Earlier this fall in this Wisconsin employment law blog, we discussed a massive False Claims Act case in which a whistle-blower was awarded $104 million for his role in bringing a company to justice. The man was a former employee of UBS bank and he helped the government uncover the bank's practice of helping wealthy clients skirt taxes. While this may be the largest whistle-blower award in history, things did not end perfectly for the whistle-blower.
The man was actually arrested himself in 2009 on related charges of defrauding the U.S. government. He pleaded guilty and was sentenced to 40 months in prison. The man has now filed a legal malpractice claim against the attorneys that represented him throughout the whistle-blower process, arguing that had they done their job properly, he would have had immunity from prosecution and been given an even larger whistle-blower award.
Whistle-blowers do have some protections under federal law, and in some cases this may include immunity, but this is not automatic. Attorneys do have to take several steps in order to ensure that whistle-blowers are protected not only from retaliation, but also to help them avoid prosecution when possible.
In this case, the man has charged that his attorneys were not as well-versed in whistle-blower law as they claimed to be when he hired them. He said they were inexperienced, and that they missed steps that could have prevented his arrest and prosecution. Specifically, he stated that the lawyers did not file necessary forms with the IRS Whistleblower Office, and that they failed to secure a confidentiality or immunity agreement with the government in exchange for his help with its investigation. Furthermore, he says, his lawyers did not disclose the extent of his cooperation with the U.S. Department of Justice, which could have led to a larger whistle-blower award and a more lenient criminal sentence.
The lawyers have denied the accusations and they say they are confident the case will be dismissed.
We do not yet know whether a court will find that these whistle-blower attorneys engaged in legal malpractice in this case, but this is nonetheless an example of the many risks involved in becoming a whistle-blower and making a False Claims Act claim. Whistle-blowers need to be sure that they understand the potential consequences of their actions and that they protect their rights to the fullest extent.
Source: legaltimes.typepad.com, "UBS Whistleblower Sues Schertler & Onorato for Malpractice," Nov. 1, 2012
- For more information about these types of cases, visit our False Claims Act page.