This was a recent article on whistle blowing from Appraisal Buzz Newsletter. Very interesting.
Appraisal Buzz Interview
Interview with Linda Stengle
Linda Stengle is an attorney whose practice is devoted to representing whistleblowers in government fraud claims.* She is a Certified Fraud Specialist and currently focuses on bringing claims for violations of securities laws, the tax code, and the federal and state False Claims statutes.* Stengle was the lead attorney in the first whistleblower claim awarded by the IRS tax whistleblower’s office in which the whistleblower was paid $5.5 million.*
BUZZ: Tell us how you became interested financial whistle blowing?
STENGLE:* My interest in qui tam actions in the finance industry in general was piqued when Congress changed federal law in 2009 to provide the United States with some additional protection for the spending of TARP dollars.* Up until then, whistle blower suits had been mostly in the health care arena and defense contracts.* With that change in 2009, the whistleblower lawyers were given a very clear signal by Congress that it thought the whistleblower mechanism was effective and necessary to address large scale finance industry fraud.* Attorneys are taking note, and I personally have seen an explosion in non-pharmaceutical actions.
BUZZ: How did you get involved with the appraiser/appraisal aspect of Dodd-Frank?
STENGLE: John Ferguson tracked me down through LinkedIn because I had been posting information about how I would never recommend an internal compliance reporting mechanism.* He told me about some of his experiences, and the two of us quickly realized that this was a great relationship.* John’s a very experienced appraiser, and I know my stuff.* The two of us just began noodling out the theories and how the appraisal situation could possibly fit into a false claims action.
BUZZ: Some of the components of Dodd-Frank go into effect April 1. Appraisers are feeling like they are fighting "city hall". Do you think Dodd-Frank has any teeth?
STENGLE: I think the whistleblower portion of the act has teeth, at least right now, because the SEC so badly botched the Madoff situation.* The SEC appears to be responsive to whistleblowers, and the folks at the SEC I have worked with have been just incredibly helpful and insightful. Unfortunately, there are many proposed rules that look like they are intent on gutting the whistleblower program, and like other administrative agency processes, the SEC’s interest in claims is going to ebb and flow with the political climate.* Three years from now, the SEC’s interests could be completely different.* The program is evolving.* We’ll have to see.
BUZZ: If it is business as usual on April 1 what can appraisers do? Who are the regulators of "customary and reasonable"?
STENGLE: Well, I wouldn’t rely on Dodd-Frank.* If I were an appraiser who wanted to blow the whistle, I would look for an attorney who understands the various avenues open for a whistleblower recovery and is willing to take a very aggressive stance with regard to filing perhaps multiple claims.* The False Claims Act is an excellent opportunity; it depends on the facts of the particular case.
BUZZ: Does the "whistle blower" component of Dodd-Frank apply to appraisals?*
STENGLE: It can.* It depends on who the whistleblower is blowing the whistle on, and what that potential defendant has been doing with regard to securities.
BUZZ: Should appraisers or lenders that want to report a Dodd-Frank violation to the SEC use the SEC website online complaint form or who should they call?
STENGLE: OMG, call me, or call John Ferguson before filing anything online. That SEC online website complaint form is a nightmare!* Don’t even get me started.* Call me at 215-367-4314 or email me at
lstengle@kenneymccafferty.com.* Or, contact John Ferguson at
john_ferguson2002@netzero.net or (530) 300-2978. Even if I don’t take the case, call me anyway.* I can give some easy tips that will help someone who is courageous enough to try to file a claim on their own.
BUZZ: Are there any monetary rewards associated with the Dodd-Frank and SEC whistle blower program?
STENGLE: Yes.* Assuming the whistleblower has done his or her job properly, the whistleblower gets a percentage of the government’s recovery from a successful investigation of the defendant.* Those dollars can be significant.
BUZZ: How does the SEC whistle blower program differ from the U.S. Department of Labor whistle blower program?
STENGLE: Oh, in several ways.* The SEC program offers anonymity, and it’s not about individual damages.* It’s about fraud on the investors and material violation of government securities laws.* Plus, the whistleblower, if the claim is successful, gets a percentage of the government’s recovery in the SEC program.* None of these things are true in the DOL program, to my knowledge.
BUZZ: Finally is there any protection for the whistle blower?
STENGLE: There is some.* The biggest one in the SEC arena is that the whistleblower can maintain anonymity throughout the process.* Whistle blowing is tricky business however.* It takes forever to get an award, if you get an award, and whistleblowers have been outed, even prosecuted, for creating problems in the government investigation or failing to provide full disclosure and a hundred other things.* I would never ever blow the whistle without consulting an attorney.* It’s just too dangerous.
but AMC's have distroyed my business of 8 years.
