WHISTLEBLOWER NEWS QUOTE OF THE DAY:

"Mortgage lenders that fail to follow FHA program rules put taxpayer funds at risk and increase the chances of borrowers losing their homes. We will continue to hold lenders accountable for knowingly submitting ineligible loans for FHA insurance."

— Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division

DAILY WHISTLEBLOWER HEADLINES:

Whistle-Blower Said to Aid SEC in Deutsche Bank Bond Probe

The U.S. Securities and Exchange Commission is being helped by a whistle-blower in an investigation of Deutsche Bank AG’s post-crisis mortgage-trading business, according to people with knowledge of the situation

The SEC received a whistle-blower complaint alleging that the bank inflated the value of mortgage bonds on its books and masked losses around 2013, said the people, who asked not to be identified because the matter is confidential. The SEC is probing how the bank valued government-backed mortgage bonds known as Agency pass-through securities that it amassed after the 2007 U.S. housing crisis.

Investigators are looking at positions overseen by Troy Dixon, who ran the bank’s trading for U.S. government-backed mortgage bonds after the crisis until he left the bank in October 2013, people with knowledge of the matter said last month. SEC investigators want to know whether the bank delayed recording losses over an extended period of time on pass-through securities with high coupons.

Whistle-blowers with the SEC can receive rewards for their information, ranging between 10 percent and 30 percent of the money the agency collects for sanctions over $1 million. Informants "can be among the most powerful weapons in the law enforcement arsenal" of the agency. read more »

9th Circ. Backs Dismissal Of Corinthian Workers' FCA Suit

A Ninth Circuit panel on Thursday freed two whistleblowers' attorney from sanctions but upheld the dismissal of their False Claims Act lawsuit alleging Corinthian Colleges and Ernst & Young LLP defrauded the government, saying a trial court correctly ruled the suit’s allegations had been raised publicly prior to the suit’s filing.

While reversing a sanctions award and describing as "not frivolous" the suit from former Corinthian employees Nyoka Lee and Talala Mshuja, the three-judge panel said the former employees of the defunct for-profit college network had failed to convince them they were an “original source” of the basis of their claims.

"Because relators' allegations were previously publicly disclosed and they were not an 'original source' of the information underlying their allegations, the district court correctly dismissed the case for lack of jurisdiction," the panel ruled in an unpublished decision.

Prior to its dismissal in 2013, the case spent six years bouncing between the district and appellate courts. The original complaint claimed the for-profit college's recruiter practices should have prevented it from allegedly obtaining, with the help of Ernst & Young, up to half a billion dollars annually in funds through the Higher Education Act, which prohibits incentive payments to recruiters. read more »

Lance Armstrong Can't Deny Authenticity Of Documentary Footage in FCA action

A D.C. federal judge on Wednesday ruled that disgraced cyclist Lance Armstrong could not deny the authenticity of his responses in a documentary but will not have to sit for additional questioning regarding the documentary footage and transcripts in the ongoing False Claims Act suit brought by his former teammate Floyd Landis.

Landis alleges that Armstrong and Tailwind Sports Corp, the company that managed Armstrong’s cycling team, submitted false claims to the U.S. Postal Service since the team, which was sponsored by USPS from 1996 to 2004, competed while perpetrating a doping scheme that eventually led to Armstrong being banned from the sport. The U.S. intervened in the case in 2013. read more »

UK Financial Conduct Authority slammed by complaints watchdog over handling of whistleblower

The Complaints Commissioner has slated the FCA over its handling of a whistleblower’s report citing admin errors, poor communication between departments and “insufficient rigor”.

The FCA must pay the complainant £300 compensation as well as carrying out a proper assessment of the information and evidence the whistleblower has, if they agree to it.

The complainant wrote to the FCA in June 2015 alleging that the conduct of two firms, C and P, was exposing consumers to potential losses and that untrained and unauthorized call center staff were giving advice to consumers about investments.

Grassley urges 3rd Circuit to revive fraud case against Caremark

Republican Senate Judiciary Committee Chairman Chuck Grassley of Iowa is urging a federal appeals court to revive a whistleblower lawsuit accusing pharmacy benefit manager CVS Caremark Corp of defrauding Medicare, saying a lower court decision dismissing the case could undermine the goals of the federal False Claims Act.

In an amicus brief accepted by the 3rd U.S. Circuit Court of Appeals on Thursday, Grassley said the lower court wrongly inferred that the federal government knew of Caremark's billing practices based on federal employees' testimony that those practices were widespread. He also said those employees were testifying as individuals, not speaking for the government. read more »