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Whistleblower actions have been around forever
Whistleblower lawsuits have been around for centuries. Their impact is still significant.
Another term for a whistleblower lawsuit is “qui tam,” and this form of legal action has actually been around for centuries. That certainly says something about mankind’s avarice and the drive to get money from the government in a fraudulent manner. Actually, the lawsuits of centuries ago were a way for citizens to shield their government from fraud. Over the passing years, things have obviously evolved and in America, the False Claims Act came into being to nip abuse in the bud that was being committed by defense contractors, health care providers and financial institutions.
Unfortunately, fraud is on the rise, given the sorry state of the economy. While this isn’t good news, it has made the federal government sit up and take notice of what is going on, finally realizing that they are and have been the victim of some significant fraudulent schemes that have netted others millions of dollars – ultimately at the taxpayer’s expense.
In self defense and also to stem the flood of dollars illegally making its way into the pockets of others, the government took action to protect tax dollars and to take control of the economy; trying to regulate it so it was not all over the map. Yes, there is such a thing as a free market, but those who were taking that phrase literally had to be stopped. This is where rules and regulatory powers must be brought into effect to keep the market a place to trade fairly and to keep it legitimate.
In the course of tracking how much money they had lost over the years, and the figures showed a staggering amount in the millions, the federal government brought in the Fraud Enforcement and Recovery Act (2009). It wasn’t much of a surprise that it passed with virtually no resistance or nay-saying. Shortly after that, the Fraud Enforcement and Recovery Act (FERA) also came into existence. The idea behind FERA was that, with enough pointed and clearly defined legal definitions (and money to support this), it could overhaul or reform fraud.
Under this legislation, budgets were boosted and made a great deal larger for those departments responsible for finding and prosecuting fraud. Sort of like putting their money where their mouth is; by decrying fraud and actively seeking to stop it, the only way the government could accomplish this was to increase the budget for enforcement departments and personnel. The departments that search for and act on fraud cases are the Securities and Exchange Commission, the Department of Housing and Urban Development and the Department of Justice.
Where the legal redefinition came into play was with the False Claims Act. It is noted to have a long history with the courts, but many of the definitions in it were out of sync with what Congress perceived was the intent of the law. This made it far less complex for whistleblowers to file suits and meant less of a need for as much evidence to prove a defendant was guilty of defrauding the federal government.
If you happen to be in a situation where you have knowledge and/or evidence of a company knowingly defrauding the federal government, speak to an experienced qui tam lawyer and find out how the law affects you today.
Ty Gomez writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.
E-mail retention is an issue in many companies
The Sarbanes-Oxley Act passed four years ago. Many think the law is working, but aren’t sure how it affects e-mails.
It was President George W. Bush that brought the Sarbanes-Oxley Act into being, with the intention to boost accounting oversight and corporate responsibility. The main thrust of the act was to increase accounting and auditor regulations, augment disclosure requirements, generate new federal laws and jack up the penalties under existing federal law. In other words, the whole idea was to make larger companies get their bookkeeping in order.
One of the most important facets of this act centers on the details relating to data security, protection and retention. Data these days refers to many things, but it also includes e-mail. The question quickly grew to ask how the Sarbanes-Oxley Act affects e-mail retention policies in a workplace. Here is some interesting information that not many people are aware of relating to business documents in today’s electronic workplace. If you aren’t clear on any of the regulations in this act, invest time with a Dallas business lawyer to get answers.
Just about 93 percent of all material (business documents) is created electronically. Since that’s the case, many companies are now facing the looming question of what on earth do they do about e-mail retention questions. E-mail and its retention has now become a top priority issue that can’t be ignored. The bottom line is that companies need to develop off-site storage. For example, an online service that stores encrypted data and protects it.
In referring to the Sarbanes-Oxley Act, you’ll find it mentions three stipulations dealing with e-documents, which includes e-mails. They deal with destruction/alteration, obstruction of justice and mandatory document retention. Very simply, when dealing with destruction/alteration, the act says that those who knowingly alter, conceal, falsify, mutilate or destroy any document (paper/electronic) because they want to obstruct any proceedings involving a federal agency may face up to 20 years in jail, be fined or both.
If a company has an e-mail retention policy, then it must also include a security plan. Along those same lines, the company must allow only certain people clearance to access archived e-mails, generate a report with that individual’s name when he or she accesses the secure information and write down any changes to existing documents. The act goes even further and mandates that a company keep records, such as e-mails, for up to five years. The e-mails are to be classified by date, month and year to allow auditors to quickly access pertinent information.
These are provisions that are crucial to the operation of your company, and in order to ensure you are in compliance with the Sarbanes-Oxley Act, you will want to discuss your various issues and questions with an experienced Dallas business lawyer.
Ty Gomez writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.
Double Collecting Is Consumer Fraud
Buying a car even if you haggle down the price will still cost you more than it should with this scam.
Ever bought a car and thought you got a really great deal – until you added up the costs later? Beware of a very common scam car dealerships use to make extra cash from their customers; often as much as between $500 to $2,500. The amount you pay out toward the scam is largely dependent on what you are willing to spend. The really annoying and underhanded part of this consumer fraud scheme is that the money you get asked for later is money the dealerships recover from the factory. Put another way, you are being overcharged for something the dealership ultimately gets back.
Here is how this scheme works. You have haggled the price of your car down to what you are willing to pay. So far, so good. Then, you get hit with the line that the dealership is trying to recover their losses when they discount the manufacturer’s suggested retail price (MSRP). So, they attempt to tack that on to the price you have already agreed to pay. Many people do pay the extra $500 (or more) in something called “pre-delivery service fees.” This is a scam, because it’s these fees that the dealership can recover from the factory later.
Here is what the “prep” fees are supposed to cover: taking the plastic off the seats (not a terribly hard endeavor), double checking fluid levels, taking a vacuum cleaner to the interior and washing and waxing the exterior. All in all, that may take about 2 hours or so. If the dealer tells you that you have to pay for it, stick to your guns and say no, because this service is already included in the MSRP. If you “do” pay for it, the dealership has just pulled off the double collecting scam.
Surprisingly enough, this practice is fairly widespread, largely because consumers are not that well informed about how to buy a car and what fees are involved. What happens if your refuse to pay the prep fee? The best way to handle this situation is to just tell the dealership to credit you the amount of the prep fees on your contract. Many dealers will refuse, and that’s fine, as your next move is to walk out. You won’t be losing anything at that point.
Is this double collecting scam legal? Unfortunately, yes, it is legal for a car dealer to pad the prep fees on your final bill. However, if you “know” before you go that the prep fees are already included in the MSRP, you can save yourself anywhere from $500 to $2,500. If you have been a victim of this scam, report them to the Better Business Bureau and get the complaint on record. You may save someone else the hassle of being double billed for no good reason other than greed.
Ty Gomez writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.
Escrow Closing Fee Kickback Frauds Common
If you’re buying a home, make sure you are well informed about closing fees to avoid fraud.
For those of you who are considering buying a home, there are a lot of expenses involved and you need to know about them so you don’t get any nasty surprises later. Unfortunately, there is something else you should know as well and that is about closing fees kickback fraud. This is far more common than you might think, so make sure you are well informed about every financial detail you need to deal with during closing. If you have questions, then contact a Dallas business lawyer.
While federal investigators have put a crimp in several underhanded closing fees kickback rings, these scams/frauds are still rampant in the industry. Unfortunately, kickback fees are really simple for a less than honest real estate agent to pull over on an unsuspecting buyer. Try and avoid situations like that by being an informed buyer.
One way to pull off closing fee kickback fraud is to have a real estate agent set up a corporation that buys an interest in an escrow and title insurance company. Then, a group of rip-off artist home builders set up the same type of corporation and also have an interest in the escrow company. What happens next is the real estate agent and the home builders then refer their clients to their “own” title companies. The title company then pays a finder’s fee/kickback from a percentage of the title and settlement fees to the agent and builder. Slick as heck, not to mention unethical, immoral and illegal.
Padding closing fees is another area you need to be careful of when buying a house as well. Title companies, once they’ve already pulled off their kickback scheme, also tend to seriously pad closing fees. This type of fraud has the full attention of the Department of Housing and Urban Development (HUD). In fact, the department actually has a unit dedicated to real estate settlement oversight – a polite way to say scam/fraud.
Be on the lookout for failure to reveal the true settlement costs, if you get told at all. You need a HUD-1 before closing. If you don’t get it, watch out. You also need to be cautious about companies underestimating settlement costs. They could be doing this intentionally to deceive you. This is like bait and switch at some huge retail shops; you get attracted by a low upfront price which suddenly escalates once you are a customer.
There are many other things you need to be aware of when buying a house, including jacked up fees and kickbacks to the lender. When in doubt about what is going on during your house closing, contact a Dallas business lawyer. Not only will they be able to tune you in, but explain what you need to do to avoid being scammed.
Ty Gomez writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.
Blowing the Whistle Loudly for Unsafe Working Conditions
Those who speak out about unsafe conditions in a workplace or other things are called whistleblowers.
Most often people associate the term whistleblower with someone who “rats” out someone else for not doing the right thing. While in general that is about what it amounts to, it is far more important than that and whistleblowers serve a very important function in today’s society. They are bellwethers of a company’s actions, an indicator that all is not well in corporate land.
Thanks to whistleblowers and whistleblower legislation, workers may report inappropriate or unsafe work conditions to authorities – and may “not” be punished for doing so. This takes a whole lot of guts to pull off, and at one time there wasn’t much protection for people who were brave enough to stand up for what is right. Over the years, the federal government realized they needed legislation to protect the rights of those who spoke up and out about wrongdoing.
What are some of the more common reasons an employee would take their employer to the authorities? There are a fairly wide variety of reasons, but most commonly, attorneys who do this type of work tend to see employees blowing the whistle on unhealthy or unsafe work conditions, illegally using federal funding or illegal activity, and negligent behavior.
When someone takes the chance to stand up and speak out against wrongdoing, the federal government would be remiss if they didn’t offer those individuals some protection. Those who do speak up are going to ultimately benefit the federal government by usually recovering a significant amount of money for them – or rather on their behalf.
If you happen to be in a sticky situation at work and want to do something about it, but aren’t sure what kinds of protections may apply to you, check out the Occupational Safety and Health Act, the Federal False Claims Act, the Whistleblowers Act applicable to your state, and the Sarbanes-Oxley Act. If you do proceed to report and get fired or are the target of retaliation, you have the right to sue your employer. To do that you will need to contact a Dallas employment lawyer.
If you are in a situation like this, you will want to talk to an experienced Dallas employment lawyer to find out precisely what your options are and what your rights are under the various acts. You will need someone in your corner to fight this action for you, as it is the law that any actions taken under the Whistleblowers Act must be handled by an attorney.
Seth Wilburn writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.
Shhhhh It’s a (Trade) Secret
Just about every business or industry has its secrets. They also want to keep those secrets from getting out.
When you stop to think about it, it makes sense that most businesses and enterprises have secrets; secrets that protect how they do business, how they make their product, what methods are used and not used, and what inventions they may have. These are the things that they want to hold close to their chest, because if the information got out, they’d be competing against themselves with another company who acquired their information.
Rather than lose their competitive edge, companies with trade secrets make every effort to keep them and have been known to sue people who knowingly sell or accidentally give away critical information about how they do business. This deliberate subterfuge or accidental gaff is a form of unfair competition and those that are doing business in the marketplace are expected to do so fairly – meaning not resort to stealing another’s secrets. If you don’t understand how this works, talk to a seasoned Dallas business lawyer and find out. Better safe than sorry later.
Thankfully there is an Act in place that provides protection against those who get product formulas, techniques, devices, methods and secrets by less than honest means; means which include theft, spying via some form of electronic wizardry, spying by other means (perhaps the old-fashioned way), breach of duty, convincing someone else to breach their duty, misrepresentation, and forking over pots of money to bribe someone for the secret(s). This is where the Uniform Trade Secrets Act comes into play.
The basic kernel of the Act is that if someone profits from ill-gotten information, then unfair competition may exist. Keep in mind that this Act will also mete out punishment if the economic benefit is potential or real; and furthermore, this applies even if the person who stole the secret(s) doesn’t attempt to take advantage of that knowledge.
This is another area of the law that will allow punitive damages, much like some cases in the area of personal injury. For personal injury, punitive damages are awarded for really gross negligence; when dealing with stolen trade secrets, punitive damages may include financial damages, royalties and shared profits. In other words, stealing someone’s secrets is a serious matter and the law doesn’t mess around to make its point when it comes time to own up.
Courts may even grant injunctions to force a company to stop selling an item or service that came about as the result of a stolen secret. These are the things you need to know before you breach an agreement, either on purpose or unwittingly, and any Dallas business lawyer will tell you that right up front on consultation.
Another way that companies work to keep their secrets secret is to ask that workers and contractors sign a confidentiality agreement and spell out in that contract what will happen (including punitive measures) if those secrets are stolen. If a worker breaches the agreement, the company may be able to launch a lawsuit against the person to stop their information from getting out.
When in doubt about what is and what is not a trade secret, or what your agreement says and means, take the time to talk to highly qualified Dallas business lawyer and get the real scoop on what you need to know.
Seth Wilburn writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.
Real Estate Mortgage Fraud
In tough economic times, real estate mortgage fraud generally increases. It’s a good time to buy, but buyer beware.
Generally speaking, most people are honest and play it straight when it comes to dealing with mortgages. However, having said that, there are crooked mortgage brokers, cheating home buyers, dishonest real estate agents and brokers, and less than honest real estate investors. If you have the misfortune to run across one or more of these individuals, you may be in trouble; something you want to avoid.
Right now financing is fairly easy to secure in order to take advantage of some good deals on homes, but buyers need to beware of getting into hot water. If a buyer gets a loan, they can get some super deals right now. However, can they get that loan? It seems some buyers make up the numbers or take other risks to get the money, and while that doesn’t sound like such a big sin, it is mortgage fraud. Other ways you can commit mortgage fraud are to take money out of the bank and pay off a debt, but not tell the lender; buy a vehicle just before the loan closes and say nothing about it and/or get more credit for something/anything and don’t tell anyone.
Other ways that fraud happens is when a buyer makes any kind of an agreement the bank doesn’t know about (called a side agreement); when an adjustment is made at closing and isn’t shown on the HUD-1 settlement statement; or when part of a down payment/closing costs comes from sweat equity.
There are so many things that constitute mortgage fraud, it may surprise you, simply because you didn’t stop to think about things like the fact that you borrowed part of the down payment, you quit or started a new job and said nothing to the bank, or if you don’t actually move into the house after you have certified to the bank you are intending to be an owner/occupant.
Mortgage fraud is really easy to do but not so easy to reverse and the Real Estate Settlement Procedures Act is painfully clear on how a closing is to proceed, even more so with one that is subject to financing. The bottom line is that “any” statement you make to the bank which isn’t the whole truth and nothing but the truth has the potential to be considered fraudulent. This includes changes in your health, racking up high medical bills, or buying that dream car and not mentioning it.
Just as an increase in salary needs to be reported, so does a decrease. This applies on those loans aimed at low income buyers. It’s clear that if the borrower makes more than the limit allowed, he doesn’t get the loan. Even if you get a major hike in salary just before you close, you need to tell the bank that as well.
At each stage of the process of getting a loan and buying a house, there are many opportunities to be dishonest and just as many to get ripped off by someone else. If you have questions about the process, have been ripped off or have been accused of mortgage fraud, you will want to speak to a competent lawyer and find out what your rights are and what you can do.
Seth Wilburn writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.
Qui Tam Fraud
Not many people know what Qui Tam is or what it means. It’s a branch of law that protects the government.
Qui Tam refers to a set of rules that lets people blow the whistle (a.k.a. Whistleblower legislation) on those who try to defraud the government. The fraud committed would violate the False Claims Act and those who do step forward and speak up about the illegal doings of others are often called relators. The plaintiff/relator may then bring a lawsuit on behalf of the US government. It’s important to note that none of this takes place unless the defendant has “knowingly” committed fraudulent acts against the government.
You’d be right if you guessed that cases like this are tough to prove, tough to pursue in the courts and tough on which to collect. However, having said that, for those that choose to stay the course, the rewards are often fairly lucrative, since in the event of a case win, the plaintiff gets to collect a relatively large amount of cash based on the total judgment.
The main benefits of Qui Tam law are that it protects the government when someone has been ripping them off, allows recovery of the ill gotten funds on behalf of the government, and pays quite well in the long run. If people didn’t come forward to report on other individuals who were cheating the government out of millions of dollars, there would be a whole lot of tax money washing away down the drain.
While you might think that the whistleblower would be in a tough spot for ratting someone out, the Qui Tam law protects the relator and makes it illegal to harass, fire, demote or otherwise create problems for the individual. They are also accorded some level of privacy relating to their identity. This law is applicable in all states and in various different forms, and if you are in a situation where you have evidence of fraud against the government, speak to an experienced attorney to find out what the whistleblower legislation says in your state.
Generally speaking, there is a fairly broad range of areas in which Qui Tam actions are filed, and they include Medicare fraud (billing for services not rendered); postal service fraud (faking the weight of parcels to not pay the full amount to the post office for services rendered); student loan fraud (lying to get more federal funds); and customs fraud (lying about the value of items being shipped).
If you have questions about Qui Tam law and how it may affect you if you do file a lawsuit, speak to a skilled attorney who will be able to answer your questions and outline what happens at every stage of the process.
Seth Wilburn writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.
What on Earth Is the Sarbanes Oxley Act?
If you don’t know what this Act does, it’s time your business did some research. Businesses need to be in compliance with this Act.
Many businesses wonder whether or not they need to be aware of or even comply with the Sarbanes-Oxley Act of 2002. There are advocates for it and against it, largely because some people feel it’s a paper chase without teeth, but by and large, it is considered to be one of the most far-reaching securities legislation ever passed.
Its effect in a nutshell, was to have every company that files reports with the Securities and Exchange Commission (SEC) have increased corporate responsibilities and obligation when it came to dealing with money. Looking at the Sarbanes-Oxley Act of 2002 from another point of view, it becomes clear that non-compliance will significantly penalize company boards. Generally speaking, messing with this Act is never a good idea, which is why legal counsel with extensive experience in this area is a smart business move to ensure compliance.
Part of the Act, brought into effect in 2002, created the Public Company Accounting Oversight Board (PCAOB). Its raison d’être was to oversee auditing public companies. They’re almost as powerful as the IRA and can inspect, investigate and enforce compliance from any company they have in their sights. The PCAOB sets rules for audit reports as well as standards to be adhered to for accounting, and it is mandatory for all companies to be registered with them.
Any and all financial transactions that go to the bottom line of a company must be disclosed according to this Act and all pertinent details must be precise as to time, date, place, reason and where the money went when it was received.
There are to be no personal loans to executives or company directors and all annual reports need to include a statement that specifically says management is responsible for the internal company control structure and financial reports. Woe betides the person or persons who alters, destroys, hides or falsifies records or documents. If found out and prosecuted under the auspices of the Sarbanes-Oxley Act, those found in breach usually face hefty fines and up to 20 years in jail.
Even attorneys and their role of representing public companies before the Securities Exchange Commission are covered in this act. In fact, a section of the Sarbanes-Oxley law requires attorneys to report securities violations to the CEO.
Many of you reading this information will know the Sarbanes-Oxley Act of 2002 for a different reason; the protection of whistleblowers. One section of the act specifically states that any employee who reports an unlawful act is protected. The misconduct or illegal actions may be those of the employer, superior or a colleague.
Whistleblowers have a valuable role to play in keeping companies on the straight and narrow ethical path. They offer the police truthful inside information and run the risk of being the brunt of hostility in the workplace. At one time, employers could retaliate and fire a whistleblower, punish them by other means, such as demoting them or cutting their salary. This is now illegal and thanks to a whistleblower, the company is stopped in its tracks from continuing with their illegal actions. Any employer who tries to retaliate is subject to up to ten years in prison and a significant fine.
Seth Wilburn writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.
Recalled Toyota Results in Life-Altering Potential Spinal Cord Injury
The Camry was recalled, but the owner didn’t know about it. Because of the defect, the owner may have life-altering spinal cord injuries.
This was one of those accidents that never should have happened. A recalled Toyota Camry was involved in a horrendous crash that left the driver in critical condition with possible spinal cord injuries - injuries that may change his whole life.
This was single car accident and involved four occupants in the vehicle at the time. The car was being driven by Theo Anders (names have been changed to protect the victims and their families) who was just about to pull into a parking spot when his car took off at high speed. Anders tried braking, but to no avail; the brakes didn’t work. The resulting crash was extremely violent due to the speed the car was traveling.
This particular model, a 2010 Toyota Camry, was one of seven other models made by Toyota that were recalled due to defective gas pedals. Responding emergency medical services crews took the four occupants in the vehicle to the nearest medical facility for immediate treatment. The driver, Anders, was listed in critical condition and with the distinct possibility that he may have a spinal cord injury, as he had no feeling in his legs when he was pulled out of the wreck.
Defective product cases are always difficult for everyone involved. Anders was driving his car just like usual, never for a moment suspecting that there may have been a problem that would possibly turn his life upside down in the blink of an eye. He had the right to expect that the product he was driving was in good working order and would not harm him.
Anders made it a point to contact an experienced personal injury attorney, one who had a track record of handling life-altering personal injury cases. This was a wise move on his part, as cases like this need qualified legal representation in order to ensure the victim gets a fair and equitable settlement.
Seth Wilburn writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.