam lawsuits in the United States on behalf of the U.S. government and are eligible for rewards of between 15% and 30% of the amount recovered in the matter, whether by settlement or judgment. This applies not only to U.S. citizens but also to foreign nationals who uncover fraud involving U.S. funds.
Laws like the FCA are designed to encourage whistleblowers to report fraud, even when the fraudulent activities in question are occurring or have occurred overseas. Examples include federal contractors violating U.S. government contracting rules in foreign countries or foreign companies that are involved in schemes to evade U.S. customs duties on goods imported into the United States.
In many cases, only individuals located outside the United States know about and can obtain evidence about such activities. They have successfully filed U.S. whistleblower claims and been awarded significant sums for their role in exposing fraud.
Example: Karadag v. Luchiano Visconti Loutie LLC
A notable example of an overseas individual successfully filing a whistleblower lawsuit in the United States is the case of Karadag v. Luchiano Visconti Loutie LLC. It involved a scheme by which a United States importer underreported the value of its imports from Turkey to evade customs duties. The whistleblower, represented by Mark A. Strauss Law, resided in Turkey, where he worked for the Turkish supplier that sold the merchandise in question. He filed a qui tam whistleblower case under the False Claims Act in December 2018. The U.S. Department of Justice later intervened in the matter, which resulted in a $3.64 million settlement and a $728,000 whistleblower reward.
Following the settlement, Mark Strauss noted that customs fraud whistleblowers are essential to maintaining a fair and competitive market for law-abiding importers. “Whistleblowers like our client in this case play an important role in leveling the playing field for honest importers who responsibly declare and pay the duties they owe,” Strauss said.
The matter illustrates the significant role that overseas whistleblowers can play in uncovering fraud affecting U.S. government funds. It also highlights how whistleblowers from outside the U.S. can successfully use U.S. whistleblower laws to bring fraud to light, particularly in industries involving international trade.
U.S. Whistleblower Laws and Global Reach
While the FCA is one of the most widely used whistleblower laws, other U.S. whistleblower programs, including those run by the IRS, SEC, and CFTC allow whistleblowers from anywhere, including outside the United States, to report fraud and misconduct that affect the United States. These programs are designed to tackle global corruption, bribery, securities fraud, and other illegal activities that impact U.S. interests.
Foreign nationals have increasingly used these laws to expose corruption and fraud, and U.S. authorities have welcomed their involvement. For example, the U.S. Securities and Exchange Commission (SEC) has awarded millions of dollars to foreign whistleblowers who provided valuable information leading to enforcement actions under the Foreign Corrupt Practices Act (FCPA) and the federal securities laws.
U.S. whistleblower laws offer significant protections and incentives to encourage individuals worldwide to report fraud, regardless of where the misconduct occurs. If a foreign individual has direct knowledge of fraud that involves U.S. government funds or violates U.S. law, they can file a whistleblower lawsuit in the United States and, if the matter is successful, receive a financial reward.
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