As one of California’s leading whistle blower law firms, we are constantly asked by our potential clients, (who, lets assume, hve reported their company for fraud to the government) whether its worth the trouble to file a lawsuit for wrongful termination or other retaliation. A recent article in the Wall Street Journal is very instructive in this regard.
‘According to the WSJ,the US Department of JusticeUS Department of Justice has not prosecuted individuals in a number of cases.In fact, in over 75% of the 125 cases in which public companies were charged and convicted, no employees were named or indicted. In one “deferred prosecution” agreement with HSBC Holdings PLC, a settlement of $1.92 Billion based on allegations of failing to fight money laundering and allowing drug proceeds to flow into the US. In another case involving Barclays PLC no executives were charged for alleging hiding the source of funds coming into the US. A settlement of $298 million was approved in that case.
There are a number of reasons why whistle blowers are prosecuted at a low rate. First, it’s not always easy to tell who the wrong doer was. Just because a whistle blower steps forward and advises the government of the activity, the lines between “messenger” and decision-maker are not always clear. Secondly, it appears that the government’s resources–placed on the corporate wrongdoing entity–will be more effective in stopping systemic fraud than going after just one person.Thirdly, many false claims and criminal cases settle with “deferred prosecution” agreements. Under these arrangements, the corporation admits to what happened, pay a fine (sometimes in the Billions) and set up better controls. We are aware of court-appointed monitors being appointed, usually for up to five years..
Working with a knowledgeable law firm is critical from the earliest stages of whistle blowing, if for no other reason than to minimize any criminal exposure and at the same time be the “original source” of the financial fraud which resulted in violations of criminal law or unjust enrichment of your employer. Many times, an employee simply needs to know if the corporation will claim that the whistle blower was acting on their own. Danz & Associates can help resolve numerous questions in this area, drawing on our experience in health care, aerospace and other industries.