Whistle-Blower Suit Thief, a DOJ Lawyer, Saw Scam as Escape

(Bloomberg) -- The pressure finally got to Jeffrey Wertkin.

Wertkin is a former Justice Department lawyer who stole sealed whistle-blower lawsuits and offered to sell them to companies named in the cases. After pleading guilty, he now says the demands of succeeding at a high-powered Washington law firm and providing a better life for his family left him depressed and pushed him down “the wrong path,” according to a legal brief.

A partner at Akin Gump Strauss Hauer & Feld LLP, Wertkin went to a California hotel in January 2017 disguised in a wig to collect $310,000 for one of the suits -- and was arrested by FBI agents who were onto his scheme. Prosecutors accuse him of pilfering 40 whistle-blower complaints when he left government service. They’re urging a judge next week to send him to prison for almost three years, calling his crime one of the worst cases of public corruption ever in northern California.

“I believe I somehow viewed selling the complaints as a way to escape my problems,’’ Wertkin said this week in a court filing seeking leniency from the judge and a prison term of no more than 13 months. “I thought if I could quickly earn a substantial sum of money, I could provide the material benefits I promised my family upon moving to Akin Gump -— a new house in a better neighborhood and private school’’ for his children.

Prosecutors don’t buy Wertkin’s mental-health mea culpa, responding that they doubt his diagnosis “is anything more than narcissism and greed.’’

Before joining Akin Gump, Wertkin spent six years as a lawyer in the Justice Department’s False Claims unit, which handles whistle-blower cases alleging fraud in connection with government contracts. Wertkin specialized in health-care fraud.

The suits, known as qui tam complaints, are filed under seal and given to the Justice Department for review. Prosecutors can intervene if they believe a case is worth pursuing. Only judges can unseal the suits and companies often don’t know they’ve been sued until then.

Wertin said in the brief that his spiral began after a federal judge in Alabama threw out a 2016 jury verdict against AseraCare Inc. over a whistle-blower’s allegations that the hospice provider fraudulently billed Medicare for patients who weren’t terminally ill. Wertkin had spent the better part a year preparing and trying the case and the outcome left him “devastated,” his wife, Erin, said, according to the brief.

Wertkin admitted making off with piles of whistle-blower complaints, some of which he grabbed off his boss’s desk after hours and copied. The lawyer said he initially sought to use them to identify companies he could market himself to as a false-claims specialist after joining Akin Gump in 2016.

“I had never done anything like that in my entire life,’’ Wertkin said, according to the brief. “I knew it was wrong. But my judgment was clouded by stress.’’

Compromised Anonymity

Prosecutors said Wertkin called companies targeted in the suits and hinted “that problems could be lurking for them.” By doing so, the lawyer “blatantly and unilaterally’’ compromised anonymity protections promised to whistle-blowers, the government said.

By November 2016, Wertkin’s efforts to build a client list stalled and the lawyer panicked. “If I couldn’t succeed with this inside information then how could I ever expect to succeed without it?’’ he said in the filing.

Wertkin said he decided to see whether the pilfered whistle-blower cases could be monetized more directly. He used an old iPhone to leave a message for the general counsel of a Sunnyvale, California-based company named in a sealed suit. Identifying himself only as “Dan,’’ he offered to sell a copy of the complaint, he said.

Wertkin also called companies in Oregon, Alabama and New York to make the same offer. None of the companies are identified in court papers. He offered to provide a copy to the Alabama firm for $50,000, prosecutors said.

FBI Sting

The in-house lawyer he contacted at the Silicon Valley firm had alerted the FBI to the call. Agents set up a sting in the hotel lobby. “My life is over,” Wertkin told them when he was arrested.

Still, the government contends Wertkin’s bizarre crime spree went on even after he got out on bail.

Wertkin flew from San Francisco to Washington and headed to his Akin Gump office, where he ditched copies of the purloined complaints and destroyed phone bills reflecting calls to companies, prosecutors said.

He also attempted to frame a former Justice Department colleague to make look as if he’d sent him two of the stolen whistle-blower cases, prosecutors said. Wertkin put the suits in an envelope bearing the government lawyer’s return address, hoping to mislead investigators about the source of the complaints, according to the defense brief. The FBI started an investigation of the False Claims unit in the wake of Wertkin’s arrest.

Even before Wertkin showed up to collect the $310,000 payoff, the cops were on his heels. As an Uber driver drove him to the California hotel, he got a call from a state official at Alabama’s Department of Justice inquiring about “Dan’s attempt to sell a qui tam complaint,” according to Wertkin’s brief.

For his part, Wertkin now acknowledges he betrayed the trust of his colleagues at the Justice Department and Akin Gump. “Looking back,” he said, “I’m shocked at not only how wrong my actions were, but how reckless.”

The case is U.S. v. Wertkin, 17-cr-0557, U.S. District Court, District of Northern California (San Francisco).

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