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I know, I know, "bounties" are a fraught concept. Some people find "snitching" odious. But this is a tantalizing use case. All the author of this piece got out

I know, I know, "bounties" are a fraught concept. Some people find "snitching" odious. But this is a tantalizing use case. All the author of this piece got out of their legwork was another article, but it also yielded some money for the federal government: > Two days after I emailed Finwall in April inquiring about the Xie Foundation’s purchase of the house, the foundation filed records with the California attorney general’s office, stating that it had “discovered a self-dealing event” and including a federal tax return with the word “amended” handwritten at the top. In his email to ProPublica, Finwall said that, after amending its returns, the foundation “paid some excise taxes related to Mr. Xie’s stay at the property.” Maybe we can give 1% of the recovered tax to forensic accountant bounty hunters willing to vet the appropriate nonprofit filings. As is, the IRS seems under-resourced for this kind of work, and there's no real incentive for anybody else to do it unless they're a journalist -- and you can only write this kind of story so many times. Maybe each submitted case costs $100 or some other fee sufficient to deter spammers. I strongly suspect there's a class of feisty semi-retired accountants who'd be happy to spend some of their golden years on this kind of thing. If we're worried about small nonprofits, we can set a minimum claimed deduction that's subject to a bounty.

cavisne 3y ago
A fraud whistleblower got a 200 million dollar bounty this year from the SEC
- mycologos 3y ago
  Cool! It looks like the SEC whistleblower program has more generous terms than 1% [1]: > The Commission is authorized by Congress to provide monetary awards to eligible individuals who come forward with high-quality original information that leads to a Commission enforcement action in which over $1,000,000 in sanctions is ordered. The range for awards is between 10% and 30% of the money collected. Submitting a tip appears to be pretty simple, too. If you want anonymity you'll need to go through a lawyer, but other than that, it's just a web form [2]? [1] https://www.sec.gov/whistleblower https://www.sec.gov/whistleblower [2] https://tcr.sec.gov/TcrExternalWeb/faces/pages/intake.jspx https://tcr.sec.gov/TcrExternalWeb/faces/pages/intake.jspx
  - JKCalhoun 3y ago
    > If you want anonymity you'll need to go through a lawyer Sounds like a business opportunity then — the company just needs a lawyer on staff. Whistleblower fields the company with a tip, company splits the SEC reward with the whistleblower, maintains anonymity.
    - seanp2k2 3y ago
      Sadly this is the type of bounty hunting that seems quite likely to get a bounty placed on one’s own head. Making a career out of angering the rich and powerful by going after their money isn’t likely to end well.
      - almost_usual 3y ago
        You’ve got it backwards, the rich should fear the masses. There’s a reason Leland Stanford moved to Palo Alto.
        laserlight 3y ago
        > the rich should fear the masses Only if the masses could coordinate, which doesn't happen easily.
        deleted 3y ago
        [deleted]
        dredmorbius 3y ago
        Mob emergence is another hazard, and requires little coordination.
        dredmorbius 3y ago
        What's that reason, for those presently unenlightened?
        3y ago
- tyrfing 3y ago
  Actually $279 million. An interesting part: > Both the $200 million CFTC award and the $279 million SEC award involved individuals who blew the whistle after the agency had already begun to investigate the misconduct at issue.
nobodyandproud 3y ago
Another thought: What if all corporate accountants were required to be government employees? We can start with transnational companies first. Then LLCs and Incs. Disincentivize the massive fraud that we see today.
- prepend 3y ago
  I think this would result in really poor accounting since there’s a big disconnect between a government employer and a company being audited and its books kept. In theory it works because the government auditor would be more interested in justice than corporate interests. In practice, an embedded external employee would not have the relationships to have viable information and would probably end up doing only the most perfunctory level of work to not be fired. My org had this issue where our cyber group embedded an employee in each organization (we basically had a federation of different groups with separate funding streams and incentives) but their career ladders were disconnected from the local org. So the boss in the cyber org never really knew the work and just wanted safety. The org wanted to produce for their mission. So it led to this weird cycle where the embedded cyber person would stop stop every new project. The cyber boss was happy and promoted and gave raises. But it was bad for the org because no new projects.
  - nobodyandproud 3y ago
    It depends on whether accountants’ concerns here are about auditing and fining (indirectly) for non-compliance, or if they’re allowed and expected to block projects. For SEC compliance reporting, I’ve seen banks take it both very seriously and provide the absolute minimum to pass muster such that the COs could barely do their jobs. What’s clear is that the “same old” and “reasonable” approaches aren’t working, and a disruption is needed.
- TacticalCoder 3y ago
  [flagged]
  - nobodyandproud 3y ago
mistermann 3y ago
I believe that for the most part, those who call the shots in law enforcement prefer that people involved are subordinate to them such that important exceptions can be made when necessary. Getting amateurs involved screws things up, though it would substantially improve fighting crime.
- mycologos 3y ago
  Bounty hunters would still be subordinate to law enforcement in this hypothetical scheme, because a bounty submission still has to get approved by somebody inside the appropriate regulatory body. If a corrupt regulatory body wants to protect certain individuals for certain reasons, they can still do that in this system. Note also that the scheme I'm imagining doesn't give bounty hunters any special powers; we're not deputizing people to kick in doors. For example, my understanding of TFA is that the journalist built their cases through public information. The only exception was using their journalist credentials to get access to a "museum" -- but in that case, simply being repeatedly denied seems like sufficient evidence that it's not a museum open to the public, so being a journalist wasn't necessary to the case anyway. It's more plausible to me that a regulatory agency might be too proud to use this kind of help. I have no special knowledge of the IRS, maybe they're in that category.
the-rc 3y ago
Isn't that what Form 211 does? You can get up to 30% of what the IRS collects. https://www.investopedia.com/terms/f/form-211.asp https://www.investopedia.com/terms/f/form-211.asp "In 2021, it was reported that 645 claims were submitted, resulting in 179 awards for a total of $36 million on an additional $245 million collected. In 2020, there were 593 claims and 169 awards for a total of $86.6 million paid out on $472 million in additional collections."
- mycologos 3y ago
  Nice, I was not aware of this. It looks like there are some additional stipulations: * If the subject of the claim is an individual, they must have $200k+ income in at least one of the relevant years, and the amount recovered must exceed $2mil. * You can't have obtained the relevant information through your (or your friend/partner/relative's) activities as a federal employee. * It will probably take about 10 years for the affected party's appeals process to complete itself (see the flow chart on p9 of the linked document, and the chart on p21). * It also appears that the IRS requires more than the publicly available information described in TFA, as p12 of that document implies that "claims based entirely on publicly available information" are also "non-meritorious". So, the exercise conducted by the journalist appears to not qualify for a reward, even though in at least one of the cases it produced a collection. This bit is unclear to me -- I can't tell if it's just ruling out people who spam submissions saying "public figure X is definitely a tax evader!!!" or if you really need to provide additional non-public documents to get anything. There is a random Forbes article about this [2] that claims "the IRS is happiest when you have first-hand (insider information even better) knowledge of the taxpayer and the tax issues". But if you jump through all those hoops, you can get 15-30% of the additional money collected. Form 211 itself is pretty short [3]. [1] https://www.irs.gov/pub/irs-pdf/p5241.pdf https://www.irs.gov/pub/irs-pdf/p5241.pdf [2] https://www.forbes.com/sites/deanzerbe/2021/06/10/tax-whistleblower---the-dos-and-donts-of-filing-a-form-211/?sh=44c73997de27 https://www.forbes.com/sites/deanzerbe/2021/06/10/tax-whistl... [3] https://www.irs.gov/pub/irs-pdf/f211.pdf https://www.irs.gov/pub/irs-pdf/f211.pdf
  - ethbr0 3y ago
    > So, the exercise conducted by the journalist appears to not qualify for a reward, even though in at least one of the cases it produced a collection. The journalist (Jeff Ernsthausen) was able to bargain their way into non-public tours, that provided evidence of tax evasion. Basic sleuthing (photos of premises from the street, phone inquiries about hours, etc) seems like it'd qualify as first-hand information.

cavisne 3y ago

A fraud whistleblower got a 200 million dollar bounty this year from the SEC

mycologos 3y ago
Cool! It looks like the SEC whistleblower program has more generous terms than 1% [1]: > The Commission is authorized by Congress to provide monetary awards to eligible individuals who come forward with high-quality original information that leads to a Commission enforcement action in which over $1,000,000 in sanctions is ordered. The range for awards is between 10% and 30% of the money collected. Submitting a tip appears to be pretty simple, too. If you want anonymity you'll need to go through a lawyer, but other than that, it's just a web form [2]? [1] https://www.sec.gov/whistleblower https://www.sec.gov/whistleblower [2] https://tcr.sec.gov/TcrExternalWeb/faces/pages/intake.jspx https://tcr.sec.gov/TcrExternalWeb/faces/pages/intake.jspx
- JKCalhoun 3y ago
  > If you want anonymity you'll need to go through a lawyer Sounds like a business opportunity then — the company just needs a lawyer on staff. Whistleblower fields the company with a tip, company splits the SEC reward with the whistleblower, maintains anonymity.
  - seanp2k2 3y ago
    Sadly this is the type of bounty hunting that seems quite likely to get a bounty placed on one’s own head. Making a career out of angering the rich and powerful by going after their money isn’t likely to end well.
    - almost_usual 3y ago
      You’ve got it backwards, the rich should fear the masses. There’s a reason Leland Stanford moved to Palo Alto.
      - laserlight 3y ago
        > the rich should fear the masses Only if the masses could coordinate, which doesn't happen easily.
        deleted 3y ago
        [deleted]
        dredmorbius 3y ago
        Mob emergence is another hazard, and requires little coordination.
      - dredmorbius 3y ago
        What's that reason, for those presently unenlightened?
        3y ago
tyrfing 3y ago
Actually $279 million. An interesting part: > Both the $200 million CFTC award and the $279 million SEC award involved individuals who blew the whistle after the agency had already begun to investigate the misconduct at issue.

nobodyandproud 3y ago

Another thought: What if all corporate accountants were required to be government employees? We can start with transnational companies first. Then LLCs and Incs. Disincentivize the massive fraud that we see today.

prepend 3y ago
I think this would result in really poor accounting since there’s a big disconnect between a government employer and a company being audited and its books kept. In theory it works because the government auditor would be more interested in justice than corporate interests. In practice, an embedded external employee would not have the relationships to have viable information and would probably end up doing only the most perfunctory level of work to not be fired. My org had this issue where our cyber group embedded an employee in each organization (we basically had a federation of different groups with separate funding streams and incentives) but their career ladders were disconnected from the local org. So the boss in the cyber org never really knew the work and just wanted safety. The org wanted to produce for their mission. So it led to this weird cycle where the embedded cyber person would stop stop every new project. The cyber boss was happy and promoted and gave raises. But it was bad for the org because no new projects.
- nobodyandproud 3y ago
  It depends on whether accountants’ concerns here are about auditing and fining (indirectly) for non-compliance, or if they’re allowed and expected to block projects. For SEC compliance reporting, I’ve seen banks take it both very seriously and provide the absolute minimum to pass muster such that the COs could barely do their jobs. What’s clear is that the “same old” and “reasonable” approaches aren’t working, and a disruption is needed.
TacticalCoder 3y ago
[flagged]
- nobodyandproud 3y ago

mistermann 3y ago

I believe that for the most part, those who call the shots in law enforcement prefer that people involved are subordinate to them such that important exceptions can be made when necessary. Getting amateurs involved screws things up, though it would substantially improve fighting crime.

mycologos 3y ago
Bounty hunters would still be subordinate to law enforcement in this hypothetical scheme, because a bounty submission still has to get approved by somebody inside the appropriate regulatory body. If a corrupt regulatory body wants to protect certain individuals for certain reasons, they can still do that in this system. Note also that the scheme I'm imagining doesn't give bounty hunters any special powers; we're not deputizing people to kick in doors. For example, my understanding of TFA is that the journalist built their cases through public information. The only exception was using their journalist credentials to get access to a "museum" -- but in that case, simply being repeatedly denied seems like sufficient evidence that it's not a museum open to the public, so being a journalist wasn't necessary to the case anyway. It's more plausible to me that a regulatory agency might be too proud to use this kind of help. I have no special knowledge of the IRS, maybe they're in that category.

the-rc 3y ago

Isn't that what Form 211 does? You can get up to 30% of what the IRS collects. https://www.investopedia.com/terms/f/form-211.asp https://www.investopedia.com/terms/f/form-211.asp "In 2021, it was reported that 645 claims were submitted, resulting in 179 awards for a total of $36 million on an additional $245 million collected. In 2020, there were 593 claims and 169 awards for a total of $86.6 million paid out on $472 million in additional collections."

mycologos 3y ago
Nice, I was not aware of this. It looks like there are some additional stipulations: * If the subject of the claim is an individual, they must have $200k+ income in at least one of the relevant years, and the amount recovered must exceed $2mil. * You can't have obtained the relevant information through your (or your friend/partner/relative's) activities as a federal employee. * It will probably take about 10 years for the affected party's appeals process to complete itself (see the flow chart on p9 of the linked document, and the chart on p21). * It also appears that the IRS requires more than the publicly available information described in TFA, as p12 of that document implies that "claims based entirely on publicly available information" are also "non-meritorious". So, the exercise conducted by the journalist appears to not qualify for a reward, even though in at least one of the cases it produced a collection. This bit is unclear to me -- I can't tell if it's just ruling out people who spam submissions saying "public figure X is definitely a tax evader!!!" or if you really need to provide additional non-public documents to get anything. There is a random Forbes article about this [2] that claims "the IRS is happiest when you have first-hand (insider information even better) knowledge of the taxpayer and the tax issues". But if you jump through all those hoops, you can get 15-30% of the additional money collected. Form 211 itself is pretty short [3]. [1] https://www.irs.gov/pub/irs-pdf/p5241.pdf https://www.irs.gov/pub/irs-pdf/p5241.pdf [2] https://www.forbes.com/sites/deanzerbe/2021/06/10/tax-whistleblower---the-dos-and-donts-of-filing-a-form-211/?sh=44c73997de27 https://www.forbes.com/sites/deanzerbe/2021/06/10/tax-whistl... [3] https://www.irs.gov/pub/irs-pdf/f211.pdf https://www.irs.gov/pub/irs-pdf/f211.pdf
- ethbr0 3y ago
  > So, the exercise conducted by the journalist appears to not qualify for a reward, even though in at least one of the cases it produced a collection. The journalist (Jeff Ernsthausen) was able to bargain their way into non-public tours, that provided evidence of tax evasion. Basic sleuthing (photos of premises from the street, phone inquiries about hours, etc) seems like it'd qualify as first-hand information.