The law of economics and human nature seem to agree on this much: If you pay someone for reporting a crime, you’ll probably catch more criminals. With that in mind, federal lawmakers are hoping that more financial fraud whistleblowers will come forward now that they’re offering them a piece of any ill-gotten gains that are recovered.

Explains the LA Times: Tucked in the massive bill is a provision that for the first time extends a concept long applied to government contracts to the private sector. It gives whistle-blowers a mandatory 10% — and as much as 30% — of what the government recoups in fines and settlements in financial fraud cases. These can include insider trading, false earnings reports and classic Ponzi schemes. To claim a bounty, the whistle-blower must provide the Securities and Exchange Commission with "original information" that reveals the fraud and leads to a successful recovery. 

But Vivienne Schiffer of the Houston office of Thompson & Knight says that a new whistleblower incentive in the new U.S. financial reform package could work against the best interests of companies. Schiffer says that in the past, company employees might have tried to prevent corruption from occurring in the first place. But thanks to the new incentive, now they might simply wait for the right moment to dial regulators.

“Unfortunately, instead of employees working with the company to improve anti-corruption standards, I can see employees looking the other way until they find just the right economic advantage for themselves,” Schiffer says.

The SEC isn’t the only government agency in the business of rewarding whistleblowers. The Tax Relief and Health Care Act of 2006 allows the Internal Revenue Service to pay whistleblowers 15 to 30 percent of all funds recovered by the IRS when they successfully pursue a case. That program is limited to claims against taxpayers whose gross annual income exceeds $200,000 and whose potential indebtedness for taxes, penalties, and interest is more than $2 million.

More recently, the the health care reform legislation of 2011 calls for high-tech bounty hunters to root out health care fraud. According to Bloomberg: The health overhaul makes it easier for citizens to be rewarded for uncovering swindles, cuts the time before medical providers can be accused of withholding overpayments from Medicare and Medicaid, and includes pages of complicated new rules that can be broken.