Can You Be Both a Defendant and a Whistleblower?

An individual can serve as both a defendant and a whistleblower, particularly in cases involving fraud against the government under the False Claims Act (FCA). While reporting fraud is permitted even if you participated in the scheme, doing so does not grant immunity from criminal charges or civil liability for your own involvement in fraud crimes or other offenses.

DOJ Criminal Division’s Pilot Program on Voluntary Self-Disclosures for Individuals

The Department of Justice (DOJ) Criminal Division Corporate Whistleblower Awards Pilot Program offers certain participants in corporate misconduct the possibility of a non-prosecution agreement (NPA) in exchange for voluntary and timely disclosure. Qualifying for this program requires meeting specific conditions:

• Voluntarily reporting the misconduct before any government investigation begins
• Providing truthful and complete information about all relevant criminal conduct
• Not being the organizer, leader, or primary beneficiary of the scheme
• Cooperating fully with the DOJ throughout the investigation and any resulting prosecution
• Paying back any proceeds personally gained from the illegal activity

Limitations and Liability

Whistleblower status does not automatically shield you from the consequences of your own participation in fraud. The FCA reduces a whistleblower’s recovery share if they planned or initiated the violation, and individuals convicted of related criminal conduct may be barred from receiving any qui tam award altogether.

Cooperation and Plea Deals

When a whistleblower-defendant cooperates meaningfully with a federal investigation, prosecutors in the U.S. Attorney’s Offices for the District of New Jersey may offer reduced charges or favorable plea agreements. Under the U.S. Sentencing Guidelines, substantial assistance to the government can result in a downward departure from the recommended sentencing range, sometimes significantly reducing or eliminating prison time.

False Claims Act (Qui Tam)

The FCA allows whistleblowers who participated in the fraud to file qui tam lawsuits. However, their share of any government recovery may be reduced. Under 31 U.S.C. § 3730(d), if the court finds that the whistleblower planned and initiated the violation, the recovery share can drop to no more than 10% of the total proceeds, compared to the standard 15% to 30% range available to non-culpable relators.

Potential Risks

Acting as both a whistleblower and a defendant creates a unique set of legal dangers that require careful evaluation before taking any action. Making the wrong move at the wrong time can worsen your legal position rather than improve it:

• Statements made during the whistleblower process could be used against you in a criminal prosecution
• Filing a qui tam suit may draw attention to your own role in the fraud
• Cooperating with one agency does not guarantee protection from prosecution by another
• Retaliation claims may be weakened if the employer can point to your own misconduct as grounds for termination
• Public exposure of your involvement could cause lasting reputational and professional harm

Mitigating Risk When Acting as a Whistleblower-Defendant

Balancing the decision to report fraud while protecting yourself from criminal and civil liability demands a strategic legal approach. The Law Offices of Peter Katz has represented clients who occupy this exact position, managing simultaneous whistleblower filings and defense matters in federal courts across New Jersey. We understand how to structure your disclosure to maximize cooperation credit while minimizing your personal exposure.

Call 609-849-3179 or contact us online to schedule a consultation with our New Jersey whistleblower lawyer who can assess the full scope of your situation, advise you on the safest path forward, and coordinate your defense and disclosure strategy to protect your interests at every stage.