"Slip and fall injury" or "trip and fall injury" is the generic term for
an injury that occurs when someone slips, trips or falls as a result of
a dangerous or hazardous condition on someone else's property. These
cases fall under the broader category of cases known as "premises
liability" cases. The term "premises liability" refers to a situation
when an individual is injured on a property, or "premises" owned or
maintained by someone else, and the owner or possessor of the property
is held liable for such injury.
"Slip and fall" injuries often result from
slippery conditions caused by water, paint, food or other slick substances on
a walking surface. "Trip and fall" injuries may be caused
by hidden hazards, poor lighting, uneven walkways or
missing handrails.
Slip and fall accidents are covered by the law of negligence, and a key
issue is what duty the property owner had towards the injured person in
terms of protecting him or her from injury. Traditionally, the law
distinguished among four categories of people who might be on someone
else's property:
invitees (for example, a delivery person);
social guests;
licensees (someone who is on the property solely for their own benefit); and
trespassers (for example, a vandal).
The responsibility of the property owner to protect a person from injury
depends on how the person was categorized. In most cases, the injured
party must prove that the premises was in a "dangerous condition" when
the injury occurred, and that the owner of the property knew (or should
have known) of the dangerous condition. To establish this it usually
must be shown that the owner created the condition, knew the condition
existed and negligently failed to correct it, or that the condition
existed for such a length of time that
the owner should have discovered and corrected it prior to the incident.
For a plaintiff to be successful in a slip and fall accident, they must typically prove the following:
there was a condition of the defendant's (landowner) property which
presented an unreasonable risk of harm to persons on the premises;
the defendant knew or should have known that the condition of his property involved an unreasonable risk of harm to persons on the premises;
the defendant should have anticipated that persons on the premises
would not discover or realize the danger, or would fail to protect
themselves against it;
the defendant was negligent;
the plaintiff was actually injured;
the condition of the defendant's property was a direct cause of the injury to the plaintiff.
In addition, a plaintiff may prove negligence by showing that the
property owner violated a relevant statute. For example, a building
owner must ensure that his or her building's structure is in compliance
with applicable building codes.
An injured person who slips and falls due to the negligence of
another may be able to recover the costs of lost income and medical
bills, as well as compensation for any pain and suffering or physical
disability, among other damages. If you have been injured due to a
dangerous condition or negligence on behalf of another party, contact
Brent M. Cordell at www.cordell-law.com or call (713) 248-5265 for a free consultation.
In 1973 America was gripped by the Watergate scandal,
one of the largest and most infamous in the Nation's history. Beginning
with the arrest of five men for breaking and entering into the
Democratic National Committee (DNC) headquarters at the Watergate
complex on June 17, 1972, it would ultimately result in the trials and
convictions of dozens of President Richard Nixon's top administration
officials and the resignation of Nixon himself.
In February 1973 the Senate created the Select Committee on Presidential Campaign Activities (Resolution S.60)
to investigate Watergate and other Nixon campaign abuses, and in May
Special Prosecutor (Archibald Cox) was sworn in by the U.S. Department
of Justice to direct the investigation.
During the course of their work, the Office of the Special Prosecutor
charged several corporations and CEOs with using corporate funds for
illegal political contributions. The U.S. Securities and Exchange Commission
(SEC) soon recognized the significance to public investors, and their
own subsequent inquiry revealed falsifications of corporate financial
records as well as secret “slush funds” being used for illegal foreign
payments and other purposes.
The SEC eventually exposed further corporate abuses ranging from the
outright bribery of high foreign officials to so-called "facilitating
payments" made to government functionaries for certain ministerial or
clerical duties. Major examples included officials of the Lockheed Aerospace Company
paying over $14 million in bribes to various foreign officials in the
process of negotiating the sale of aircraft, and the "Bananagate"
scandal in which Chiquita Brands paid over $2.5 million in bribes
to the President of Honduras to lower taxes on banana exports.
By the culmination of the SEC investigation, over 400 U.S. companies had
admitted making questionable or illegal payments in excess of $300
million to foreign government officials, politicians and political
parties.
Originally the SEC wasn't directly concerned with the legal implications
of bribery: the international business climate of the time had seen
such payments as a necessity in order to remain competitive in a rapidly
growing corporate environment. Rather, the specific concerns of the SEC
were directed at the nondisclosure of such massive payments to
investors; the hidden "slush funds" clearly undermined the integrity and
reliability of corporate books and records, and the very foundation of
the disclosure system established by federal securities laws.
Congress, however, was seriously concerned with the implications these payments had on U.S. foreign policy. The 1975 Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities,
chaired by Senator Frank Church, had been conducting their own
investigation and in a series of hearings that year outlined the
involvement of various government organizations including the FBI and
CIA. And beyond issues of foreign policy, a "post-Watergate morality"
was rapidly coming into play, causing concerns over international
perceptions of the U.S. economic stability and the Nation's position as a
global leader.
Between June 1975 and September 1977 approximately twenty bills were
introduced to address the issue of foreign corporate payments: in March
1976 President Gerald Ford issued a memorandum to various federal
agencies establishing a “Task Force on Questionable Corporate Payments
Abroad”.
Finally, after more than two years of deliberation, Congress passed the
first law in the world governing domestic business conduct with foreign
government officials in foreign markets.
The Foreign Corrupt Practices Act of 1977 (15 U.S.C. §§ 78dd-1)
was signed into law by President Jimmy Carter on December 19, 1977 with
the intended purpose of ending corporate bribery of foreign officials,
and the restoration of public confidence in the American business
system.
It was amended in 1998 by the International Anti-Bribery Act of 1998 to implement the anti-bribery conventions of the Organization for Economic Co-operation and Development.
Actions:
The Foreign Corrupt Practices Act (FCPA) essentially addresses a) accounting transparency requirements under the Securities Exchange Act of 1934 and b) the bribery of foreign officials by persons connected to the United States, including:
U.S. businesses
• Foreign corporations trading securities in the United States
American nationals or citizens
Residents acting in furtherance of a foreign corrupt practice whether or not they are physically present in the United States
Foreign natural and legal persons in the United States at the time of the corrupt conduct
Foreign firms and/or persons who take any act in furtherance of such a corrupt payment while in the United States.
Regarding accounting transparency, 15 U.S.C. § 78m
requires companies with securities listed in the United States to meet
specific accounting practices intended to operate in tandem with the
FCPA anti-bribery provisions. Corporations covered by these provisions
are required to keep books and records that accurately reflect
transactions and to maintain adequate internal accounting controls.
The anti-bribery provisions of the FCPA are not restricted to
monetary exchanges (the focus is on the intent of bribery rather than
the amount), and may include anything of value given to a foreign
official for the purpose of obtaining, retaining or directing business
to any person or company covered by the law.
Specifically, the anti-bribery provisions of the FCPA prohibit:
"...the willful use of the mails or any means of instrumentality of
interstate commerce corruptly in furtherance of any offer, payment,
promise to pay, or authorization of the payment of money or anything of
value to any person, while knowing that all or a portion of such money
or thing of value will be offered, given or promised, directly or
indirectly, to a foreign official to influence the foreign official in
his or her official capacity, induce the foreign official to do or omit
to do an act in violation of his or her lawful duty, or to secure any
improper advantage in order to assist in obtaining or retaining business
for or with, or directing business to, any person."
The definition of "foreign official" is broad; examples may include
doctors at government-owned or managed hospitals or anyone working for a
government managed institution. Employees of international
organizations such as the United Nations are also considered to be
foreign officials under the FCPA.
The Act also governs payments to any recipient if any part of the bribe
is ultimately attributable to a foreign official, candidate, or party.
It does draw a distinction between "bribery" and "facilitation"
payments, which are made to an official to expedite performance of the
duties they are already bound to perform. Payments may also be
legal if they are permitted under the written laws of the host country,
or if they relate to product promotion.
Penalties:
The U.S. Department of Justice is chief enforcement agency for the FICA, with the Securities and Exchange Commission (SEC) acting in a coordinating role. DOJ involvement in an FCPA matter is guided by the Principles of Federal Prosecution in the case of individuals, and the Principles of Federal Prosecution of Business Organizations in the case of companies. Generally, the following circumstances may trigger an FCPA investigation:
Unusually large commissions, retainers or fees
Refusal to make FCPA-related representations
Unusual methods of payments
Promises of business by or from a government official
Family or business relationships with a government official
Payments of unusual contingent fees
Political contributions
Penalties for corporations and other business entities found in
violation of the FCPA may include fines of up to $2 million; individual
directors, officers, stockholders, employees and agents can be subject
to fines of up to $100,000 and imprisonment for up to five years,
although individuals are only subject to the FCPA’s criminal penalties
for violations if they acted “willfully". These fines are imposed per
occurrence, and individuals fined for violations of the Act may not be
indemnified by their employer.
Both companies and individuals can also be held civilly liable for
aiding and abetting FCPA anti-bribery violations if they knowingly or
recklessly provide substantial assistance to a violator. The attorney
general or the SEC may bring a civil action for violation of the FCPA,
resulting in fines of up to $10,000 per violation against any firm, its
directors, officers, employees, agents and stockholders. In addition,
the SEC may seek to impose fines not to exceed (1) the gross amount of
the pecuniary gain to the defendant as a result of the violation, or (2)
an amount of up to $100,000 for individuals and $500,000 for business
entities.
Under federal law, individuals or companies that aid or abet an FCPA
violation are as guilty as if they had directly committed the offense
themselves.
Defense:
The FCPA contains an exception for "facilitating payments" for "routine
governmental action," (also known as "grease" payments) intended as a
defense for payments, gifts or tips made in facilitation of
non-discretionary acts of lower-level officials as long as they have no discretion to award business to the party making the payment.
If a defendant can assert that a payment was legal under the laws of
the foreign country in which the payment was made, or that a payment was
a reasonable expenditure directly related to promotion, demonstration,
or explanation of products or services this may also be used as an
affirmative defense.
Enforcing anti-corruption laws has become a major focus of law
enforcement and regulatory authorities in the U.S. and other nations. Parnham and McWilliams
represents clients in FCPA internal investigations, government
enforcement and regulatory actions, and other international white-collar
defense matters. For more information visit whitecollarfraudattorney.com or call (713) 224-3967 for a free consultation.
On-the-job injuries are always difficult. In addition to the pain,
stress and possible loss of income, the injured employee often has to
communicate with the employer under the cloud of suspicion, anger and
resentment. Many times, the employee feels pressured into receiving care
from the company doctor. Other times, an injured employee may be
hesitant to do anything at all, out of fear of retribution or
termination.
Workers' Compensation provides benefits to workers who are injured on
the job, or suffer an occupational disease arising out of and in the
course of employment. The problem is that the compensation is often not
sufficient to address the extent of the injuries.
In addition, not all employers in Texas subscribe to a workers' compensation
insurance plan. Business that have chosen to "self-insure" and do not
pay compensation are required to prove that 100% of the liability for an
injury lies in the hands of the injured worker, or that the injury was
caused by the negligence of a third party. Even if you may have been
partially responsible for your own accident and injury at work the
insurance defense attorneys will not be allowed to enter your own
negligence into evidence: a jury would only be required to consider any
amount of liability on the part of your employer.
This opens up your
workplace injury case to possible significant compensatory and punitive
damages that workers' compensation insurance benefits might not cover.
Often, those injured
at work will get inadequate compensation through Workers' Compensation
and should look into third-party lawsuits for greater compensation. Third-party lawsuits involve another party (other than the employer).
For example, if you were injured by a saw, there may be a products
liability case against the saw's manufacturer. Also, if a worker was
injured on a construction site, another contractor could be liable.
These cases require immediate attention and expertise because the
responsible third party is often difficult to locate and the evidence
(such as a piece of defective machinery) may need to be preserved. In
more complex cases, the legal principles of Agency and analysis of
corporate law can lead to sophisticated determinations as to who is
technically an "employee" and who the "third parties" are in a given
situation.
When you go to work, you expect that you are reasonably safe as long as
you perform your job in the way you should, taking all reasonable
precautions. This is true even when you are in a somewhat hazardous
occupation. But accidents happen in the workplace as well, and sometimes
the accidents are caused by existing unsafe conditions.
If you were injured on the job, you may be
thinking about whether or not you should file suit. To take action, you
need to be informed about your legal options. For more information contact Brent M. Cordell at www.cordell-law.com or call (713) 248-5265 for a free consultation.
e
Business litigation involving tort
claims can arise in many contexts, ranging from counterclaims in
contract or employment litigation to shareholder rights disputes upon
the departure of a key equity partner, executive, or professional
employee. Tort claims can also figure significantly as an
original claim or counterclaim in litigation related to the purchase or
sale of a business or any other major event in the course of the
operation of your business.
Business torts are civil
wrongs that are committed by or against an organization,
frequently involving harm done to the organization’s intangible assets,
such as its business relationships with clients or its intellectual property.
Misrepresentation is also a common type of business fraud, transpiring when one party intentionally falsifies a
material fact in order to induce another party to perform or refrain
from performing in a certain manner. In order to prove
misrepresentation, the plaintiff must show that he or she relied on the
defendant’s misrepresentation and was harmed as a result. Other types
of business fraud include embezzling company assets, falsifying
financial statements, and forging work hours.
Defective products cause more than 29.5 million injuries and around
22,000 deaths in the United States each year, according to the U.S.
Consumer Product Safety Commission (CPSC).
Any manufactured product can be defective, however all
accidents associated with the product are not necessarily grounds for
personal injury lawsuits.
Products are evaluated by the following agencies:
The CPSC is responsible for approximately 15,000 types of consumer products, from baby strollers to coffee makers.
Department of Transportation handles automobiles and related products.
The FDA covers food, cosmetics, and drugs.
The Department of the Treasury monitors tobacco, alcohol, and firearms
If a product is found to be unreasonably dangerous, the
appropriate agency works with the manufacturer to institute either a
voluntary or mandatory recall.
Examples of Defective Products:
Design defects, ranging from defective harness
systems on child car seats to hair dryers that dangerously overheat,
cause million of injuries annually. These occur in the initial planning
phase, before the product is created. Manufacturers often discover these
defects after products have been distributed for sale and have to
launch a recall. The problem with recalls, however, is that they often
occur too late or product owners may not know of the recall.
Defective Manufacturing results from mistakes or
problems that take place during production, and may affect only a few
items out of many properly working products. Like products with design
defects, products with manufacturing def ects are frequently recalled,
albeit too late, in many cases.
Inadequate Testing is a common issue in safety
testing. Many corporations test crashworthiness, safety belt
effectiveness and other elements at only 40 miles per hour and only in
front-end crashes, rendering these tests inconclusive. Other examples
include silicone breast implants (long-term effects were not yet known
at the time of FDA-approval), faulty electrical wiring, or inefficient
child restraint systems.
Marketing Misrepresentation can include everything from confusing instructions to incomplete warning labels, such as those on prescription drugs.
For more information on defective product liability visit our website at www.harmful-products.com
Tax fraud (or tax evasion) is the general term for
efforts by individuals, firms, trusts and other entities to evade
taxes by illegal means. Tax evasion usually entails taxpayers
deliberately misrepresenting or concealing the true state of their
affairs to the tax authorities to reduce their tax liability, and
includes, in particular, dishonest tax reporting (such as declaring
less income, profits or gains than actually earned; or overstating
deductions).
In the United States "tax evasion" is evading the assessment or payment of a tax that is already legally owed at the time of the criminal conduct.
Tax evasion is criminal, and has no effect on the amount of tax
actually owed, although it may give rise to substantial monetary
penalties.
In the case of U.S. Federal income taxes, civil penalties for willful
failure to timely file returns and willful failure to timely pay taxes
are based on the amount of tax due; thus, if no tax is owed, no
penalties are due. The civil penalty for willful failure to timely
file a return is generally equal to 5.0% of the amount of tax
"required to be shown on the return per month, up to a maximum of
25%. By contrast, the civil penalty for willful failure to timely
pay the tax actually "shown on the return" is generally equal to
0.5% of such tax due per month, up to a maximum of 25%. The two
penalties are computed together in a relatively complex algorithm,
and computing the actual penalties due is somewhat challenging.
Bank fraud is a federal criminal offense that involves any scheme to
obtain money, assets or other property that is owned or in the control
of a financial institution by fraudulent means. Defrauding any
institution insured by the federal government is an offense which is
taken very seriously.
One of the most common frauds against financial institution involves
loan or mortgage applications. During the last decade many
representatives of bank
and mortgage companies are reported to have surreptitiously encouraged
individuals and
businesses to misrepresent their income or other information on mortgage
applications: if these borrowers don't make their payments the bank's
financial departments will look for misrepresentations and if they find
anything they will often
turn the case over to the feds for prosecution. In essence, the banks
and mortgage lenders are trying to use the government to collect on bad
loans they encouraged people to take in the first place.
Bank fraud is also sometimes perpetrated an employee; this constitutes embezzlement, in
which a person entrusted with funds or bank property appropriates it for
his or her own use or benefit. For example, a bank employee may borrow funds during a
personal emergency and then attempt to replace the missing funds
undetected, a move that seldom works.
If you have been accused of bank fraud, your defense depends largely
on pre-trial research, the defense strategies employed by your attorney
and the motivations of the prosecution. While banks may be eager to press charges in these cases, they are generally more
interested in recovering the missing funds. In many cases it may be
possible to reach a financial settlement that can minimize or avoid
entirely prison time.
Insider trading is the trading of a public company's stock or
other securities (such as bonds or stock options) by individuals with
access to non-public information about the company. "Corporate
insiders" are defined as a company's officers, directors or
any beneficial owners of more than 10% of a class of the company's
equity securities. By accepting employment these insiders have
undertaken the legal obligation to put the shareholders' interests
before their own in
matters related to the corporation. This means that any trades in the
company's own stock made by these insiders, if based on material non-public information, are
considered fraudulent since the insiders are violating the
fiduciary duty that they owe to the shareholders.
In addition, this duty may be
imputed; for example, when a
corporate insider "tips" a friend about non-public information likely to
have an effect on the company's share price, the duty that insider owes
the company may now be imputed to their friend. When allegations of a
potential inside deal occur, all parties that may have been involved are
at risk of being found guilty.
The Securities and Exchange Commission prosecutes over 50 cases of
Insider Trading each year, with many being settled administratively out
of court. The SEC and several stock exchanges
actively monitor trading and can refer serious
matters to the U.S. Attorney's Office for further investigation and
prosecution.
US insider trading prohibitions are based on English and American common
law prohibitions against fraud: as early as 1909 the United States Supreme Court ruled that a
corporate director who bought company stock knowing it was
about to jump in price committed fraud by not disclosing
his inside information. The Securities Exchange Act of 1934
was enacted after the stock market crash of 1929 to prohibit
short-swing profits (from any purchases and sales within any six-month
period) made by corporate directors, officers, or stockholders and to
prohibit fraud related to securities trading. The Insider Trading
Sanctions Act of 1984 and the Insider Trading and Securities Fraud
Enforcement Act of 1988 provide for penalties as high as three times the
profit gained or the loss avoided from the illegal trading.
While conducting research on ecological issues in the early 1970's,
author and activist Ralph Nader coined the term "whistleblower" for
citizens who expose misconduct occurring within an organization. Prior
to that the press had used terms such as "informers" or "snitches",
which carried obviously negative connotations. Attitudes towards
whistleblowers still vary widely; they may be seen either as selfless
martyrs for public interest, or as traitors solely pursuing personal
glory and fame. Nonetheless, whistleblowers perform a vital role in
helping the government maintain public safety, corporate transparency
and financial regulation.
Most whistleblowers are internal whistleblowers, employees who report
misconduct by a fellow employee or superior within their company.
External whistleblowers report misconduct to outside persons or entities
such as attorneys, the media, law enforcement agencies or specific
watchdog groups.
In some cases whistleblowers have been subjected to criminal prosecution
in reprisal for reporting wrongdoing; because of these repercussions
faced from the organizations or groups they have accused, specific laws
have been enacted to protect whistleblowers acting in the interest of
the government or public. Private organizations such as the National Whistleblowers Center have also formed legal defense funds and support groups to assist whistleblowers.
The False Claims Act:
The False Claims Act (31 USC § 3729) is the foundation of the U.S.
whistleblower system. It is the most widely used statute employed by
whistleblowers to report on corporate fraud and misconduct, and the
model for other federal and state whistleblower provisions.
In the midst of the American Civil War, the Union Army found itself
facing a horde of unscrupulous contractors passing off rancid food,
ailing livestock and defective weapons. Recognizing that the embattled
government lacked the capabilities to control the widespread fraud on
its own, Congress passed the first US law adopted specifically to
protect whistleblowers, the False Claims Act (also known as the "Lincoln
Law") on March 2, 1863.
This law establishes liability when any person or entity improperly
receives payments from -or avoids payment to- the Federal government
(tax fraud is excepted). Importantly, it revived the thirteenth-century
English legal tradition of qui tam (derived from a Latin
phrase meaning "he who sues on the King's behalf as well as his own");
allowing a private citizen (known as a "relator") to not only bring a
lawsuit on the government's behalf, but also to be rewarded with a
percentage of any proceeds recovered by the government. The False Claims Act prohibits:
Knowingly presenting, or causing to be presented a false claim for payment or approval;
Knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim;
• Conspiring to commit any violation of the False Claims Act;
Falsely certifying the type or amount of property to be used by the Government;
Certifying receipt of property on a document without completely knowing that the information is true;
Knowingly buying Government property from an unauthorized officer of the Government, and;
Knowingly making, using, or causing to be made or used a false
record to avoid, or decrease an obligation to pay or transmit property
to the Government.
The most commonly used provisions are the first two, prohibiting the
presentation of false claims to the government and the fabrication of
records to get a false claim paid: these cases frequently involve
situations in which a corporation or individual overcharges the federal
government for goods or services. Other typical cases entail failure to
test a product as required by government specifications, or selling
defective products. The key factor in determining whether conduct is
covered by the False Claims Act is whether that conduct caused the
government to suffer a financial loss.
The False Claims Act was amended in 1943, (most notably to reduce the
relator's share of recovered proceeds) but its qui tam provisions were
largely ignored until an increase in military spending during the Reagan
presidency.
Amid widespread reports of $1,000 bolts, $7,000 coffee pots and other
outrageous abuses by government contractors, the law was amended in 1986
to impose fines of up to $10,000 for each false claim. The amendment
also tripled damages on wrongdoers, rewards whistleblowers with up to 30
percent of the government's recovery, and includes significant
anti-retaliation protections for employees who blow the whistle.
Yet despite being the primary tool used by the government and
whistleblowers to combat fraud, the False Claims Act is limited in
scope: primarily, it only applies when the fraud or misconduct has caused the government to lose money. Other congressional Acts which have been passed to strengthen protection for federal whistleblowers include the Lloyd–La Follette Act (5 U.S.C. § 7211)
of 1912 which confers job protection rights on federal employees who
criticize their superiors, and similar protections included in
subsequent federal environmental, health and safety laws.
The Sarbanes–Oxley Act (Pub.L.107–204,116,Stat.745),
also known as SOX, was enacted in 2002 in reaction to a number of major
corporate and accounting scandals and Section 1107 provides criminal
penalties for retaliation against whistleblowers. Until recently however
there was no real financial incentive or legal protection available to
encourage whistleblowers to expose other types of fraud; i.e., frauds
such as those perpetrated against private investors.
The Dodd-Frank Act:
The Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111–203, H.R. 4173)
was signed into law by President Barack Obama on July 21, 2010 as a
response to the late-2000s recession, implementing the most significant
changes to U.S. financial regulation since the Great Depression. This
Act made changes in the American financial regulatory environment that
affect all federal financial regulatory agencies along with virtually
every part of the nation's financial services industry.
Dodd-Frank proposed eight areas of regulation, primarily:
Regulation of credit cards, loans and mortgages is consolidated under The Consumer Financial Protection Bureau.
Establishment of the Financial Stability Oversight Council to oversee Wall Street.
Establishment of the Volcker Rule banning banks from using or owning hedge funds for the banks' own profit.
Requiring that the riskiest derivatives, like credit default swaps,
be regulated by the Securities Exchange Commission (SEC) or the
Commodity Futures Trading Commission (CFTC).
Requiring hedge funds to register with the SEC and provide data
about their trades and portfolios so the SEC can assess overall market
risk.
Creation of an Office of Credit Ratings at the SEC to regulate credit ratings agencies.
Creation of a new Federal Insurance Office under the Treasury
Department, which identifies insurance companies that create risk to the
entire system.
Allowing the Government Accountability Office(GAO) to audit the Fed's emergency loans during the financial crisis.
The Dodd-Frank Act also includes important whistleblower provisions in section 922,
largely modeled after the False Claims Act; however, a compelling
difference between the False Claims Act and the Dodd-Frank whistleblower
provisions is that Dodd-Frank does not require the fraudulent activity be committed against the government.
In fact, although the False Claims Act allows whistleblowers to pursue a
qui tam action even if the government chooses not to intervene,
Dodd-Frank does not supply whistleblowers with the “private right of
action” required to bring a lawsuit on behalf of the United States
government. If the government opts not to pursue a case under the
Dodd-Frank Act, the whistleblower’s claim is terminated.
Whistleblowers are required to provide information that is not
publicly known, but Dodd-Frank also rewards SEC whistleblowers who
provide unique analysis based completely on public information. For
example, if fraud can be demonstrated using public statistics or
information a citizen can qualify to become a whistleblower. In further
contrast to the False Claims Act, which only rewards the first
whistleblower filing a complaint, whistleblowers who provide
meaningful information assisting the government in combating securities
fraud under Dodd-Frank may be rewarded regardless of whether they were
the first to file.
Dodd-Frank whistleblowers do not file formal complaints in a federal
court, but within the appropriate agency. For example, securities
violations are filed with the SEC and commodities violations are filed
with the CFTC.
The Dodd-Frank whistleblower provisions also take important steps to
protect citizens who report securities fraud with an anti-retaliation
provision which prohibits “... adverse action against a whistleblower
arising out of disclosures protected under Sarbanes-Oxley; the
Securities Exchange Act of 1934; and any other law, rule, or regulation
subject to the jurisdiction of the SEC.”
Filing a whistleblower claim:
Common examples of fraud or misconduct that may be targeted by a whistleblower claim may include:
Billing the government for products or services not provided, or
that are defective, mislabeled or otherwise different from the products
or services the government contracted.
Failing to report government over-payments.
Obtaining government funds using false certifications of compliance or through violations of law.
Selling or marketing drugs outside of the FDA approved uses.
Accounting fraud
Fraud or manipulation of trading in securities or commodities, or the improper sale of securities, bonds, or commodities.
In order to file any whistleblower claim you must have evidence of fraud
or other misconduct that directly causes a financial loss to the
government (under the False Claims Act and related statutes), a
financial loss to investors from securities or commodities fraud (under
the Dodd-Frank Act), or harm to specific employees or the public at
large (under various other laws designed to protect the environment,
financial markets, health and safety and consumer welfare).
While a whistleblower does not need to have witnessed the case of
fraud or misconduct personally, they must have concrete and specific
evidence: suspicions or beliefs are not sufficient. Documentation
supporting a claim greatly increases the likelihood that authorities
will take it seriously. In some cases public information may be used to
support a whistleblower claim, but it must be information that the
government does not already possess and could not otherwise obtain from
any public source or its own records.
Time is an essential factor in filing a whistleblower claim. The "first
to file" rule will preclude any claim if one has already been filed
based on the same facts, but multiple whistleblowers may file a joint
claim or separate claims based on different evidence. The claim must
also be brought within the statute of limitations: generally within six
years of the violation under the False Claims Act and within three years
of the violation under the Dodd-Frank Act. For violations of the
various state FCA and industry specific laws, claims usually must be
reported anywhere from 30 days to 6 years after the violations depending
on the particular statutes.
While the Sarbanes-Oxley Act of 2002 enacted post-Enron reforms, accounting fraud is still rampant
in both public and private operations alike. In 2010 the executives at Lehman Bros. were accused of fraud, and
the actions of Ponzi schemer Bernard Madoff were widely publicized.
Healthcare South shareholders plan to finalize a settlement agreement in
July 2010 against accounting firm Ernst & Young
and Swiss bank, UBS AG, seeking restitution for their part in a
multi-billion dollar accounting fraud scandal.
Allegations of accounting fraud may cause serious damage to the
reputation of any corporation or business. The majority of accounting
fraud investigations stem from
authorities pursuing a case where there is suspicion of corporate fraud
and there are signs indicating
that evidence of falsified statements, documents, and or transactions
exist. In many cases, federal prosecutors and investigators are
involved when someone is suspected of accounting fraud. In these cases
the federal prosecution often casts a wide net, bringing charges against
persons who may not have had any prior knowledge of the deception.
The accounting practices of smaller businesses in regulated
industries are also scrutinized in a manner once reserved for public
companies. What were once viewed as honest, innocent accounting errors
can be lumped into an overly aggressive investigation by prosecutors and
regulators and pursued as a potential violation of the criminal law.
These sorts of investigations often turn upon very specific and
technical accounting practices and decisions. If you are under
investigation for allegations of deceptive accounting methods it is
important to hire a white collar criminal defense attorney who
is experienced in these complex cases.