Category Archives: Dodd-Frank Act

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Is There Fraud in That Blur of Paperwork?

As whistleblower lawyers, we spend a lot of our professional lives trying to get big companies to behave better when it comes to fraud and abuse matters.  Yes, we represent clients, many of them courageous individuals risking their careers and their personal lives to alert the government of ways the taxpayers are being defrauded.  Yes, some of those clients get paid well for doing the right thing, and when that happens, we get paid as well.  But that’s not the main reason we do this work.

 

We do this work in part because we’re offended by systemic patterns of cheating, and we’d rather spend our time exposing those patterns that coming up with excuses for them.

 

Over the years, one of the things we’ve noticed is how the bewildering complexity of our society’s rules, regulations, and laws have created an environment that actually encourages fraud by making it easier to hide things in the great morasses of paper or electronic data that no one actually reads.  Just bury the details in a massive amount of paper, and what are the chances anyone will ever notice that little — or not so little — scam?

 

There are so many examples.  A recent New York Times article detailed a phenomenon with which we are all familiar:  medical and health insurance paperwork can be utterly impossible to make sense of.

 

“Medical bills and explanation of benefits are undecipherable…, even for experts…”

 

The article quotes a professor of health law.  So we as consumers just shrug and do our best to live in a system that we don’t have time or ability to question.

 

How many of those bills contain errors that we can’t see?

 

As the article points out, we don’t accept this lack of transparency when we go to the grocery store, or when we get a credit card bill.

 

Would it be so difficult to have health care providers and insurers communicate with their patients with transparency?

 

The problem, of course, is not limited to health care.

 

Take a look at the home loan business.  There is a mortgage service company called OCWEN that has been the subject of many recent investigations and lawsuits, over a whole variety of allegations of misfeasance and non-feasance.  Recent settlements with state regulators in California and New York show that the company, which services millions of mortgages, is virtually incapable of providing homeowners with accurate information on their loans.

 

Here’s from a Consent Order with New York State, language that the company admitted:

 

“Ocwen regularly gives borrowers incorrect or outdated information, sends borrowers backdated letters, unreliably tracks data for investors, and maintains inaccurate records. There are insufficient controls in place— either manual or automated—to catch all of these errors and resolve them.”

 

How’s that make you feel as a homeowner?  (OCWEN paid $150 million to New York on behalf of defrauded homeowners in that state alone.)

 

One would never treat a customer this way in a face-to-face transaction.  But in a world of over seven billion people, and more daily transactions than can be counted, we are awash in data and quite blinded by the volume.  And in that smokescreen, there’s plenty of opportunity for mischief.

 

This is why insiders are so critical to the success of whistleblower statutes like the False Claims Act, or the SEC’s Dodd Frank whistleblower program.  In this vast, overwhelming chaos of data, there are people whose job it is to make sense of it all, to navigate through the mess.  When there’s fraud in that morass, only an insider can enable prosecutors and investigators to find it.

Blowing the Whistle on Environmental Law Violations

Scientists believe 2014 will likely be the warmest year on record; and now Christopher K. Warren, a third year law student at Boston College Law School and a former summer law intern with the Whistleblower Law Collaborative, has written a timely and excellent law review article: “Blowing the Whistle on Environmental Law_ How Congress Can Help“.

 

[SCIENTIFIC AMERICAN article].

 

The Note will be published in Volume 42, Issue 1 of the Boston College Environmental Affairs Law Review and is also available online for download as a PDF.

 

Congress has a history of instituting whistleblower programs to protect and reward individuals who expose wrongdoing to the government, most notably the False Claims Act and more recently the Dodd-Frank Act.

 

In this article, Mr. Warren persuasively argues that the recent whistleblower programs instituted by the Securities and Exchange Commission and the Commodities Futures Trading Commission pursuant to the Dodd-Frank Act should be used as models for an Environmental Protection Agency whistleblower program to expose environmental statutory violations and crimes.

 

The major environmental laws such as the Clean Air Act and the Clean Water Act have been on the books for decades now, but the government needs the help of insiders to adequately address violations just as Congress decided in 1986 that the False Claims Act originally enacted during the Civil War needed to be modernized to address the growing problem of fraud against the government. The amended False Claims Act has been hugely successful resulting in the recovery of over $30 billion to the Treasury. The environmental crisis facing the United States and the world is even more daunting and we need all hands on deck. Let’s hope Congress will consider Mr. Warren’s idea.