In 2015, the attorney Fredrick Oberlander filed a Qui Tam law suit in New York state court against Bayrock LLC on behalf of a “client” that he himself created, which was called the “Bayrock Qui Tam Litigation Partnership.”  Earlier in 2015, Oberlander had been sanctioned and removed as the attorney from another case brought against Bayrock in federal court.

Why, it is worth asking, did Oberlander decide to file a Qui Tam case? When a Qui Tam case is won, the plaintiff and the attorney are rewarded handsomely; plaintiffs have received sums in the region of $50 million in the past.[1] Given Oberlander’s crooked and unethical pattern of behavior over the last five years, including the Grievance Committee’s finding that Oberlander improperly threatened to release sealed information unless defendants agreed to pay a multimillion dollar settlement, Oberlander may have filed the case with the expectation of a massive payout.

Qui Tam is an abbreviation of a Latin term meaning “[he] who sues in this matter for the king as well as for himself.”[2] Originally applied in a form of medieval law, in which subjects could make claims on behalf of their monarch, the term makes little sense in contemporary cases when taken literally. Modern legal practices have evolved the concept to make it applicable within accepted norms and standards of the present day.

Qui Tam cases tend to be brought where individuals have knowledge of past or present fraud committed by an entity against the government. The individual who brings such cases forward is typically a “whistleblower”, as they base their claims on information not yet accessible in the public domain. The whistleblower files a case on behalf of the government.[3] If the case is won, he or she makes a sizeable profit out of the claim (often around 15-20%),[4] and the rest is returned to the coffers of the government. Oberlander likely had high hopes for himself in this regard and alleged that Bayrock had committed a$250 million tax fraud.

As to the question of the identity of a whistleblower, the False Claims Act states that any citizen can bring forward a Qui Tam case on behalf of the government.[5] Once initiated, Qui Tam cases are filed secretly so that only the whistleblower and the government are aware of the suit. This affords the government time to analyze the case and decide whether it has sufficient grounds for prosecution. It also allows for the element of surprise. The defendant, who is being sued, will not be aware of the suit until it is filed in a court of law. Furthermore, in these cases, the government can step in and use its attorney general to prosecute the case.[6]

All these factors make Qui Tam a very effective tool in criminal prosecution. It has been used to recover billions of dollars of fraudulently obtained money for the government.[7] So the government, unsurprisingly, has often been eager to act on these cases if they believe that there is merit.

Yet the government does not always choose to take on such cases. Tellingly, the Office of the New York State Attorney General chose not to do so in the qui tam case brought by Oberlander. The government may have deemed that the case was not supported by adequate evidence, or that it was unwinnable. It certainly cannot have helped that the case hinged upon documents that were alleged to have been obtained illegally by Oberlander.

In the case of Frederick Oberlander, the power of Qui Tam was misused. Oberlander claimed to have information that Bayrock committed fraud against the government.  According to him and his client, this amounted to approximately $250 million in evaded taxes. Oberlander attempted to sue Bayrock on behalf of the government, and he had the suit thrown out by the judge presiding over the case.[8]

Lawyers representing Bayrock have stated that the case had to be dismissed since Oberlander had obtained information on the case illegally and used this information as the basis for his Qui Tam case. In the hearings, the judge threw out the case due to Oberlander’s blatant misconduct.

A win in the Qui Tam case would have reaped Oberlander a huge payout. For a lawyer as ethically and morally corrupt as Oberlander, it is reasonable to assume that this drove him to file the case.  Sater’s attorneys stated as much, pointing out that Oberlander had engaged in a “relentless campaign to extort a settlement”.[9] The Grievance Committee for the US Eastern District found that Oberlander committed ethical violations in pursuit of a settlement.[10]  His apparent unchecked desire to amass a personal fortune at others’ expense is a further reflection of his inherently untrustworthy character. Oberlander has not acted as a lawyer seeking justice. He has proven himself to be a greedy trickster filing over the course of many years cases that would net him lots of money with many alleged unethical and illegal tactics.

References:

https://en.wikipedia.org/wiki/Qui_tam#Examples

https://www.phillipsandcohen.com/what-is-a-qui-tam-case/

https://www.whistleblowers.org/faq/false-claims-act-qui-tam-faq/

https://whistleblower-quitam-attorney.net/whistleblower/cases/financial-cost/

https://www.justice.gov/sites/default/files/civil/legacy/2011/04/22/C-FRAUDS_FCA_Primer.pdf

[1] https://en.wikipedia.org/wiki/Qui_tam#Examples

[2] https://www.phillipsandcohen.com/what-is-a-qui-tam-case/

[3] https://www.whistleblowers.org/faq/false-claims-act-qui-tam-faq/

[4] https://whistleblower-quitam-attorney.net/whistleblower/cases/financial-cost/

[5] https://www.justice.gov/sites/default/files/civil/legacy/2011/04/22/C-FRAUDS_FCA_Primer.pdf

[6] https://www.phillipsandcohen.com/what-is-a-qui-tam-case/

[7]  https://en.wikipedia.org/wiki/Qui_tam#Examples

[8] https://www.businessinsider.com/felix-sater-tax-fraud-case-trump-russia-2017-9

[9] Case 1:16-mc-02637-AMD Document 14

[10] https://wiselawny.wordpress.com/2016/03/21/with-trump-in-picture-judges-push-for-contempt-against-2-lawyers-may-falter/

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