Archive for the ‘corporate fraud’ Category
Friday, June 8th, 2012
Ever since it was born out of the passage of the Dodd-Frank financial reform bill in 2010, all eyes have been on the success or failure of the SEC’s Whistleblower Program. Since the program officially went into effect in August 2011, the SEC reports that they have been continually receiving high quality tips at an impressive pace of roughly seven per day. As a result, the fact that, according to insiders, the first payment of an award appears to be imminent, there is a veritable spotlight on the Commission and the award determination process.
In responding to the rumors of a pending award, Sean McKessey, Chief of the SEC Whistleblower Office, has continued to express his enthusiasm for the program and the importance of actually making that first payment. In an article published on Huffington Post, McKessey stated “I view [the program] as already having been a very significant success, but I understand that people want to see the deliverable. And the deliverable, in our view, is paying people for good information…[t]he more the better, obviously.” Further,
As we await official confirmation of the first award payment, the SEC is reminding people that the amount of the award to those who come forward remains subjective, and that the sanctions ultimately imposed against a company must exceed $1 million before they are even eligible for an award. Specifically, at a conference earlier this week, Jane Norberg, deputy chief for the SEC’s Whistleblower Office, told attendees that although there is “no hard and fast formula [in making an award determination] at this point…it is in the SEC’s sole discretion as to how much of an award there is – whether it is 10% or 30% or somewhere in between.”
In an era where the importance of corporate accountability is reaching new heights, the first award from the SEC will undoubtedly send a strong signal. “I think it will be an affirmation that this will not just be a paper program, that we’re not just going out and making speeches,” McKessey said.
Source: The Huffington Post
Wednesday, May 30th, 2012
A former home appraiser for Countrywide (“Countrywide”) Financial will receive a $14.5 million whistleblower reward in connection with a qui tam lawsuit that alleged Countrywide fraudulently inflated appraisals on government insured loans.
The Countrywide qui tam suit, filed by Mr. Kyle Lagow in 2009, was one of five whistleblower complaints that were settled as part of the $25 billion national mortgage settlement that state and federal officials reached with Bank of America and four other lenders this year. Mr. Lagow’s suit was settled for $75 million.
All five qui tam complaints were brought under the whistleblower provisions of the federal False Claims Act, which is a longstanding federal statute that authorizes a private citizen with knowledge of fraud being perpetrated on the federal government to bring a lawsuit on the government’s behalf. If the whistleblower’s suit is successful, the whistleblower may be entitled to up to 30% of the government’s monetary recovery. The False Claims Act also provides for certain protections for employees who are subjected to retaliation for reporting fraud.
Kenney & McCafferty lawyers are experienced in the area of mortgage fraud. If you have knowledge of mortgage fraud and would like to discuss the possibility of a whistleblower award, please contact our attorneys today. Kenney & McCafferty will consult with you about your case, including your ability to remain anonymous in filing for an award, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by the attorney-client privilege.
Tags: mortgage whistleblower, mortgage whistleblower award
Posted in Bank Fraud, bank whistleblower, corporate fraud, False Claims Act, government fraud, mortgage fraud, Recent News, retaliation, Whistleblower Protection | Comments Off
Wednesday, May 23rd, 2012
Last week the Manhattan U.S. Attorney’s Office announced a $202.3 million settlement with Deutsche Bank’s AG mortgage unit for reckless mortgage lending practices. This is the third major bank settlement related to mortgage fraud by the Manhattan U.S. Attorney’s office in 2012, having announced a $158.3 million settlement with Citibank in February and a $132.8 million settlement with Flagstar Bank FSB in March.
Both the Citibank and Flagstar settlements were the result of whistleblower claims filed under the False Claims Act.
In February, the Brooklyn U. S. Attorney’s Office announced a $1 billion settlement with Bank of America related to improper mortgage practices. Part of that settlement included a settlement of two whistleblower actions that had been filed against Bank of America for mortgage fraud.
These cases highlight the importance of whistleblowers and the False Claims Act in continuing to combat financial improprieties at the banking institutions. It also suggests that more mortgage fraud cases brought by whistleblowers will be forthcoming given the success that both the Manhattan and Brooklyn U.S. Attorney’s Offices have experienced working with whistleblowers in this arena.
If you have knowledge of Securities Fraud and would like to discuss the possibility of a whistleblower award under the SEC whistleblower program, please contact our whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, including your ability to remain anonymous in filing for an award, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.
Tags: bank fraud, bank whistleblower, doj investigations, False Claims Act, FHA fraud, HUD fraud, mortgage fraud, mortgage whistleblower, mortgage whistleblower award
Posted in Bank Fraud, bank whistleblower, corporate fraud, False Claims Act, FHA fraud, HUD fraud, mortgage fraud, Uncategorized | Comments Off
Tuesday, March 13th, 2012
Another whistleblower lawsuit with ties to the $1 Billion False Claims Act Bank of America settlement announced on February 9, 2012 by the United States Attorney’s Office for the Eastern District of New York has been unsealed. The suit charges the bank with fraud violations under the Home Affordable Modification Program (“HAMP”).
Gregory Mackler, a former contractor with the servicing outsourcerUrban Lending Solutions, filed the lawsuit in July. The lawsuit charges BofA with developing procedures that kept trainees like Mackler from researching or resolving any HAMP inquiries or complaints in order to avoid millions of dollars in losses while benefitting from the financial incentives of the program. The Treasury Department paid $1.8 billion in HAMP servicer incentives through December, according to the special inspector general of the Troubled Asset Relief Program.
In February, a whistleblower complaint was unsealed from Kyle Lagow, a former employee in a Countrywide appraisal unit which detailed allegations of Countrywide’s “corrupt underwriting and appraisal process. Final settlement documents have yet to be filed in the BoA settlement, which the U.S. Attorney’s Office said was the largest ever False Claims Act payout related to mortgage fraud.
If you have knowledge of Corporate Fraud, including Mortgage Fraud, and would like to discuss the possibility of a whistleblower award under the False Claims Act, please contact our whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.
The Department of Justice has until March 16 to decide whether to intervene in the Mackler and Lagow cases.
Tags: bank whistleblower, False Claims Act, FERA, mortgage whistleblower, Qui Tam
Posted in Bank Fraud, bank whistleblower, corporate fraud, False Claims Act, FHA fraud, HUD fraud, mortgage fraud, Recent News | Comments Off
Tuesday, March 6th, 2012
Reuters has reported that the eleven bank subpoenas issued in January by DOJ expand upon previous document requests by the SEC in its ongoing investigations into improprieties relating to the packaging of residential mortgage securities.
According to the Reuters report, people who have reviewed the subpoenas state that the civil subpoenas ask for documents related to every residential securities offering between 2006 and 2008, including Fannie Mae and Freddie Mac bonds.
The SEC investigation that has been ongoing appears to have been limited to private offerings and did not include Fannie Mae or Freddie Mac bonds. The DOJ subpoenas have also apparently broadened the time period beyond the initial period being investigated by the SEC.
The investigations by the DOJ and the SEC appear to be a part of an inter-agency task force the government has organized to coordinate parallel efforts on current and future investigations. In January, SEC enforcement director Robert Khuzami said that his agency had already reviewed 25 million pages of documents as part of ongoing investigations into residential mortgage-backed securities.
Three firms, JPMorgan Chase & Co, Goldman Sachs Group Inc, and Wells Fargo & Co, have now disclosed that they have already received Wells notices from the SEC related to the SEC residential mortgage backed securities investigations. A Wells notice alerts putative defendants that the SEC is considering bringing charges and gives them a chance to rebut the allegations.
The Wells notice indicate that the SEC’s investigation against these three banks has matured to point that SEC charges should be forthcoming. However, the new round of broader DOJ subpoenas indicates that the government investigations will continue and possibly expand.
Tags: bank fraud, doj investigations, mortgage fraud, sec fraud, sec investigations
Posted in Bank Fraud, bank whistleblower, corporate fraud, FHA fraud, government fraud, mortgage fraud, SEC Whistleblower Program, Uncategorized | Comments Off
Friday, February 17th, 2012
The United States District Court for the District of Nevada recently held that qui tam relators cannot proceed with a case brought pursuant to the False Claims Act (“FCA”) without representation of counsel when the United States declines to intervene in the case. The opinion can be found at Malone v. Ohama Housing Auth., 2011 WL 1435257 (D. Neb. April 14, 2011). In Malone, the court recognized that the FCA is silent on whether a whistleblower can proceed pro se; however, the court relied controlling precedent within the Court of Appeals for the Eight Circuit, United States v. Onan, 190 F.2d 1, 6-7 (8th Cir. 1951), in making its ruling. In Onan, the Eight Circuit held:
[W]e do not think that Congress could have intended to authorize a layman to carry on such suit as attorney for the United States but must have had in mind that such a suit would be carried on in accordance with the established procedure which requires that only one licensed to practice law may conduct proceedings in court for anyone other than himself…it is unthinkable that Congress by this Act intended to license laymen to practice law. The practice of law is affected with a public interest and an attorney at law as distinguished from a layman, has both public and private obligations, being sworn to act with all good fidelity toward both his client and the court.
The Malone court went on to state that the Eight Circuit’s ruling in Onan, supra, has been adopted in numerous other federal court courts, including the Second, Seventh, Ninth, Eleventh, and D.C. Circuits. Malone, 2011 WL 1435257 at * 1(citing Jones v. Jindal, No. 10-7124, 2011 WL 588062, at *1 (D.C. Cir. Feb. 10, 2011); Meidinger v. Healthcare Indus. Oligopoly, 391 F. App’x 777, 780 (11th Cir. 2010); United States ex rel. Mergent Servs. v. Flaherty, 540 F.3d 89, 93-94 (2d Cir. 2008); Timson v. Sampson, 518 F.3d 870, 873-74 (11th Cir. 2008); Stoner v. Santa Clara County Office of Educ., 502 F.3d 1116, 1126-28 (9th Cir. 2007); United States ex rel. Lu v. Ou, 368 F.3d 773, 775-76 (7th Cir. 2005), overruled on other grounds, 129 S.Ct. 2230 (2009)).
While the Malone court left open the possibility that a relator who is also an attorney may proceed without counsel, in that case, because the relator was a non-attorney, the court dismissed the whistleblowers lawsuit. Malone, 2011 WL 1435257 at * 2.
Thursday, May 26th, 2011
Since the Commission’s 3-2 vote adopting the final rules yesterday, the SEC has made the document available on its website at ttp://www.sec.gov/news/press/2011/2011-116.htm
Kenney & McCafferty is carefully reviewing the document and determing how the new rules can benefit those reporting securities violations. For a free consultation about a potential claim of your own, please call K&M today.
Tags: abuse, corporate fraud, False Claims Act, fraud, government fraud, health care fraud, pharmaceutical fraud, retaliate, retaliation, Tax Fraud, tax whistleblower, waste, whistle blower, whistle blowing, whistleblower, whistleblowing, wrongful termination
Posted in corporate fraud, Corporate Tax Fraud, False Claims Act, government fraud, Money Laundering Tax Fraud, SEC Whistleblower Program, Uncategorized, Whistleblower Protection | Comments Off
Thursday, May 19th, 2011
Justice Clarence Thomas wrote the majority opinion holding that Freedom of Information Act request responses constitute “reports,” relators who rely on FOIA request responses can fall prey to the public disclosure bar of the False Claims Act. The Court issued the opinion in Schindler Elevator Corp v. United States ex rel. Kirk on May 16, 2011. Justice Ginsburg filed the dissenting opinion, in which Justices Breyer and Sotomayor joined.
Relator Daniel Kirk, a military veteran, worked for Schindler Elevator from 1978 to 2003. He resigned in September 2003 saying that the company had forced him out. Kirk filed his False Claims action in 2005. In an amended complaint in 2007, Kirk alleged that Schindler has improperly submitted for payment hundreds of false claims to the government because Schindler had certified it was in compliance with VEVRAA reporting requirements. Kirk alleged the certification of compliance was false.
Relator Kirk sought verification that his allegations were correct by asking his wife to ask for Schindler’s reporting information through a FOIA request. Mrs. Kirk made three requests, and DOL responded with information that showed the reports were not filed for several years in question.
Schindler asked the Court to dismiss the case on the ground that the verification information Mrs. Kirk obtained through the FOIA requests was a “public disclosure.” Under the pre-existing public disclosure rules, whistleblower claims could be dismissed if the relator was found to have “based” the allegations on specified types of publically available information. In Schindler, J. Thomas said that a FOIA response = a report = a public disclosure. He left open the question of whether or not Mr. Kirk based his allegations on those FOIA responses.
False Claims actions can be complicated, and the statute requires a whistleblower to be represented by an attorney. For a free consultation on a potential government fraud claim, please call Kenney & McCafferty, P.C. today.
Tags: abuse, clarence thomas, corporate fraud, corruption, False claims, False Claims Act, FCA, FERA, fraud, fraud reward, government fraud, public disclosure, Qui Tam, reward, supreme court whistleblower, tax whistleblower, whistle blower, whistle blowing, whistleblower appeals, whistleblower reward, whistleblowing, wrongful termination
Posted in corporate fraud, False Claims Act, government fraud, Uncategorized, Whistleblower Protection | Comments Off