Despite numerous new state and federal laws (such as the Dodd-Frank Wall Street Reform and Consumer Protection Act) providing large financial incentives to employees for reporting fraud and other financial irregularities, the number of claims continues to rise says Orange County employment attorney.

A recent study by the Association of Certified Fraud Examiners shows that corporate whistle blowers reported fraud in almost all aspects of corporate operations. Accounting fraud constituted 22% of the fraud reported, with each of the following corporate departments also showing fraud: operations (18%); sales (14%); executive and upper management (14%); customer service (7%). Other reported categories included purchasing, warehousing, finance, IT, Marketing, manufacturing and production, director's; human resources R & O and legal. The Securities and Exchange Commission has already set aside $400 million to pay whistle blowers. Dodd-Frank has given real incentives and real teeth to employee reports of financial crime. Prior to Dodd-Frank, only the Sarbanes Oxley Act provided a mechanism to report corporate fraud "in-house", but that was ineffective since no financial incentives were paid. The Federal False Claims Act continues to provide major financial incentives to whistle blowers. This office has handled numerous health care federal false claims with the resulting return to taxpayers of millions of dollars.

According to employment lawyer San Diego, employees are entitled under California and other state laws to file confidential lawsuits on behalf of the government to recover funds stolen from the government and to receive up to 30% of the funds collected as a result of their reporting this fraud. Furthermore, California and federal law protects whistle blowers from retaliation for such reporting.

An employee may assert a fraud claim against their employer in connection with their employment. In order to proceed on a fraud claim the employee must prove: (1) the employer made an intentional misrepresentation as to past or existing fact; (2) the employer knew the representation was false when made; (3) the employer made the representation with the intent to defraud the employee or to induce the employee to rely on its statement; (4) the employee must have reasonably relied on the statement; and (5) the employee's reliance on the statement must have been a substantial factor in the harm caused to the employee. This type of action is most favorable to the employee as an employee may be able to recover punitive damages for the intentional harm caused by the employer says Orange County employment attorney.

As always, this blog is intended as educational background only. Consult with an attorney licensed in your state (we practice only in California), and knowledgeable in employee rights says Oakland employment attorney.

A recent study by the Association of Certified Fraud Examiners shows that corporate whistle blowers reported fraud in almost all aspects of corporate operations. Accounting fraud constituted 22% of the fraud reported, with each of the following corporate departments also showing fraud: operations (18%); sales (14%); executive and upper management (14%); customer service (7%). Other reported categories included purchasing, warehousing, finance, IT, Marketing, manufacturing and production, director's; human resources  R & O and legal. The Securities and Exchange Commission has already set aside $400 million to pay whistle blowers. Dodd-Frank has given real incentives and real teeth to employee reports of financial crime. Prior to Dodd-Frank, only the Sarbanes Oxley Act provided a mechanism to report corporate fraud "in-house", but that was ineffective since no financial incentives were paid. The Federal False Claims Act continues to provide major financial incentives to whistle blowers. This office has handled numerous health care federal false claims with the resulting return to taxpayers of millions of dollars.