Judge fines bank whistleblowers for talking to media

A federal judge in Atlanta has fined two whistleblowers $1.6 million for speaking confidentially to members of the news media about their fraud suit against the nation’s biggest banks while it was being investigated by the U.S. attorney and was, by law, under seal.

Robin MacDonald of the Fulton County Daily Report writes, “The whistleblowers’ contacts with the media did not harm the case, but U.S. Attorney Sally Yates in Atlanta and Assistant Attorney General Stuart Delery in Washington recommended that U.S. District Judge Amy Totenberg levy a higher $2.7 million fine for sharing information about the case with an Atlanta television news reporter and his producer. News of the suit remained under wraps at the whistleblowers’ request until after it was unsealed in 2011.

“The Justice Department, by then, had declined to take the case. Since then, attorneys representing the whistleblowers have settled with six banks they had accused of defrauding military veterans and the government. The banks, including J.P. Morgan Chase and Bank of America, paid more than $168 million to the government. Of that sum, whistleblowers Victor Bibby and Brian Donnelly reaped about $45 million, from which they have paid about 41 percent in taxes, plus legal fees and expenses.

“Yates is now acting U.S. Deputy Attorney General, the second highest post in the Justice Department. Delery is Acting Associate Attorney General, the DOJ’s third-ranking post. Both are awaiting confirmation by the U.S. Senate to make their appointments permanent.

“Totenberg levied the $1.6 million fine in a Jan. 5 order, 10 months after lawyers representing two defendants that have not settled, Wells Fargo Bank and Wells Fargo Home Mortgage, asked her to punish the whistleblowers by dismissing Bibby and Donnelly from the suit—effectively ending the litigation.”