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I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail

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Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail

#41

Post by tptacek »

st3v3r wrote: post #38
tptacek wrote: post #2

This almost makes some kind of sense. The "whistleblower award" he got was the percentage of recovery the IRS pays as a bounty for intelligence on tax avoidance schemes; it's a portion of the money he actually helped recover for the government. There is a rational case to make for someone being both fully culpable for wrongdoing while still remaining entitled to bounties they've satisfied. For another complicated IRS…

"There is a rational case to make for someone being both fully culpable for wrongdoing while still remaining entitled to bounties they've satisfied." Not really. Throwing them in jail sends the message that whistleblowing is looked down upon, and thus fewer people will do it. If the whistleblower doesn't have immunity from prosecution, the only way for them really to blow the whistle is to confess to a crime.

It's not the whistleblowing that's looked down on! It's the knowing and deliberate participation in something you acknowledge is a crime. This guy was extremely culpable for the offenses he participated in (read the other link posted on the thread).

Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail

#44

Post by rhino369 »

st3v3r wrote: post #38
tptacek wrote: post #2

This almost makes some kind of sense. The "whistleblower award" he got was the percentage of recovery the IRS pays as a bounty for intelligence on tax avoidance schemes; it's a portion of the money he actually helped recover for the government. There is a rational case to make for someone being both fully culpable for wrongdoing while still remaining entitled to bounties they've satisfied. For another complicated IRS…

"There is a rational case to make for someone being both fully culpable for wrongdoing while still remaining entitled to bounties they've satisfied." Not really. Throwing them in jail sends the message that whistleblowing is looked down upon, and thus fewer people will do it. If the whistleblower doesn't have immunity from prosecution, the only way for them really to blow the whistle is to confess to a crime.

That also sets up a precedent where you can engage in criminal behavior as along as you rat your co-conspirators at a later date.

Confessing should be considered favorably during settlement, but a get out of jail card in every situation is ridiculous.

Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail

#45

Post by sedachv »

rhizome wrote: post #25
tptacek wrote: post #17

Earlier quoted context omitted.

It sort of looks like this bank exec traded 3 years in minimum security prison for more money than any of us could ever use in a lifetime. I'm pretty OK with that precedent!

You're undervaluing time spent locked up.

Federal prison camps are not that terrible: https://www.bop.gov/about/facilities/federal_prisons.jsp

Think of it like a three-year, $100 million sabbatical "upstate." That is enough time to read through the great books. Room and board are covered and there is a commissary for personal items.

Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail

#46

Post by roel_v »

tptacek wrote: post #27
rhizome wrote: post #25

Earlier quoted context omitted.

You're undervaluing time spent locked up.

I would do 3 years for $100MM. I would do the next three years for $100MM, and they're pretty important years in my family! Someone offer me $100MM to be imprisoned for the next three years; I will put my money where my mouth is on this.

I'll do it for $90MM though, pick me! Pick me!

Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail

#47

Post by tedunangst »

cesarbs wrote: post #32
tedunangst wrote: post #23

Earlier quoted context omitted.

The IRS sometimes does that. They'll decide in 2008 that some accounting rule is invalid, and oh by the way, that means you owe taxes back to 2002 when you started using it. They can't reverse a rule, but apparently rules can be clarified at any time, so if your loophole hasn't been affirmatively decided, it may retroactively disappear.

Could this happen to the backdoor Roth? I know they've clarified the "mega" backdoor Roth, making it perfectly valid, but AFAIK there hasn't been word on the backdoor Roth.

I think that's a legislative issue, so probably not.

I'm thinking of cases like tax credits for R&D, where a company claims the lab janitors salary because the lab isn't going to clean itself, but the IRS decides that salary doesn't count as a research cost. The law from congress doesn't usually spell such things out. Or it says "necessary personnel" but is a janitor necessary or not?

Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail

#48

Post by gozur88 »

st3v3r wrote: post #38
tptacek wrote: post #2

This almost makes some kind of sense. The "whistleblower award" he got was the percentage of recovery the IRS pays as a bounty for intelligence on tax avoidance schemes; it's a portion of the money he actually helped recover for the government. There is a rational case to make for someone being both fully culpable for wrongdoing while still remaining entitled to bounties they've satisfied. For another complicated IRS…

"There is a rational case to make for someone being both fully culpable for wrongdoing while still remaining entitled to bounties they've satisfied." Not really. Throwing them in jail sends the message that whistleblowing is looked down upon, and thus fewer people will do it. If the whistleblower doesn't have immunity from prosecution, the only way for them really to blow the whistle is to confess to a crime.

The mistake he made was implicating himself in a crime without getting the deal first. He should have gone in and said "I can testify to criminal behavior, but only if you'll give me immunity." That's probably what his bosses did.

Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail

#49

Post by chc »

viraptor wrote: post #19
chc wrote: post #6

It sounds like he didn't actually go to jail for the crime he blew the whistle on, per se, but for continuing to cover up part of the crime afterward by refusing to produce information they knew he had. Maybe all the folks who got non-prosecution agreements actually cooperated with investigators.

The way I read it, he wasn't actually hiding anyone. This reads like sarcasm to me: > Yeah, I was hiding all right. Hiding by walking right up to the DOJ headquarters in Washington, D.C. and dropping this massive, calculated tax evasion scheme in their laps.

Of course that's sarcasm, but this part is not:

> they charged me with conspiracy to commit bank fraud for not giving up one of my clients.

I don't see any point where he denies that he refused to give up one of his clients, and he pleaded guilty. Taken as a whole, it's my impression that he really was holding back information, but he thinks that should have been forgiven because he gave much more and much better information than he held back.

Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail

#50

Post by wnoise »

tptacek wrote: post #26
viraptor wrote: post #21

Earlier quoted context omitted.

I'm not. It was not an exchange. He neither knew about the money, nor expected it at the start. I think it would be more precise to say: "Bank exec blew a whistle his company and got 3 years in minimum security prison. By coincidence he also got a lot of money afterwards." Basically unless the whole story the whistleblower reported was fabricated, I don't think there's any situation where I'd be ok with the whistlebl…

What do you mean he didn't know about it? He's a banking exec whistleblowing on tax evasion. The IRS bounty on recoveries is not exactly a secret. Even in the unlikely event that he himself wasn't aware of his prospects when he went in, you'd assume literally the very first thing any competent lawyer would have told him was "you stand to make a hundred million dollars if you go through with it". The thing I like abou…

Immunity plus the bonus would be a better incentive to rat them out.
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