Whistleblower TV Lawyer Episode List
Episode 1: Kool Smiles and Bristol – Myers Squibb
Episode 2: Dr. Farid Fata and Marinello School of Beauty
Episode 3: Northrop Grumman “Black Ops”
Episode 4: America’s Least Loved Bank (Wells Fargo) and Unnecessary Cardiac Procedures
Episode 5: Los Alamos National Lab – Protecting Our Nuclear Secrets
Episode 1: Kool Smiles and Bristol-Myers Squibb
Whistleblowers are the unsung heroes of the legal world. They put their careers, reputations and personal lives on the line to stand up for what’s right. Oftentimes, their legal battles go on for years as corporate defendants do everything in their power to intimidate and shift blame. Even if the case reaches a settlement or verdict and the whistleblower is rewarded with a multimillion-dollar payout, they rarely get any public praise.
A new TV show may change that, however. “Whistleblower,” an eight-episode docu-series, premiered on CBS this summer. Each episode highlights men and women who have successfully filed False Claims Act lawsuits against corporations that have lied, cheated and stolen from taxpayers. By appearing on the show, these whistleblowers have yet again raised their voices to bring attention to this pervasive issue.
In the first episode, we’re introduced to Dr. Michael Greenwald and Dr. Rai, two dentists who saw widespread fraud at pediatric dentistry franchise Kool Smiles. We also meet Mychal Wilson, a former pharmaceutical sales rep who accused Bristol-Myers Squibb of paying kickbacks to California doctors.
Employees Say They Witnessed Medicaid Fraud, Unethical Practices at Kool Smiles
Dr. Greenwald, a dentist with a successful practice in Connecticut, said he joined Kool Smiles because he wanted to do good. The chain specializes in treating children on Medicaid who may not otherwise have access to dental care. Dr. Rai, a young dentist in Texas, was enticed by the promise of a $180,000 salary and the ability to jump start her career without significant experience in the field.
Both whistleblowers quickly realized, however, that their expectations didn’t align with reality. Corporate encouraged dentists to follow aggressive treatment plans, like multiple root canals on baby teeth and fillings throughout a child’s entire mouth. Higher ups justified it by saying that Medicaid patients are slow to seek treatment and dentists were doing patients a favor by taking proactive measures. But Dr. Greenwald said it was all a money grab. Kool Smiles could easily get a $500 Medicaid reimbursement for each child treated in this manner.
Kool Smiles dentists were required to meet high quotas and were given report cards grading them on the number of patients they saw. This was also how their compensation was determined. Dr. Greenwald said it wasn’t unusual for “high achievers” to earn $5,000 or even $10,000 bonuses.
If dentists questioned these practices, they were harassed or fired. Dr. Rai wanted to quit, but it was nearly impossible for her to get out of her employment contract. Employees who quit without proper notice were subjected to a $500 a day penalty and were at risk of being sued by the company.
Whistleblower Dentists Secure $24M Settlement
For Dr. Rai, things finally came to a head when she was fired for refusing to give a cleaning to a child who could barely open his mouth due to stitches from a dog bite. This triggered her decision to file a lawsuit in Texas.
Meanwhile, Dr. Greenwald, who was sick of treating patients like “chicken nuggets getting produced on a conveyor belt,” as he put it, began secretly looking up and saving damning information from Kool Smiles offices across the country. When he decided to file his own lawsuit, he had reams of evidence to add to his case.
Dr. Rai and Dr. Greenwald’s cases were taken over by the Department of Justice and consolidated with suits filed by six other whistleblowers. Typically, the government only takes on the strongest False Claims Act lawsuits. It’s likely that the deciding factors for the Justice Department were Dr. Greenwald’s evidence and the fact that multiple complaints were filed.
It took almost a decade for the case to reach a conclusion. Thankfully, it was a positive one. Although Kool Smiles did not admit any wrongdoing, the company reached a $24 million settlement with the Department of Justice. The two heroes of the episode, Dr. Greenwald and Dr. Rai, split a $4 million reward with the six other qui tam plaintiffs who joined them.
Although not mentioned in the show, the investigation and ultimate settlement also triggered the resignation of Dale G. Mayfield from the Georgia Board of Dentistry. Mayfield happens to be the Chief Dental Officer of Kool Smiles. Amazingly, he was appointed to the Board of Dentistry in the midst of the lawsuit and investigation.
Bristol-Myers Squibb Paid Doctors for Buying Drugs, Says Sales Rep
The second segment of the episode focused on Mychal Wilson, a former pharmaceutical sales rep for Bristol-Myers Squibb. At first, the position seemed to be a great way for Wilson to support himself while trying to break into Hollywood as an actor. However, after a few months on the job he grew concerned about the things management was asking him to do.
Wilson was expected to spend tens of thousands of dollars on gifts for doctors in exchange for their purchasing Bristol-Myers Squibb drugs. He routinely treated “high prescribers” to golf outings, concert tickets, massages, extravagant dinners, Lakers games and even cash payments. Many of these doctors worked at Cedars-Sinai, which is regarded as one of the top hospitals in the country.
Through his position, Wilson had virtually unrestricted access to medical offices. Shockingly, some offices allowed him to view patient charts so he could flag patients who might have benefitted from Bristol-Myers Squibb drugs. BMS encouraged this practice, even when Wilson knew the drugs he was recommending were unnecessary or a competitor’s medication would be more helpful.
Kickback Lawsuit Ends with $515M Settlement
Thanks to an employee benefit program, Wilson entered law school, which he attended in his time off work. Ironically, this program wasn’t so beneficial for Bristol-Myers Squibb in the long run. With his growing knowledge of the law, Wilson began to suspect that his employer was violating the federal Anti-Kickback Statute. He started copying and saving every document he could get his hands on until he was fired for a minor paperwork issue in September 2004. Before then, he managed to fill his apartment and a storage unit with 40,000 pages.
Two years after being fired, Wilson built up the courage to file a federal lawsuit against Bristol-Myers Squibb alleging fraud and anti-kickback violations. He also filed a second lawsuit under California whistleblower law. Although Wilson knew he was doing the right thing, he said he became so paranoid he began checking under the hood of his car every time he drove.
Surprisingly, the federal lawsuit settled in just a year for $515 million, a portion of which was given to Wilson. The California lawsuit, on the other hand, wasn’t resolved for nine years. That case finally settled for $30 million, with half going to the state of California and the rest to Wilson and other whistleblowers who had joined the case.
The settlements featured in this episode are significant, and they earned a good amount of media attention. I was familiar with both cases before the episode, but it was interesting to hear directly from the plaintiffs who pushed these cases forward.
It’s clear from the lawsuits highlighted that evidence can make or break a whistleblower lawsuit. In the Kool Smiles case, I’m sure it was helpful that several employees in offices throughout the country corroborated each other’s stories. When it comes to winning a fraud lawsuit, it’s always better when there are multiple witnesses. However, there is no denying the evidence that Dr. Greenwald saved. That was likely the nail in the $24 million coffin. People’s memories can fail them, but documents never forget.
If you suspect fraud or any other illegal behavior in your workplace, start preserving evidence ASAP. Even if you don’t plan on reporting now, having documentation can give you peace of mind and a stronger case if you do decide to come forward. Remember that employers typically have the right to search your workspace and other company property, like work computers and company cars. It may even be legal for employers to search your purse, briefcase or personal cell phone if they believe you’re storing company information in it. If you’re concerned about being caught with evidence, take a note from Wilson and store hard copies of documents in a neutral place, like a storage unit.
The whistleblowers in these cases chose to file reports with the help of lawyers. Although it is possible to alert the federal government to fraud without legal assistance, having an experienced whistleblower attorney to help you significantly increases your chances of a positive outcome, like the ones included in this episode.
If you’re ready to become a whistleblower, you can start by reporting online. Like Dr. Greenwald, Dr. Rai and Mychal Wilson, you could earn a multimillion-dollar reward.
Whistleblower TV – Lawyer Brian Mahany Reviews
Episode 2: Dr. Farid Fata and Marinello School of Beauty
In the second episode of the CBS show “Whistleblower,” we see two of the more egregious fraud cases I’ve ever seen. The first involves a Michigan oncologist who treated patients with chemotherapy even when they didn’t have cancer. The second segment details a beauty school that lied to students to rake in funding from the Department of Education.
Former Employee Says Oncologist Was Giving Patients Chemo When They Didn’t Need It
Meet Dr. Death. Dr. Farid Fata, owner of Michigan Hematology Oncology, was known as a reputable doctor throughout the greater Detroit area. He saw between 70 and 90 patients a day, and his practice quickly grew to seven offices. Today he is serving 45 years in prison for one of the most heinous crimes in Michigan history. His story is one we have covered extensively.
George Karadsheh joined MI Hematology Oncology in 2011 as office manager. He thought it was odd that Dr. Fata had installed numerous cameras and microphones throughout his offices, but it wasn’t until he spoke with Dr. Soe Maunglay, another doctor at the practice, that he began to suspect fraud.
Dr. Maunglay told Karadsheh that he had seen one of Dr. Fata’s patients while he was away on vacation. He was shocked to discover that the patient, who was undergoing chemotherapy for multiple myeloma, didn’t actually have cancer. Karadsheh began an investigation and looked at the practice’s ratio of consultations to treatment. He said that most doctors recommended treatment for three out of every 10 patients they consulted with. Dr. Fata treated nearly 100% of the patients who came to see him.
Dr. Fata Sentenced to Prison for Health Care Fraud
Karadsheh contacted a lawyer who got in touch with the Department of Justice, and the case moved rapidly. Attorneys got a warrant for Dr. Fata’s arrest in five days. He was arrested on August 6, 2013 on his way into work. Then, federal investigators began a massive search of all of Dr. Fata’s offices.
Karadsheh assisted investigators by giving them financial information, medical records and blueprints of every office showing where sensitive information was stored. Ultimately, investigators determined that Dr. Fata had given 553 patients unnecessary treatment over the course of two years. Not only was Dr. Fata fraudulently billing Medicaid and other insurance companies, but he was recommending chemotherapy for patients who didn’t even have cancer! These patients suffered horrible and sometimes irreversible side effects from chemo they didn’t need, all because Dr. Fata wanted to profit off of taxpayer-funded insurance programs.
One year after his arrest, Dr. Fata pleaded guilty to 13 counts of health care fraud. He was sentenced to 45 years in prison and all Michigan Hematology Oncology offices were shut down. Dr. Fata was also ordered to pay $17 million back to the government. As a reward, Karadsheh was given a few hundred thousand dollars from this fund. It was less than the 15% minimum usually given to whistleblowers, but Karadsheh, being the conscientious person he is, wanted a greater share of the money to go to Dr. Fata’s victims.
We have several stories and interviews about Dr. Farid Fata. Use the search feature on our blog and search for “Farid.”
Beauty School Was Defrauding Dept. of Ed., Says Whistleblower
In California, Tess Mercer was fighting a similar battle against a dishonest employer. A lifelong cosmetologist and single mother, Mercer was excited to find work as a campus director at the Marinello School of Beauty. The company, which operated 57 locations in six states, had a 100-year history and a good reputation in the beauty industry. It had recently come under new management and was expanding rapidly.
However, Mercer realized something was wrong on the first day of her new job. The “campus” was just a storefront in a strip mall. The plumbing was shoddy. Teachers were unqualified and students were given subpar tools to learn with.
Even more alarming was the number of students who were drowning in student loan debt. Tuition started at $16,000 and reached $20,000 in just a few years. Students also had to pay registration and monthly fees to stay enrolled. Mercer said that most students had federal loans, but Marinello also offered its own private loans at an outrageous 18% interest rate. Marinello even set up one-day intensives so prospective students could get their GEDs…and therefore become eligible for federal student aid. Mercer said the school deliberately targeted poor students looking for a way out and sold them a dream that didn’t exist.
Mercer reported her concerns to her supervisor, but they encouraged her not to report or rock the boat. She said corporate told her to continue enrolling “anyone who was breathing.”
Whistleblowers Get $2.5M for Reporting Marinello Fraud
Mercer finally had enough in May 2012, and she resigned from her position. A few months later she went to an attorney, thinking she might have an employment case. She was shocked to hear that she had a False Claims Act case instead.
She began gathering evidence with six other Marinello employees, including Paige Stevens and Tameca Shelton. They created a war room in Mercer’s kitchen and called themselves the “Erin Brockobitches,” after famous whistleblower Erin Brockovich. They spent hours hunting down documents, test scores and financial aid records. Shelton even found evidence of documents that had been burned in a trash can at one of Marinello’s schools.
Despite their hard work, the case stalled. Their lawyers worried they didn’t have enough evidence and the DOJ had not yet decided to take on the case. Marinello fought back hard and turned the accusations back on the whistleblowers, saying they were the ones who committed fraud. Mercer said she started noticing people following her and strange cars parked outside her house.
The case was brought to an unexpected end four years later, when Marinello abruptly closed all of its campuses. The Department of Education had pulled funding for 23 schools and gave Marinello 10 days to plead its case. Rather than fight, Marinello simply shut its doors and filed for bankruptcy.
Finally, the government reached an $11 million settlement with Marinello. Mercer and the other whistleblowers split $2.5 million. Perhaps most importantly, Marinello is out of business and can no longer prey on students looking for a better future.
There’s a misconception that whistleblowers are money-hungry gold diggers who make a quick buck by reporting anything they can. That couldn’t be further from the truth, and this episode is the perfect example why. Reporting fraud is complicated and extremely difficult, no matter how much money a qui tam plaintiff might make. They could make a miniscule amount in comparison to their effort, or they might make nothing at all. Even when a positive outcome is achieved, the far-reaching effects of fraud can never be erased.
During the case against Dr. Fata, Karadsheh was fired and had difficulty finding another job. He spent years in isolation because he couldn’t talk about the investigation while it was ongoing. He had virtually no support system, and many people assumed that his silence meant he was involved in the fraud. Karadsheh had no way to set the record straight until after the case was unsealed, and even then, patients were still angry with him. Despite all this trouble, Karadsheh made only a few hundred thousand dollars.
In the Marinello case, although the six whistleblowers did receive a reward, the beauty company got off relatively easy. The $11 million settlement was paid by Marinello’s insurance company, not Marinello itself. No criminal charges were filed against any corporate employees, and from the looks of the mansion shown on the episode, Marinello’s former owners seem to be doing just fine. Meanwhile, thousands of former students are still struggling to finish their degrees and find work to make up for the money they lost, and they are angry. Whistleblower Tameca Shelton was even assaulted by students in May 2018.
Despite all these hardships, every single whistleblower on the show said they would do it all over again. In fact, almost all of our clients tell me the same thing all the time. Even though the road is difficult and the results aren’t always perfect, whistleblowers know they’re doing the right thing. In cases of healthcare fraud, sometimes blowing the whistle means saving lives. That’s more valuable than any amount of money.
It’s easy to report online if you believe your employer is committing fraud and stealing from taxpayers. Although becoming a whistleblower isn’t easy, doing the right thing is always worthwhile.
Whistleblower TV – Lawyer Brian Mahany Reviews | Episodes
Episode 3: Northrop
It’s not unusual for whistleblower cases to go on for a few years. They are complex lawsuits, and corporate defendants will do everything in their power to avoid blame. But the case featured in episode three of CBS’ show “Whistleblower” stands out because it went on for a whopping 17 years, making it one of the longest False Claims Act investigations and lawsuits ever. Despite the long and difficult case, plaintiff Jim Holzrichter was determined to hold defense contractor Northrop accountable for stealing taxpayer dollars.
Northrop Employee Says Company Was Double Billing the Government
Jim Holzrichter was thankful when he got a job as an electronic technician at Northrop, a defense contractor that makes avionics for military aircraft. The company, which is now called Northrop Grumman, is one of the largest defense contractors in the world. It’s known for its involvement in top-secret “black programs,” including the development of the F15 fighter and the B2 stealth bomber.
Holzrichter later transferred to the product assurance department, where he was tasked with making sure Northrop was properly billing its clients. He was shocked at what he found.
The company was ordering parts from vendors and sending back products it said were defective. When a new part was sent, the vendor didn’t charge Northrop for the replacement, but Northrop’s computer system automatically billed the government for reimbursement. Holzrichter said Northrop was double and even triple billing the Department of Defense over and over again for parts that cost up to $116,000 each. In total, Northrop had defrauded the government out of $9 to $11 million.
Holzrichter reported his concerns to his immediate supervisors, but nothing came of it. When the administrator of product assurance stopped by his desk and told him to stop, he knew something very serious was going on. To avoid getting implicated in any illegal activity, Holzrichter started copying incriminating documents and smuggling them out of his office by taping them to his body under his clothes.
A Second Whistleblower Claims Northrop Was Lying to the Air Force
Holzrichter later received an unexpected call from Department of Defense Special Agent Richard Zott. Agent Zott was investigating a claim by another Northrop employee, and he believed Holzrichter might have information.
The first whistleblower, Rex Robinson, had discovered an entirely different type of fraud at Northrop. He said the company was making dummy equipment and performing false tests for Air Force officials. The fake equipment looked like it worked, but it was all smoke and mirrors. Once Northrop got a contract (and a virtually unlimited budget), employees scrambled to create the technology they told the government they already had.
Between Robinson and Holzrichter’s information, Agent Zott believed they had a strong case against Northrop. Although he was hesitant at first, Holzrichter decided to join the investigation and spent the next year and half passing insider information to Agent Zott.
Surveillance, Searches, Threats—but Holzrichter is Undeterred
It wasn’t long before Northrop caught onto the investigation. Holzrichter knew his phone calls and movements were being tracked at work. One day he was asked to take his shirt off for a search (thankfully, he hadn’t tried to smuggle out any paperwork that day). Someone even broke into his home in the middle of the night and flipped through a stack of Northrop paperwork he was planning to give to Agent Zott.
His cover was completely blown when a U.S. attorney called his work phone and asked him about the wire he had agreed to wear. Holzrichter tried to play it off, knowing that Northrop was listening, but there was no going back after that.
Holzrichter became a pariah at work. Legally, he couldn’t be fired, but he said that Northrop’s legal team put so much pressure on him and he became so anxious that took a medical leave for stress. He never went back to his job.
Meanwhile, the legal case was going nowhere, even with the support of Agent Zott. The Department of Justice declined to take on the case. Northrop was one of the country’s largest contractors and had significant political influence. Winning this case wasn’t going to be easy.
17 Years Later, the Case Settles for $134 Million
Holzrichter on with his whistleblower lawsuit, but Northrop did everything it could to stall the case. Finally, 10 years later, new evidence convinced the Department of Justice to reconsider and join the lawsuit.
Investigators had found employee onboarding materials that said, “what will the customer accept as reasons (we can’t tell the truth).” Northrop had literally trained its employees to lie. This was the smoking gun that finally brought the case to a head.
Northrop suddenly agreed to a settlement the morning before a deposition where retired Air Force Colonel Roger Mosely was scheduled to testify against the company. It would have been the first time a government official had spoken on the record about the case. Agent Zott said he believes that was what finally scared Northrop into resolving the case.
The company didn’t admit any wrongdoing, but it agreed to pay $134 million to settle the claims (Northrop disputes that number and says it paid $62 million. There were several other cases going on at the time involving Northrop involving a $111 million case for work on the space program and an $80 million claim for alleged overcharges and defective equipment sold to the Navy.) Had the case gone to trial, Northrop could have paid as much as $1.2 billion in damages. Although Northrop paid out less than it might have, the money recovered did some good: a portion of it went to the government, and Holzrichter and Robinson’s estate split a $12 million reward.
My Thoughts and the Takeaways from this Case
Becoming a whistleblower is hard. There’s no way around it. Holzrichter spent almost two decades wrapped up in the case against Northrop, and it impacted his whole family. His career took a hit and his life was even threatened. Not every whistleblower faces these challenges to the extent that Holzrichter did, but when you accuse huge corporations of fraud, you would be surprised how far they will go to protect their business and reputations.
Fortunately, Holzrichter had federal Agent Zott on his side. He also became close friends with his fellow whistleblower Rex Robinson. And no matter how tough things got, Holzrichter’s family never gave up on him. In fact, his kids said they’re thankful for the lessons they learned from the experience.
Another aspect of this case is the existence of two whistleblowers. The False Claims Act generally only pays the first whistleblower to step forward. (That means it is important to not delay.) There is an exception, however, that allows multiple whistleblowers to collect awards if they each have evidence of a different fraud. In huge companies like Boeing, Northrup and Bank of America, those incidents are more commonplace.
Finally, there is the award. Although it took 17 years, the payday at the end was $12 million for the whistleblowers.
Now that the case is over, Holzrichter has found fulfillment as a mentor to other whistleblowers. His life went in a much different direction than he probably expected, but he can rest easy knowing that he did the right thing and didn’t back down.
If Holzrichter, or anyone else who’s ever blown the whistle on a dishonest employer, had decided not to report fraud, corporate scammers would still be stealing billions of taxpayer dollars. Like Holzrichter’s father told him, “it’s never the wrong time to do the right thing.” If you know about a company defrauding the government, you too can do the right thing and report it today.
[Want more information on other Northrop Grumman cases, we have plenty!
Whistleblower TV – Lawyer Brian Mahany Reviews | Episodes
Episode 4: Saint Joseph Hospital Cardiologists and Wells Fargo
Sometimes whistleblowers score massive financial rewards, and other times they get nothing at all. Why bother reporting if there’s no money to be made? It’s clear from the cases featured on the fourth episode of “Whistleblower” on CBS that whether you make millions or zilch, becoming a whistleblower is more about standing up for what’s right than getting rich quick.
Kentucky Cardiologist Sees Pattern of Patients with Unnecessary Heart Treatment
Dr. Michael Jones, a cardiologist in Lexington, KY, treats lots of patients with heart problems. He works in the “coronary valley,” a stretch of rural Appalachia where rates of poverty, obesity and smoking are high. But in 2010, he saw a slew of patients with unusual problems coming to see him for a second opinion.
When Dr. Jones examined these patients, he realized that many of them had had perfectly healthy hearts, but they had gotten unnecessary treatment, including stents, pacemakers and even coronary bypass surgery. Dr. Jones realized he needed to act when he saw an elderly patient named Delphina Renfro, who was told she needed two stents and had a heart attack on the table during the procedure to insert them. She survived, but she was left with more than $100,000 in medical bills and more health problems than she had before the surgery.
Dr. Jones took a closer look at the unusual group of patients he saw. He realized that many of them came from Saint Joseph Hospital in London, KY, one of the only places where people in rural eastern Kentucky could get cardiology care.
Doctors Were Defrauding Medicare and Harming Patients
Dr. Jones got his own “second opinion” from his colleague, Dr. Paula Hollingsworth. She had also noticed a pattern of patients who had received improper care. Along with a third colleague, Dr. Michael Rukavina, they filed a federal health care fraud lawsuit, which the Department of Justice joined in 2014. There lawsuit was filed under the False Claims Act, a law that allows whistleblowers to receive a financial reward for stepping forward and reporting misconduct.
The whistleblowers handed over medical records, x-rays and other documentation that showed their patients had received unnecessary care. As it turned out, Dr. Jones had seen almost 40 patients who were treated improperly at Saint Joseph by four doctors: Dr. Sandesh Patil, Dr. Anis Chalhoub, Dr. Sadhia Chatterjee and Dr. Ashmini Anand.
Why were these doctors harming their patients? A hospital can make up to $15,000, and a doctor can make $1,500, from placing just one stent. At these rates, fraudulent doctors can make hundreds of thousands of dollars easily. These procedures are also reimbursable by Medicare and Medicaid, meaning the doctors named in Dr. Jones’ lawsuit were defrauding taxpayers, too.
After a four-year legal battle, Saint Joseph reached a $16.5 million settlement with the government. The hospital also agreed to five years of federal oversight. As a reward for coming forward, the whistleblowers split a $2.45 million payout.
In addition, two of the doctors faced criminal charges. Dr. Patil pled guilty to health care fraud and served two years in prison. Dr. Chalhoub was also convicted of health care fraud and was recently sentenced to 42 months in prison.
Dr. Chatterjee and Dr. Anand were not criminally charged, but they were fined $380,000 for fraudulent contracts with Saint Joseph. They are both practicing medicine again and have each opened their own clinics, Good Heart Corp and Chatterjee Cardiology. Hopefully, they’ve learned their lesson and are not doing more harm than good for their patients.
Employee Says Wells Fargo Was Opening Fraudulent Accounts with Fake Information
Here is a story that just about every person in America has heard. Greed and fraud on an epic scale. Even for a bank, this one was huge.
In the wake of the recession, Yesenia Guitron was happy to accept a position at a Wells Fargo branch in St. Helena, California. After losing her job as a mortgage lender, the Wells Fargo opportunity was a blessing, and she believed in the company’s mission of helping its customers become financially secure.
Guitron and her coworkers were constantly told to “Go for Gr8,” which meant that every employee was expected to open eight new accounts every day. At first, this was no problem for Guitron. Many of her customers from her previous job followed her to Wells Fargo. She quickly realized, however, that this goal was mathematically impossible. If she and her coworkers opened eight accounts every day, every single person in St. Helena would have Wells Fargo accounts in just 125 days.
Guitron said her supervisors told her to lure in customers by any means necessary, even by unbuttoning her shirt and walking up to people on the street. The bank specifically targeted farm workers and immigrants who often did not speak much English.
Even more alarming, Guitron realized coworkers at her branch and other branches were being “devious” to meet their quotas and earn higher commissions. She said accounts were opened with dishonest or entirely false information. She also said bankers were signing farm workers and immigrants up for elite accounts with a $25,000 minimum balance without their realizing it. Bankers earned higher commissions for these accounts, but many customers were left with enormous fees and ruined credit.
Guitron reported this to her supervisors, regional management, HR and the Wells Fargo ethics hotline, but she was told it was all a misunderstanding. She said her managers started shadowing her and even followed her to the bathroom. Her work environment became increasingly hostile, until Guitron was fired in January 2010. Just days later, however, Wells Fargo backpedaled and said Guitron needed to come back to work, or they would say she abandoned her job.
Whistleblower Opened the Door to Wells Fargo Investigation
Guitron didn’t go back to her job, but she did go to a lawyer. In August 2010, she filed a federal retaliation lawsuit and was hopeful the evidence she secretly gathered would prove that Wells Fargo was committing fraud.
To her shock, all claims were dismissed. The judge agreed that Wells Fargo was doing illegal things, but because Guitron hadn’t met her eight-account-a-day goal, the bank had every right to fire her. Guitron appealed but lost again.
Just one year later, news about Wells Fargo’s fraudulent accounts broke and made major headlines. The company was forced to come to terms with the fraud it committed, and it was fined $1 billion. Other whistleblowers who had filed lawsuits against Wells Fargo received rewards, but unfortunately, Guitron has still gotten no compensation for her efforts.
Although Guitron still hopes Wells Fargo will pay her what she deserves, her work has not gone unnoticed. She testified before a grand jury for the Department of Justice’s criminal probe, and her lawsuit was named during the Senate Banking Committee hearing that led to the removal of Wells Fargo’s CEO. She also received the James Madison Freedom of Information award from the Society of Professional Journalists in March 2018.
In the cardiologist segment of the show, a federal agent mentioned that the Department of Justice only takes on 20 to 25% of whistleblower cases. Dr. Jones and his co-plaintiffs were some of the lucky few who have received government support for their lawsuits. The vast majority of False Claims Act claims are actually declined by the government.
There is no black and white reason why the government might choose to decline a False Claims Act lawsuit. In some cases, it could be because the lawsuit is frivolous or there just isn’t enough evidence available. Other times, the case may be strong, but the potential for damages is low or the government has limited resources. Frustratingly, federal officials usually do not explain why they choose not to join cases.
A declination from the government isn’t the end of the road, however. After a case has been declined, qui tam plaintiffs have the option to continue with a private lawsuit. This is not an easy decision. Since the government often doesn’t explain its reasoning, it can be difficult to tell if this type of lawsuit is worthwhile. One incentive is that private whistleblowers get a higher reward. They can receive between 25% and 30% of the recovery, while whistleblowers in DOJ-backed cases receive only 15 – 25% of the recovery. In some states, private whistleblowers can even receive up to 50% of the total verdict or settlement.
Guitron filed a private retaliation lawsuit against Wells Fargo and not a true False Claims Act lawsuit, but either way, she proceeded without federal intervention. She lost, but it’s clear now that her case did, in fact, have merit. It goes to show that this system isn’t perfect. The government and courts might make the wrong call, but you can’t let that stop you from doing what you know is right.
This case is also a reminder of the importance of finding the right lawyer. There are hundreds of personal injury, employment, malpractice and general business lawyers that advertise for whistleblower cases. Many, however, are only looking for the easy buck and hoping the government intervenes. In most cases they don’t intervene, however.
When the government doesn’t intervene, most of these cases get dropped like hot potatoes. These lawyers file the case hoping they have to do little work. When the Justice Department declines as they do in 80% of the cases, they walk away from the case. Often because they don’t have the experience or resources to take on a huge defendant such as Wells Fargo.
The bottom line? Whistleblower retaliation cases can benefit from an employment lawyer. If you think you have a whistleblower reward case, make sure you find experienced counsel and a team willing to take non a declined case.
If you are aware of fraud in your workplace, an attorney can help you determine if you have a strong case and guide you through the False Claims Act process. Report online today, and find out if you’re eligible to win a reward.
Whistleblower TV – Lawyer Brian Mahany Reviews
Episode 5: Los Alamos National Lab
Sometimes in a whistleblower case, it’s not just taxpayer dollars that are at stake. Lives can also be at risk. In the case profiled in episode 5 of CBS’ “Whistleblower,” top-secret nuclear information could have easily fallen into the hands of the wrong people had two whistleblowers not come forward.
Whistleblowers Say Rampant Theft was Happening at Los Alamos Lab
Former Pennsylvania State Police Commissioner Glenn Walp had planned to spend his retirement relaxing with his wife in the sun. When 9/11 happened, however, he felt it was his duty to help protect the country’s national security. He applied and was hired to lead the Office of Security Inquiries at Los Alamos National Laboratory, a massive lab in New Mexico where all of America’s top-secret nuclear projects have been developed, dating back to the Manhattan Project. The lab, which was operated by the University of California, had an exclusive $2 billion contract with the government.
Los Alamos had been required by Congress to create Walp’s new position after a hard drive with confidential information went missing for three weeks. Walp knew he was walking into a challenging environment with lackluster security, and he hired Steven Doran, former Idaho City Chief of Police, to help out. But the pair was unprepared for what they found.
The Los Alamos campus was completely open with little security. Anyone could walk in or out with virtually no notice. Walp and Doran said employees were taking advantage of this by stealing equipment from the lab, including TVs, computers, cameras and refrigerators. One employee even managed to walk away with an industrial water tank. Walp said the lab knew about the theft and just explained it away by saying the missing items were “recycled.”
Employees were also purchasing personal items with Los Alamos money—which was really taxpayer money. Doran said anyone with an ID badge could to go more than 60 stores (like Radio Shack) and purchase things on the Los Alamos account. If vendors asked questions, employees just said they were working on a top-secret project and couldn’t share any information.
Employees had reported theft before Walp and Doran joined Los Alamos, but managers had done nothing. Walp’s efforts to launch an investigation or get the FBI involved were shot down. He and Doran were not only concerned that billions of taxpayer dollars were being squandered, but that there was a serious risk of confidential nuclear information getting into the hands of America’s enemies.
Two Managers Indicted on 28 Counts of Fraud, Theft and Conspiracy
With no help from their managers, Walp and Doran started working with confidential informants to gather information about what was really going on at Los Alamos. The pair secretly brought the evidence home and Walp contacted the FBI, despite being told not to.
One of the informants was John Jennings, a safety specialist who had worked at Los Alamos for 30 years. He told Walp and Doran that his bosses were running a theft ring. The bosses, Peter Bussolini and Scott Alexander, were ordering items for their own personal use and changing item names on invoices to avoid suspicion. The theft became more alarming when Bussolini and Alexander started ordering things like lock pics, surveillance equipment, drones and night vision goggles. Walp and Doran worried that espionage might be happening.
The FBI had enough evidence to raid Bussolini and Alexander’s homes, where they found thousands of dollars’ worth of stolen property. Bussolini and Alexander were indicted on 28 counts of fraud, conspiracy and theft.
The pair eventually pleaded guilty to mail fraud and conspiracy in exchange for having the other 26 charges dropped. Unfortunately, they spent only a few months in federal prison. Still, this was just the tip of the iceberg, and it showed that Walp and Doran weren’t going to allow fraud to continue at Los Alamos.
U of California Faces Scrutiny for Lack of Security
At any other company, Walp and Doran’s managers would have been happy that theft had been uncovered and stopped. But at Los Alamos, managers wanted Walp and Doran to keep quiet and “protect the lab,” meaning protect the University of California’s reputation and its $2 billon contract.
Doran said he knew fraud was still happening higher up the chain. Unfortunately, he and Walp never got the chance to look into it. They were both fired on the same day and escorted out by armed guards.
A few months later, the pair filed a wrongful termination claim. Working with a lawyer, they also alerted the media and exposed the corruption and theft at Los Alamos to the public.
The lawsuit and media attention paid off. Walp and Doran were asked to testify before Congress. The Department of Energy conducted an investigation and came to the same conclusions Walp and Doran had. Many Los Alamos managers left the lab or were reassigned. Most importantly, the University of California lost full control of the $2 billon contract and was forced to share it with several other corporations.
Finally, in 2003, the University of California settled the wrongful termination suit. Walp got almost a million dollars. Unfortunately, Doran didn’t receive as much. Under financial pressure, he took an earlier settlement offering back pay. The University of California also offered to pay any debts he incurred because of his termination. Both Walp and Doran were offered and accepted new jobs with the University of California, but they left the positions a few months later.
In 2015, the government announced it was putting the $2 billion contract up for bid. Frustratingly, the University of California was once again chosen to receive the contract, although it must share it with other companies. Hopefully, the current Los Alamos managers have learned their lesson and are taking security seriously.
In the episode, there is a brief episode with Walp and Doran’s lawyer. She said that the pair documented everything and were extremely precise, no doubt because of their background as law enforcement officers. She said she felt comfortable taking the case because she trusted them and knew their information was accurate. Their evidence was enough to get the FBI involved and indict two managers on 28 federal charges, so clearly, her hunch was right.
This wasn’t the first time vendors have played fast and loose with America’s nuclear programs. In 2016, the Justice Department settled a False Claims Act whistleblower lawsuit against Bechtel National Inc., Bechtel Corp., URS Corp. and URS Energy and Construction Inc. (now known as AECOM Energy and Construction Inc.). The companies paid a combined total of $125 million. The government said the companies “made false statements and claims to the Department of Energy by charging DOE for deficient nuclear quality materials, services, and testing that was provided at the Waste Treatment Plant at DOE’s Hanford Site near Richland, Washington.”
The companies were allowed to settle without admitting any wrongdoing.
Like Walp and Doran in the Los Alamos case, this case began when employees of the Hanford project. Three people who worked on the project, Gary Brunson, Donna Busche, and Walter Tamosaitis, filed their complaint under the False Claims Act. That law entitled them to a huge peice of the $125 million recovery. In fact, whistleblowers can collect between 15% and 30% of whatever the government collects from wrongdoers. Not a bad payday!
If you want to report fraud, take a note from Walp, Doran and the three Hanford whistleblowers; think like an investigator. What would a detective in your situation do? Be thorough, keep records and save everything, even things that seem unimportant. You never know what piece of information will connect the dots. Plus, the more evidence you have, the more likely it is that you’ll have a viable lawsuit the Department of Justice will get involved in.
The other interesting thing that Walp and Doran did is go to the media. Sometimes, fraud is so dangerous that the public deserves to know about it, even if the government decides not to investigate or you run out of legal options. In these cases, your next best option might be to go to a reporter. A newspaper report can cause such a public outcry that the government will open an investigation, or the Department of Justice will reconsider taking on a case. Let me be clear that going to the media isn’t always a good choice, and you should work with a lawyer to ensure you aren’t exposing yourself to legal action or harming a future lawsuit. Still, it is something to consider.
If you find yourself in a situation similar to Walp and Doran, a lawyer can help you report fraud and protect yourself from retaliation. It’s easy to report online, and you may be entitled to a portion of any verdict or settlement.
See also our cornerstone content on Nuclear Industry Whistleblowers!