Earlier this month, U.S. Attorney General Eric Holder spoke – along with several top DOJ colleagues – regarding the administration’s goals to identify, isolate, and eliminate costly and wasteful corporate fraud. In a speech to the New York University School of Law, Holder reiterated that he hopes to see an increase in cases filed under the 1989 Financial Institutions Reform, Recovery and Enforcement Act – as well as an increase in its current whistleblower payout cap of $1.6 million.
To date, very few FIRREA cases have been filed – particularly in light of the advent of the 2010 Dodd Frank Act, which similarly allows whistleblowers with information of corporate fraud the opportunity to come forward in exchange for a possible payout up to 30 percent of an ultimate recovery. However, Holder explained that FIRREA can be a powerful tool in prosecuting fraudulent banks and preventing the type of misconduct having that led to the 2008 American financial crisis and subsequent recession. Recently, FIRREA has proven successful when used in conjunction with the Dodd Frank Act, particularly with regard to the recent settlements involving J.P. Morgan Chase, Citigroup, and Bank of America.
Enhancing Whistleblower Incentives
On the same day as Attorney General Holder’s proposals to fortify the whistleblower provisions of the little-known FIRREA law, several other top officials spoke on similar matters. In a nearby speech to Manhattan-area corporate lawyers, Senior Justice Department official Marshall Miller reiterated the Department of Justice’s commitment to investigating white collar crimes, pointing to its increased use of tools like wiretapping, surveillance and border patrols. Miller further encouraged law firms to cooperate with investigators, stating, “A true cooperator—whether a mobster or a company—must forthrightly provide all the available facts and evidence so that the most culpable individuals can be prosecuted.”
Concurrently, the head of the Department of Justice’s Criminal Division reiterated its commitment to exploring possible parallel criminal and civil investigations of fraudulent activity – thereby subjecting defendants to a more expansive bevy of punishment beyond mere civil restitution and fines.
AG Holder Urges Congress to Expand or Eliminate Caps
In speaking on the matter, Holder stated, “The buck needs to stop somewhere where corporate misconduct is concerned….We ought to consider this further, and modify our laws where appropriate.” Further, Holder explained that increasing whistleblower incentives “could significantly improve the Justice Department’s ability to gather evidence of wrongdoing while complex financial crimes are still in progress—making it easier to complete investigations and to stop misconduct before it becomes so widespread that it foments the next crisis.”
Historically, corporate fraud is one of the most difficult to detect and prosecute – often surfacing after much of the financial damage has already been done. What’s more, possible whistleblowers are often hesitant to come forward against large, multi-national corporations for fear of losing their job or facing a demotion.
Contact a Whistleblower Attorney Today
At Berger Montague, we are not afraid of facing large corporations and can help you thoroughly and confidentially raise your claim to the Department of Justice. For more information about the benefits of a whistleblower lawsuit, contact us today.