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You may know him better from the reality TV show on Bravo, “Real Housewives of New Jersey”, but Jim Marchese, a mortgage lender, is a real live whistle-blower.
You can’t make this stuff up! Mr. Marchese blew the whistle not once but twice, on two different companies, and received substantial rewards to the tune of about $18 million (Whistle-blower). Read all about it. It wasn’t quick and easy, but it sure paid off in the long run.
It just goes to show that you need to do business the right way, every day. DOJ and other regulators are seeking to increase the rewards paid to those who come forward and tattle on companies who do things the wrong way and cost the tax payer’s money.
Think of all your employees and all the entities with which you do business in some way, shape, or form. Any one of them can become a whistle-blower, and with payouts like these to Mr. Marchese, and with times being tough, more may be looking for a way to earn a big payday. It’s like hitting the lottery. Come across something being done wrong which could cause defaults and/or claims and notify one of the regulatory agencies. Pull the lever and collect the big jackpot. Maybe it’s not that easy, but it’s possible…
As I have said before, when someone comes to you and the conversation begins with the words, “Do you know how to get around that…,” run away as fast as you can, especially when it deals with legal, regulatory and/or agency compliance issues. It just ain’t worth the trouble. It’s much better, and safer, to take the time to do things the right way.
Train your employees to do things properly and encourage them to come forward when they believe there may be problems in the process. Make it clear to all, in policies and processes, and all communications, that it is your intent to operate within the rules and that when errors are detected, they are to be immediately corrected, with adjustments made to avoid reoccurrences. Document, document, document! CYA!
This is a real story of a whistle-blower, not a TV reality show. It can and does happen. Could it happen to you? Don’t think you’re too small. A million dollar settlement could fetch as much as $250,000 for a successful whistleblower. Not a bad day’s pay for doing what’s right.
– Have the systems and processes in place to make sure things are being done correctly; trust but verify. Don’t leave compliance to chance.
– You may want to think again about that investment in quality. Can you afford not to make the investment? Is it worth the gamble?
– Now is a good time to think again about the value of a pre-closing audit program. Did you know FHA will also require these starting in June?
Don’t get whistled for illegal procedure…
