For drug crimes there are financial incentives for informants, yet proper incentives for whistleblowers in money laundering cases with major financial institutions don’t seem to exist. Martin Woods was the director of the Wachovia anti-money laundering unit in London when he discovered the money laundering that was occurring at his bank. He said that after he reported that information to Wachovia executives, he was treated like a “business prevention officer.” The executives ignored his pleas even though Woods’s instincts were exactly right. They also told him to back off, served Woods a discipline letter, and scheduled a hearing for professional misconduct. Woods ended up quitting his job in frustration a year later. He sued for harassment …show more content…
That’s why Congress has passed various laws to protect them from prosecution, protect their jobs, and even include financial incentives for coming forward with information. One case in 2009 which involved the Swiss banking giant, UBS, displayed how the major players in the financial sector will never face criminal prosecutions. Bradley Birkenfeld quit his job at UBS and two years later he voluntarily informed U.S. federal authorities that the bank was involved in a multi-billion dollar tax fraud scheme. “I became the very first Swiss private banker in history to reveal to the outside world the inside secrets behind these illegal practices. I outlined in great detail how the illegal UBS enterprise was operated, who was directing the enterprise, and how they tried to conceal what they were doing for so long from U.S. law enforcement authorities,” said …show more content…
The DOJ charged him with conspiracy to commit tax fraud because he allegedly withheld information about one of his prior clients. He received by far the harshest penalty for anyone involved. UBS was fined a portion of their proceeds, $780 million, but the executives walked away without charges. That type of precedent will certainly give future whistleblowers something to think about. Meanwhile, UBS announced in 2015 that they were again under investigation by the DOJ for tax evasion with U.S.
It took for the losing in the case with two Bear Stearns hedge fund managers for the government to realize that there was a problem within their justice system. If they couldn’t take down two people accused of deceiving investors, how did they assume that they would be able to take down numerous high-end executives within Wall Street? So in fall 2009, over a year after the initial hit of the financial crisis, Obama introduced the Financial Fraud Enforcement Task to oversee prosecution for fraud and financial crime a week before the hearing to discuss ’08 financial crisis prosecution. With such a department now put in place, the government believed they could go back and review the “fraud” that took place within Wall Street years before and place a blame somewhere, revealing another flaw of the US government and justice system. The government wasn’t taking the cases as serious as they should have. They weren’t finding ways to filter through Due Diligence underwriters and they weren’t calling forth whistleblowers. They were losing the case before it could even
As a consumer I want to be able to trust that I can walk inside a well-known bank and not have to worry about the bank employees taking advantage of me. Over the years we keep on hearing about all these financial scams and almost all of the time it is the consumers who are affected and when the scam is brought to light, it is the lawyers who see a big payday. I choose this particular issue because I am tired of the little man, meaning us the consumers being affected the most by these scams. I would think that the millions of dollars in bonus money that these senior level executive make each year would be enough but no they are greedy sociopaths that takes advantage of people who have less than they do in order to become rich and
Corruption is a persistent problem that plagues the world and it knows no boundaries. Transparency International defines it as the “abuse of entrusted power for private gain” (2013). For the purposes of this thread, ‘corruption’ is defined as any individual, collective, or structural act or process that permits the use of public authority or position for private gain. This definition captures the broad and many ways individuals and institutions abuse power and the public trust. In regard to whistleblowing, much conflict stems from the context in which the whistleblower is viewed. We will examine the case of NYPD Narcotics Detective Frank Serpico who was regarded a snitch and a rat by fellow officers who were on the take and complete a what would you do dilemma.
Last week, we talked about the IRS Criminal Investigation unit, which just released their Fiscal 2012 report. That report was filled with the sort of dry statistics you would expect from an IRS annual report: 5,125 total investigations launched, 202 crooked tax preparers indicted, 199 identity thieves sent to prison, and 64 months average time behind bars for money launderers. But the report also includes dozens of stories of tax cheats who really just should have known better — and some whose stories are so entertaining we just had to share them. Are you having a bad day? Well, be glad you're not one of these people!
In the Matt Taibi book, discussed how a family owned bank called Abacus Federal Saving Bank got prosecuted for the collapse of the world economy in 2008. However, big companies like Citi Bank, Wells Fargo, Chase never get prosecuted even though they all have been involved in countless scandals in crisis of ‘08. A disester caused by an epidemic of criminal fraud that crashed out 40 percent of the world’s wealth. These banks had been caught selling defective loans that had actualy cost victims huge amounts of money, and nobody from these giant companies was being arrested. These banks had already paid hundreds of millions of dollars in civil settlements for virtually every kind of fraud and manupulation. If the monopoly banks like Citi banks,
However, police whistleblower is unfortunately all too rare. In the rare cases when other cops do muster the strength to and integrity to report gross misconduct of another officer, the whistleblower is often times ostracized, intimidated, threats made to the security of their jobs, and threats to their lives. For instance, Mr. Barron Bowling was awarded $830,000 due to the life long brain damage from a beating he received from a Drug Enforcement Administration agent Timothy McCue in Kansas City, KS. Timothy McCue claimed that Mr. Bowling resisted arrest. Fortunately a police detective names Max Seifert had the strength to report the wrong doings of the DEA agent. In doing so, he said reported that Timothy McCue threatened to kill Mr. Bowling, called him White Trash, and called him a system dodging inbred hillbilly. Members of the department destroyed photos of the physical damage done to Mr Bowling. Officer Seifert took the statement of witnesses and re-documented the physical and presented it to officials. For being a whistleblower, officer Seifert was forced into early retirement, lost a sizeable part of his pension, and retirement health insurance. In addition, his name and service was slandered and
A whistleblower is a person who brings to notice any illegal act, fraud or misconduct prevailing with a company or organization. There are multiple situations involving wrongdoing by the government official, or your supervisor or the company itself wherein common people like you and me may feel like reporting and exposing the wrongdoers. The feeling of being a part of the wrongful acts of fraud or misconduct may cause someone to be a whistleblower and expose the unethical people. A whistleblower may be an employee, auditor, lawyer, ex-employee or customer of the company. Being a whistleblower is not easy and glamourous as it sounds! The grim reality of a whistleblower’s life is well described by C. Fred Alford in his book ‘Whistleblowers:
The case being that of Jordan Belfort during the latter part of the 1980’s and early part of the 1990’s. The crime concerned Belfort and the company he had established that of Stratton Oakmont. The company had made a living of selling low quality stocks to a variety of individuals. Stratton Oakmont employees would misrepresent the stocks of companies and make fraudulent claims in order to get the people to purchase the stocks. To go along with the action of making false claims, Stratton Oakmont would buy stocks into the companies at a very low rate. Once the price of the stock had become inflated to the point where the price would be good for the selling, the company would resell their stocks at a higher price. This practice would be termed as “pump and dump”. Stratton Oakmont would go on to dup more than 1,000 clients which totaled to around 200 million dollars. Jordan Belfort would go on to be fined an excess of 100 million dollars and would serve a term of four years in prison. The company in which Belfort created had received a hefty fine of 2.5 Million Dollars and prevent Belfort from being involved with Stratton Oakmont. The case was so unique and interesting that a movie would eventually be made called the wolf of wall street in 2013 and would garner countless
One of the most recent white-collar crime involved Wells Fargo, a banking and financial services provider. In 2016 San-Francisco based bank Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts without permission of their customers. Opening about 1.5 million fraudulent deposit accounts and submitting 565,443 credit card applications allowed Wells Fargo employees to boost their sales targets and receive bonuses. Consequently, customers were wrongly charged fees for accounts they did not know existed. In this business crime scenario, Wells Fargo involved to pay $185 million in fines and refund $5 million to affected customers. Also, around 5,300
Today, worldwide, there are several thousands of crimes being committed. Some don’t necessarily require a lethal weapon but are associated with various types of sophisticated fraud, this also known as a white-collar crime. These crimes involve a few different methods that take place within a business setting. While ethical business practices add money to the bottom line, unethical practices are ultimately leading to business failure and impacting the U.S. financially.
With the emergence of unethical practices found in international corporations, whistleblowing has been more and more common. A whistleblower is a person who exposes any kind of information that is deemed illegal, immoral, or dishonest. In SNC-Lavalin, the whistleblower was justified. In this case, the senior executives were paying bribes and taking money from mega projects won under the Gadhafi regime (Wikipedia, 2015, n.p). There are several issues in this case.
One of the most recent white-collar crime involved Wells Fargo, a banking and financial services provider. In 2016 San-Francisco based bank Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts without permission of their customers. Opening about 1.5 million fraudulent deposit accounts and submitting 565,443 credit card applications allowed Wells Fargo employees to boost their sales targets and receive bonuses. Consequently, customers were wrongly charged fees for accounts they did not know existed. In this business crime scenario, Wells Fargo involved to pay $185 million in fines and refund $5 million to affected customers. Also, around 5,300
Enron and their accounting firm Anderson Accounting brought what we know as “white collar crime” to the forefront. White-collar criminals are not known to be dirty criminals, because they use their heads to get what they want from society. White collar criminals do not use their muscle; instead they use their brain for mischievous way to manipulate people. These criminals are just as dangerous as the bank robbers and murderers in my opinion. In these times, even the most trusted people are being convicted of white-collar crimes, your neighbor, the banker you have trusted for ten plus years, the closest of family friends, no one can be ruled out. White-collar crimes can differ in the sort and magnitude of the crime. There are always new scams coming out every day that society falls victim
In his plea bargaining, Ivan Boesky agreed to pay one-hundred million dollars in fines and to fully cooperate with the SEC members in other investigations of insider trading cases. His cooperation has also led to major charges against Kidder Peabody, Martin Siegel, and other financiers. Without Boeskey’s help, catching other insider-trading criminals would have been almost impossible. Ivan Boesky even wrote a book about his involvement in the world of insider trading; he called it Merger Mania.
...o be intense for arrests for white collar crime than for predatory violence or drug dealing. Indeed, political pressure is more likely to be exerted in blocking or derailing white collar crime investigations than in conventional crime cases, and the police can operate effectively against white collar crime only to the extent that they are relatively free of political influence” (2010:278). Until political influence and the powers of corporations are subdued little can be done to battle this type of crime. People who commit this type of crime have the power to avoid prosecution primarily due the powerful corporations they work for or the institution they are a part of.