Have you ever seen a connection between whistleblowers and pawn brokers? Up until recently, neither had I. However it appears going forward, they’re kinda like cousins. A NY Times article titled Hedge funds betting on IRS whistleblowers makes the connestion. It states:
Hedge funds have found a new market to invest in: whistleblowers.
Informants who turn in tax cheats have to wait years to get their share of any reward from the IRS’s recently expanded whistleblower program. So hedge funds, private equity groups and other big investors are offering an alternative. They are essentially agreeing to buy a percentage of those future payouts in exchange for a smaller amount upfront to the whistleblowers…
While the market in whistleblower futures is in its infancy, investors have been requesting as much as 65 percent of any award an informant receives, according to lawyers negotiating possible deals. Although the IRS has long accepted tips from informants, until recently it seemed reluctant to investigate their complaints or reward them. For the five years ended in 2008, the IRS received about 80 whistleblower complaints a year and recovered an average of $155 million a year from tips in previous years, paying an average of $14 million annually in awards. Since sweetening its awards, the whistleblower’s office has been receiving more than 500 tips a year, involving far larger amounts.
I previously wrote about whistleblowers here and here. For instance I stated:
- I’m convinced that whistleblower protections and rights will continue to gain in stature and strength under this administration.
- I believe the whistleblower will become a primary tool for law enforcement in the future. In effect, the whistleblower becomes the low cost alternative to the investigative task force.
- The whistleblowers role of exposing silent problems in organizations will grow in importance in the future.
If hedge funds start acting as pawn brokers when it comes to IRS Whistleblowers as the article suggests, the future role of whistleblowers has just been heightened. Yes, the whistleblower in the future will likely be an advocate of justice, a deterrent to crime, and a thorn for illegal businesses everywhere attempting to skirt the law. Beware!
