KY Appeals Court Upholds Whistleblower Verdict Against US Bancorp

The United States Court of Appeals for the Sixth Circuit upheld a verdict for Michael Rhinehimer who was fired for being a whistleblower. The Court affirmed that Rhinehimer was protected under the Sarbanes-Oxley Act. 

 Plaintiff filed his complaint in the instant action in 2011, alleging a single count of retaliation in violation of the Sarbanes–Oxley Act. The case was tried to a jury over five days in 2013. At trial, Plaintiff presented evidence that he was disciplined and fired in retaliation for an email he sent alerting one of his superiors to unsuitable trades made by a co-worker, Patrick Harrigan, to the detriment of Plaintiff’s elderly client, Norbert Purcell. The trades, which are undisputed, occurred while Plaintiff was on disability leave. Plaintiff learned of the trades from his personal assistant shortly after they were made. He called his immediate supervisor twice to express concern about the trades, and finally wrote an email to his supervising principal, criticizing the trades for “destroy[ing]” Purcell’s estate plan and asserting that the trades should never have been placed or approved. Upon returning, Plaintiff was specifically reprimanded for his email. His superiors also threatened his job, placed him on an aggressive “performance improvement plan,” and fired him when he ultimately failed to meet the plan goals.

The jury returned a verdict for Plaintiff and awarded damages for economic loss and emotional damages. Via special verdict form, the jury specifically found (1)  that Plaintiff “proved by a preponderance of the evidence that, at the time of the complaint, he had an objectively reasonable belief that Mr. Harrigan had committed unsuitability fraud;” (2) that Plaintiff “further proved, by a preponderance of the evidence, that [Plaintiff’s] email was a contributing factor in his termination;” and (3) that Defendant did not prove “by clear and convincing evidence that it would have discharged [Plaintiff] even if he had not sent the email.” (R. 114, Special Verdict Form, PGID 3850-51.)

The information that was available to Plaintiff was more than adequate to allow him reasonably to believe that the trades were the result of conduct constituting unsuitability fraud. When USBII retaliated against him for reporting that information, it therefore violated Sarbanes–Oxley’s whistleblower protections.

CONCLUSION

For the foregoing reasons, we AFFIRM the judgment of the district court.

https://www.courtlistener.com/opinion/2804082/michael-rhinehimer-v-us-bancorp-investments-inc/?q=rhinehimer&type=o&stat_Precedential=on&order_by=score+deschttps://www.courtlistener.com/opinion/2804082/michael-rhinehimer-v-us-bancorp-investments-inc/?q=rhinehimer&type=o&stat_Precedential=on&order_by=score+desc

OPINION Mcculley v US BANK Released for Publication

SYNOPSIS OF THE CASE

2015 MT 100, DA 14-0267: Mary McCulley, Plaintiff and Cross-Appellant v. U.S. Bank , Defendant, Appellant and Cross-Appellee.1

        Mary McCulley bought a condominium in Bozeman and sought a 30-year, residential loan for $300,000 from Heritage Bank, which later merged with U.S. Bank. She later sued the Bank, alleging the Bank defrauded her by instead issuing an 18-month, $300,000 commercial loan, and failing to notify her of the change. When McCulley could not obtain refinancing and the condominium went into foreclosure, she attempted suicide. The jury found that the Bank defrauded McCulley and awarded her $1,000,000 in compensatory damages and $5,000,000 in punitive damages, which the District Court approved.

           On appeal, U.S. Bank argued that testimony it had offered from a former bank officer and McCulley’s medical records were improperly excluded from evidence; challenged the sufficiency of the evidence to support the jury’s finding of fraud; argued that U.S. Bank could not be held liable for punitive damages arising out of Heritage Bank’s conduct that preceded the merger of the banks; and challenged the propriety of the punitive damages award. McCulley cross-appealed the date set by the District Court for interest to begin accruing on the judgment.

         The Montana Supreme Court concluded that, because U.S. Bank had failed to provide the bank officer’s journals to McCulley during the discovery process, the officer was prohibited from testifying with respect to the journals. The Court further concluded that because U.S. Bank failed to lay a proper evidentiary foundation for McCulley’s medical records, they were properly excluded. The Court held that fraud was demonstrated because evidence at trial established that the Bank falsely represented it would provide a 30-year, residential loan to McCulley, the Bank knew the representation was false, and the Bank intended McCulley to rely on the false representation, which she did to her detriment. The Court also held that, because the federal Bank Merger Act required U.S. Bank to assume “all liabilities” of Heritage Bank, U.S. Bank was properly held liable for all damages, including punitive damages, arising out of Heritage Bank’s conduct, and that circumstances proven during the trial supported the punitive damages award because the Bank’s conduct was reprehensible, the ratio between compensatory damages and punitive damages fell within the guidelines provided by the United States Supreme Court, and the statutory cap on punitive damages provided by the Montana Legislature was not exceeded. Lastly, the  Court concluded that interest on the judgment must accrue from the date of the jury’s verdict, not the date of District Court’s post-trial decision approving the award. Thus, the Court affirmed the damages judgment, and reversed the calculation of interest on the judgment.

1 This synopsis has been prepared for the convenience of the reader. It constitutes no part of the Opinion of the Court and may not be cited as precedent.

Bank VP Gets 3.5 Years For Fraud

So they pick on one little bank in Georgia after all of the big banks ADMIT fraud and just pay the cashier to go free? Is this really justice?

 The former vice president of a Georgia bank has been sentenced to three and a half years in federal prison for using his position to profit off of foreclosed homes in the wake of the housing crisis.

“Bank fraud is a critical problem that has hit Georgia especially hard,” said Acting United States Attorney John A. Horn.

William R. Beamon was convicted by a federal jury in December of five counts of bank fraud, for which he will serve three years and six months in federal prison and forfeit property he took control of while perpetrating the fraud at Appalachian Community Bank in Ellijay, Georgia      http://www.justice.gov/usao-ndga/pr/appalachian-community-bank-vice-president-sentenced-federal-prison-bank-fraud

Victim of Mortgage Fraud sent to Prison for winning lawsuit against US BANK.

Mary Mcculley, who won a $6 million dollar lawsuit against US Bank for actual fraud, was labeled a
"danger to society' and sent to a maximum women's penitentiary April 24, 2014. Accused of
 impersonating a government employee, she was forced to take a plea deal with the Montana
DOJ in order to take US Bank to trial.  After proving that the complainants against her were
in fact co- conspirators in the fraud, and providing the government with undisputed proof, she requested to withdraw her plea based on the new evidence.
Senior Judge Sam Haddon ignored Mcculley's request and court appointed counsel was so stunned
they made no effort to argue. Attorney Lenore Albert of Huntington Beach, CA stepped up to the plate and will be arguing Mcculley's appeal on April 6th before the Ninth Court of Appeals.
Mcculley is expected to spend the last few weeks of her year in prison on home confinement.

United States Court of Appeals for the Ninth Circuit

Notice of Docket Activity

The following transaction was entered on 04/06/2015 at 10:16:29 AM PDT and filed on 04/06/2015

Case Name:    USA v. Mary McCulley

Case Number:    14-30099

Docket Text:

SUBMITTED ON THE BRIEFS TO MICHAEL DALY HAWKINS, JOHNNIE B. RAWLINSON and CONSUELO M. CALLAHAN. [9484516] (SB)

Notice will be electronically mailed to:

Ms. Lenore Albert, Attorney

Leif Johnson, Assistant U.S. Attorney

Timothy John Racicot, Assistant U.S. Attorney

PUNITIVE DAMAGES UPHELD AGAINST US BANK IN MONTANA CASE

Jeff Barnes, who has previously argued in front of the Montana Supreme Court for homeowners in fraudulent foreclosure cases, explains why banks try to avoid jury trials at all cost.




http://foreclosuredefensenationwide.com/?p=547

Judge upholds $5 Million Punitive Against US BANK, calling behavior 'Abusive"

Judge John Brown of Gallatin County Montana, handed down a stiff order to US BANK this week.
Calling their behavior 'abusive and 'reprehensible in an 22 page brief, the Judge denied US Bank's motion to reduce the punitive damage award to Plaintiff Mary Mcculley. Mcculley filed the lawsuit in 2009, after she was forced to sell her home for $200K less than the appraised value one week prior to foreclosure.  During the litigation, Mcculley claimed US Bank destroyed documents, in addition to the bait and switch she claimed happened at closing.

Although Mcculley applied for a 30-year standard residential loan, she ended up with an 18 month commercial construction loan. Mcculley also accused the lawyers for Defendants of lying to the court and misrepresenting key documents. The jury agreed with her, awarding her $1 million compensatory and $ 5 million in punitive damages after a week long trial in February. US Bank filed motions to reduce the amount of damages, but Montana law states that punitive damages, which are to serve as a deterrent, can be 3% of a company's net worth, or $10 million- which ever is less. Judge Brown explains his decision to uphold the jury's decision:

"This egregious behavior by the Bank constitutes intentional deceit , and supports the conclusion that that the Bank's conduct was reprehensible." Judge brown further cited Seltzer v Morton 2007 MT 62 \stating:

     "Abusive conduct toward and individual which causes the type of harm at issue here
       merits considerable punishment, regardless of the setting in which it takes place.
       However, the fact that [ the Bank] utilized the judicial system as a tool to
      accomplish intimidation and oppression makes this behavior uniquely egregious."

 Mcculley was pro-se until six months before the trial, when Andy Patten and
Patricia Peterman of PPBG, Billings Montana stepped up to the plate. You can read the brief in it's entirety here:
see Judge Brown's order and denial here:http://stopforeclosurefraud.com/2014/04/14/judge-upholds-5-million-punitive-against-us-bank-for-fraud/

http://stopforeclosurefraud.com/2014/04/14/judge-upholds-5-million-punitive-against-us-bank-for-fraud/ Mcculley v American Land Title Company and US BANK MT 2013 89 ( supreme court decision )