Whistleblower Hurdles – Scheme Complexity


Now, what happens again?

Now, what happens again?

Whistleblowers often develop their awareness of government fraud schemes over years. For me, I first had some nagging questions about what was going on; then, I studied those around me and formed a hypothesis.  I then watched for a few more years, refining and confirming my hypothesis. Then I started shooting my mouth off.  It was all clear to me because I had studied the misconduct for about nine years.  The scheme was not so easy for anyone else to understand because it was complicated and being conducted in a little backwater niche of the law.   

I’m like a lot of whistleblowers.  I get annoyed with having to wait in line to have a bureaucrat look at and take action on a whistleblower report of misconduct.  My clients typically have a simpler view of the way the bureaucrat decides to handle the complaint, and it’s usually very positive.  “Oh, man!  When the prosecutor sees this, he is going to salivate!”  Or “The only reason the government wouldn’t take this case is if there is a political conspiracy to squelch it.”

Mmmm, not so much.  Prosecutors want cases they can win, and they know they must be able to explain them to a jury.  If the subject matter is complicated, as it often is in financial industry cases, the whistleblower advocate has to be able to explain it to the prosecutor in an easy to understand way.  When I see a potential client fumbling around with a zillion papers, insisting on special coddling in order to be able to articulate the scheme, or insisting that only some rare quant can understand the violations being alleged, I worry the case is dead in the water.  I’m a very sympathetic listener.  If you can’t make me understand it, with my background, how are you ever going to get a jury or a prosecutor to understand it?

Prosecutors sometimes do salivate over a case but not as often as whistleblowers think they should.  I work with some great prosecutors who have a real zeal for protecting the government fisc, and then I work with folks who, well, just aren’t that into it.  They are more worried about things like the pile of cases they already have on their desk, or the firepower of the target defendant, or their win/loss rate.  Many times, they just don’t know what the heck the whistleblower is talking about or how they can use the admittedly new FERA to allow a case to go forward.

One of the nagging concerns I have about shops that keep doing the same type of prosecutions again and again is that fraudsters frequently change things up.  They add another layer of complexity to an already complex money laundering scheme, or they move accounts around, or they are doing creative things with synthetic CDOs that no one has ever considered.  If the anti-fraud legal bar is going to be effective, we need to be willing to learn new tricks, right?

We have to learn them through whistleblowers.  Be patient, guys.  Some of this stuff is new to all of us.

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