This year’s Symposium will be available either in-person or online on Wednesday, March 13, starting at 815 am EDT.  It offers 7.5 CLE hours, including 1 Ethics hour and 4 Trial Practice hours. Cost is $279.  

You can register (and see the full Agenda) here: atlantabar.org/….   Topics include: 

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Turning to IRS violations, this WSJ article addresses in part why, “[o]n its 2007 return, Ensign Peak put down ‘1,000,000’ for its total assets. The real number was about $38 billion, an Ensign Peak document shows.”

To quote the Journal:

The post Wall Street Journal Begins Examining IRS Violations Exposed by Mormon Whistleblower Regarding Ensign Peak Advisors, Inc. appeared first on Whistleblower Lawyer Blog.

Mormon blows whistle on church’s alleged “clandestine hedge fund”

(https://www.cbsnews.com/60-minutes/ ):

The post On 60 Minutes, LDS Church admits “bailout” of for-profit business by Ensign Peak – which shows Ensign Peak cannot be tax-exempt. appeared first on Whistleblower Lawyer Blog.

On Sunday, May 14, 60 Minutes featured an interview with our IRS and SEC whistleblower client David Nielsen.

My colleague Richard Rubin and I are proud to represent this principled whistleblower.

#cbs #60minutes #whistleblower #finchmccranie #secwhistleblower #irswhistleblower #ensignpeak

The post 60 Minutes Interviews Our IRS & SEC Whistleblower Client David Nielsen: “Mormon Blows Whistle on Church’s Alleged ‘Clandestine Hedge Fund'” appeared first on Whistleblower Lawyer Blog.

• The SEC Whistleblower Reform Act of 2023, co-sponsored by Sens. Grassley, Warren, Collins, Warnock, and Mastro, removes some predictable roadblocks to an effective SEC Whistleblower program.  To summarize from Sen. Grassley’s release, the Act would:
  1. Protect whistleblowers from retaliation if they report violations only in the workplace.  Currently, whistleblowers are protected only once they report misconduct directly to the SEC or certain other officials.

The post Amid Bank Bailouts, SEC Whistleblower Improvements Urged by Senators Grassley & Warren appeared first on Whistleblower Lawyer Blog.

Whistleblowers are critical to the SEC’s efforts to stop COVID-19 fraud.  The SEC Office of the Whistleblower is authorized to pay monetary awards to whistleblowers whose information leads to an order of sanctions of $1 million or more.

Our firm’s lawyers are uniquely suited to bring attention to meritorious SEC whistleblower claims.  Our firm has the only former Senior Officer and Regional Director of the SEC who represents SEC whistleblowers, Walter Jospin.  We have the ability and experience to evaluate a potential Whistleblower claim and determine if it will interest the SEC Division of Enforcement.  If it does not, the case is lost.  Few lawyers have that experience.

The post SEC Targets COVID-19 Fraud, and Its Success Will Depend on SEC Whistleblowers appeared first on Whistleblower Lawyer Blog.

Joining us on the panel were the Department of Justice’s Renee Brooker, an Assistant Director in the Civil Division with 25 years of DOJ experience; James J. (Jim) Breen, an accomplished qui tam lawyer whose cases have recovered almost $4 billion for federal and state taxpayers; and Neil Getnick, Chairman of TAF and an accomplished FCA lawyer in his own right.

Larry provided his observations about the importance of meaningful compliance programs to prevent and detect fraud within organizations.  He continues to share his perspective gained from years of government service, private practice, and as general counsel to a major corporation, with in-house counsel who contact him for advice.

The post “The False Claims Act at 30”–What the Future Holds for Qui Tam Whistleblower Cases appeared first on Whistleblower Lawyer Blog.

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If DOJ means what it says, this policy change is profound. It should hit corporate officers whose business models are based on fraud and false claims. It should also snare high level executives who turn a blind eye to wrongdoing, and who typically get away with it.

Corporations can act only through the humans who run them. Sometimes those humans steer the business to corrupt methods.

Until yesterday’s change in DOJ policy, however, the few corporations brought to heel by DOJ for crimes, fraud, or false claims absorbed the consequences, while the individuals who directed the wrongdoing usually escaped responsibility. Those individuals were free to continue their corrupt practices at the same firm or a different one.

New U.S. Deputy Attorney General Sally Yates plans to change that result. As a federal prosecutor in Atlanta, Yates was not afraid of pursuing big cases against individuals and their companies, as I learned from representing clients in some of those cases.

Yesterday Yates issued a Memorandum titled, “Individual Accountability for Corporate Wrongdoing.” It is far-reaching, if implemented. Yates announced “six key steps to strengthen [DOJ’s] pursuit of individual corporate wrongdoing, some of which reflect policy shifts and each of which is described in greater detail below:

(1) in order to qualify for any cooperation credit, corporations must provide to the Department all relevant facts relating to the individuals responsible for the misconduct;

(2) criminal and civil corporate investigations should focus on individuals from the inception of the investigation;

(3) criminal and civil attorneys handling corporate investigations should be in routine communication with one another;

( 4) absent extraordinary circumstances or approved departmental policy, the Department will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation;

(5) Department attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases, and should memorialize any declinations as to individuals in such cases; and

(6) civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.”

The new policy expressly applies to cases under the False Claims Act–the nation’s major whistleblower law and chief civil enforcement weapon to fight fraud that targets taxpayer funds. Whistleblowers are the source of most False Claims Act cases by filing suit under the “qui tam” provisions of the law.

In our qui tam whistleblower cases, we name as defendants both individuals and their businesses when we have evidence of the individuals’ involvement and knowledge of the fraud. With smaller corporate defendants, those individuals are sometimes obvious. Joining the individuals as defendants can prevent the wrongdoers from escaping liability simply by shuttering the business.

But with large companies, it is often difficult to identify at the outset all or even some of those culpable individuals. The case begins against the corporation only–and typically ends with a settlement by only the company. Until this policy change, the guilty individuals usually could count on being released from liability with the company’s settlement. And while the government technically could seek to exclude or debar the blameworthy individuals from federal programs, that has been a rare occurrence.

Now, government lawyers are tasked with focusing on individuals’ liability from the start. Yates’s memo directs that “[c]ivil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.” As the case progresses through discovery, the government learns who those guilty individuals are, and properly can add them as defendants.

Yates correctly observes that deterring fraud is important, and that holding individual wrongdoers accountable aids deterrence:

“Although in the short term certain cases against individuals may not provide as robust a monetary return on the Department’s investment, pursuing individual actions in civil corporate matters will result in significant long-term deterrence. Only by seeking to hold individuals accountable in view of all of the factors above can the Department ensure that it is doing everything in its power to minimize corporate fraud, and, over the course of time, minimize losses to the public fisc through fraud.”

Of course, Yates is directing a huge organization of lawyers who are used to doing cases the old way. It remains to be seen how quickly they will implement the new policy.

DOJ’s new policy is a step in right direction for deterring wrongdoing. Corporations violate the law only when individuals direct them to do so. It is past time to hold those individuals accountable.

The post Justice Department’s New Focus on Individuals’ Liability in “Yates Memo” Should Impact Qui Tam Whistleblower Cases under False Claims Act appeared first on Whistleblower Lawyer Blog.

Intimidating witnesses from reporting fraud is a form of obstruction of justice.

Although “confidentiality” agreements may appear innocent on their face, a company’s suggesting in any way that its employees refrain from reporting fraud or other violations of securities laws crosses the line. Too often, that is often the effect of these agreements–if not the intent as well.

The SEC took action last month in filing and settling charges against KBR Inc. It announced this “first enforcement action against a company for using improperly restrictive language in confidentiality agreements with the potential to stifle the whistleblowing process.”

The SEC said that, in internal investigations, KBR required witnesses to sign confidentiality statements warning that they could face discipline and be fired if they discussed the matters with outside parties without the prior approval of KBR’s legal department. The SEC found that KBR violated SEC Rule 21F-17, which bars firms from impeding whistleblowers from reporting possible securities violations to the SEC.

As Mr. McKessy observed, “KBR changed its agreements to make clear that its current and former employees will not have to fear termination or retribution or seek approval from company lawyers before contacting us.” He warned that “[o]ther employers should similarly review and amend existing and historical agreements that in word or effect stop their employees from reporting potential violations to the SEC.”

Bloomberg BNA contacted me recently to comment on the prevalence of such misuse of confidentiality agreements, in a piece reprinted here in part:

“More and more we see firms attempt to conceal fraud by using ‘confidentiality agreements’ to intimidate witnesses from reporting wrongdoing to authorities,” said Michael Sullivan, a partner at Finch McCranie LLP, Atlanta, who represents SEC whistle-blowers.

“This witness intimidation should be regarded as a separate crime,” Sullivan, a former federal prosecutor, told Bloomberg BNA. “The public’s interest is in protecting investors by exposing fraud, and wise judges refuse to enforce these agreements.”

Congratulations to my colleague Jordan Thomas and his firm Labaton & Sucharow for their fine work on a study of the use of these confidentiality agreement, as discussed in the Bloomberg/BNA article quoted above.

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