DOJ Launches Fast-Track Whistleblower Rewards Program

The U.S. Department of the Treasury is committing $25 million to the program, which has an initial three-year term. Although these up-front awards are modest, WHIP's expedited payments remove a lot of uncertainty and will likely lead to an increase in the volume and speed of whistleblower reporting. And, as announced, the whistleblowers will still be eligible for additional awards upon case resolution under other existing whistleblower programs in cases resulting in large financial penalties or forfeiture amounts.

WHIP Builds on DOJ's Corporate Whistleblower Awards and Similar Programs

WHIP was created only 19 days after Assistant Attorney General McDonald issued his October 1, 2026, Directive 26-12: Corporate Enforcement in the Fight Against Fraud, which directed Division leadership to implement programs that appropriately incentivize whistleblowers to report fraud and credible information pertaining to fraud.

This new whistleblower reward program closely tracks the DOJ's stated mission to continue targeting what it perceives as a massive level of fraud in government-funded programs, as we previously reported on the DOJ Criminal Division's August 1, 2024, announcement of its Corporate Whistleblower Awards Pilot Program (Whistleblower Program). Under the 2024 Whistleblower Program, a whistleblower receives a percentage of forfeited assets, but only after a successful prosecution and forfeiture proceedings, which could potentially take years. WHIP fills that gap by promising a defined reward upon filing of criminal charges. The programs are cumulative, so WHIP recipients remain eligible for larger whistleblower awards upon the conclusion of the matter.

Limited Categories of Fraud and Information Qualify for WHIP Payments

At this time, WHIP rewards are limited to an award in exchange for information pertaining to certain categories of fraud. Specifically, the program's terms and conditions state that, to be eligible, a tip must relate to one of the following offenses:

1. Federal health care offenses and related crimes involving health care benefit programs, or fraud against patients or others in the health care industry; or
2. Fraud on Programs or Benefits administered by the following agencies:
   • Department of Agriculture (e.g., the Supplemental Nutrition Assistance Program);
   • the Department of Labor (e.g., unemployment fraud);
   • the Department of Health and Human Services;
   • the Department of Housing and Urban Development;
   • the Department of Education (e.g., student aid fraud);
   • the Department of Veterans Affairs;
   • the Department of War; or
   • the Small Business Administration.

The Fraud Rewards Program places a particular emphasis on submissions involving the following subject matter areas:

• Hospice;
• Home health care;
• Day care; or
• Special services fraud.

Additionally, a whistleblower must be an individual and cannot be a DOJ employee or contractor, a foreign government official, or a meaningful participant in the alleged criminal activity. The pool of potential whistleblowers is otherwise broad, as it can include company employees, patients, beneficiaries, as well as competitors and even employees of business partners, subcontractors, or vendors.

The tip must also qualify as "original" information, meaning it is: (a) non-public; (b) not previously known to the DOJ or materially adds to the information the DOJ already possesses; and (c) derived from the individual's independent knowledge or analysis. Information obtained through privileged communications, or by officers, directors, compliance auditors, or investigators generally does not qualify, subject to certain exceptions described below.

However, in certain circumstances, even company officers, directors, principals, as well as internal or third-party auditors and compliance employees may be eligible for a reward, including: (i) at least 120 days have passed since they reported the information to their superior, the relevant audit committee, or an executive (or their equivalent); or (ii) immediately, if they received the information under circumstances indicating that the entity's audit committee, executives (or their equivalents), or their supervisor was already aware of the incriminating information.

Mitigating Risk

Charging-stage rewards will likely accelerate whistleblower reporting. As discussed in our recent alert, the Fraud Division is also pairing tips with data analytics and federal-state task forces. These developments underscore the importance of effective internal compliance and reporting systems. Companies, particularly those that receive federal health care or other government program funds, should consider the following steps:

1. Strengthen Internal Reporting: Ensure hotlines are accessible, well-publicized, and trusted, and that employees know their concerns will be taken seriously and addressed promptly;
    
2. Investigate Quickly: Treat the 120-day window as a hard deadline. Allegations raised internally should therefore be triaged, escalated, and investigated promptly. So long as any self-reporting is made within 120 days, that report can both qualify for a declination under the Department's Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP) and render a whistleblower's report unoriginal;
    
3. Review Confidentiality and Separation Agreements: The DOJ warned that attempting to use confidentiality agreements to hinder or discourage whistleblowers may weigh against the company's cooperation credit and could even lead to obstruction charges. Policies, employment agreements, and severance terms should be reviewed for language that could be viewed as restricting reporting, and revised accordingly;
    
4. Prevent Retaliation: The DOJ will consider retaliation in assessing cooperation credit and may take enforcement action in response. Managers and other key personnel should be trained accordingly, and employment actions involving potential whistleblowers should be carefully reviewed to minimize potential adverse effects; and
    
5. Stress-Test High-Risk Areas: Federal program-funded businesses should conduct proactive audits of highly scrutinized areas such as billing, documentation, third-party vendors, referral relationships, and certifications.

WHIP makes initial whistleblower rewards faster and more certain. For companies, the time frame to report has become shorter and more definite, and an effective and pressure-tested compliance program is the best way to stay ahead.

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With extensive government regulation, enforcement, and investigations experience, Baker Donelson has the tools to help clients navigate the ever-changing landscape of corporate compliance and regulatory enforcement. If you have any questions, please contact a member of Baker Donelson's Government Enforcement and Investigations Team.