Whistleblower Attorneys Allege Unlawful Penny-Swapping Scheme Against Brinks

As we reported yesterday, whistleblower cases can occur pursuant to some of the most bizarre and unexpected fact patterns. Ranging from corporate fraud and insider trading, to food stamp scams and wayward podiatrists, whistleblower cases span the gamut of ways in which crafty scammers work to defraud taxpayers out of billions of dollars each year. In today’s case, we explore a lawsuit filed against Brinks, Co., an armored-truck company often tasked with moving large sums of cash from one location to the next. Many businesses use Brinks trucks to assist business with transporting cash to the bank without fear of being robbed or risking loss due to insubordinate employees.

Facts of Holbrook v. Brinks Co.

The facts of the whistleblower case against Brinks are unusual in that it involves allegations of unlawful melting of pennies – which are issued by the U.S. Treasury. The whistleblower in this case, a former internal auditor of the Brinks Company, alleges that Brinks intentionally defrauded the United States and its taxpayers by allowing a metallurgist to sort through pennies collected from clients, retain pennies that contained higher concentrations of copper, and replace those with pennies containing a smaller percentage of the precious metal. In fact, the metallurgist was named as a defendant along with Brinks Co. in the original lawsuit, which was initially filed in District Court in New Jersey and since transferred to the U.S. District Court in Columbus, Ohio.

In his complaint, the whistleblower alleges that Brinks entered into an unlawful arrangement with Jackson Metals that allowed it, through its metallurgist, to cull pennies minted prior to 1983. These pennies were part of coin piles maintained by Brinks on behalf of the Federal Reserve in 2006 and 2008. The pre-1983 pennies were created using 95 percent copper and 5 percent zinc, whereas newer pennies contain just 2.5 percent copper and 97.5 percent zinc.

The complaint alleges that each pre-1983 penny is worth approximately two cents. According to plaintiff’s data, Brinks retained pre-1983 pennies to the tune of $44,892, which required the use of tractor trailers to transport. In doing so, Brinks hoarded these pennies in order to keep more valuable ones for themeselves.

At the crux of the whistleblower complaint is the allegation the Brinks unlawfully profited from this scheme, essentially defrauding customers and wrongfully hoarding the valuable copper pennies. In Brinks’ answer, it argues that the plaintiff’s complaint fails to identify actionable fraud – asserting there is no federal law against saving pennies nor was Brinks compensated to store pennies for the Federal Reserve. Brinks recently submitted a motion to dismiss the claims.

Interestingly, the U.S. Mint issued a nationwide ban on melting pennies and nickels in 2006.

Fraud and Deceit Thrives in the Obscure

As the old saying goes: “the devil is in the details.” Fraud is not always out in the open, unashamed and obvious. It is often lurking within seemingly mundane tasks like saving pennies or similar inconspicuous acts. If you are aware of possible fraudulent activity, consider speaking with a whistleblower attorney right away.

By | 2019-06-18T12:37:41+00:00 December 26th, 2013|False Claims Act Legal News|