Advice please. 161

  • I work for a large automotive manufacturer in the Detroit area and reported a manager’s inappropriate invoice managment about 15 months ago. He was ‘pre-billing’ for invoices at the end of 2001 (paying out to vendors) for work that was not done in 2001. When auditors got hold of the info (I reported the action), they dug deep and six weeks later he was relieved of his duties.
    Forget that he wasn’t fired – he got some sort of parachute. A big sum of money, and he stayed on the payroll for months with use of a company cell phone. Eventually he was gone.
    Auditing found over USD6 million in pre-bill, but I’m not sure what they found that was legit (he may have received services in 2002 for some of the work), but I know for sure not all money was accounted for.
    My questions are:

    1. Since 2001 expenses were over-stated and 2002 expenses under-stated, was the company required to report this fraud to a US government authority?
    2. Was the company required to ‘protect’ me in some fashion? (I believe some retaliation took place – unjust performance remarks logged with HR before the manager-in-question was let go and have yet to be erased. Remarks noted where no problems existed previously.)
    3. Does it appear that the company may be in violation of SOX? And if so, how do I go about logging my issue with authorities?
    4. Does the company owe me anything, financially or otherwise, related to the amount of the fraud? (Over one year ago and not so much as a ‘thank you,’ or, ‘you did the right thing.’
      I am grateful for all comments and advice.

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  • Your company doesn’t owe you anything from a legal perspective. It would be nice if they would acknowledge what you did and hold it up to others as the right thing to do. There is whistleblower protection in the SOX legislation. This should protect you from any retaliation due to your reporting the fraud. You are probably responsible for proving any actions that may have harmed you.
    There is no requirement to report the fraud to the government (unless you are a government contractor, then you may have certain contractual obligations). I assume that you work for a public company. As to whether or not there is any obligation to report this in your external financial statements is based on whether or not the misstatement was material. This is a judgement call by management and agreed to by your external auditor.
    Companies are free to set their own severance policies. It is not setting a good example to give the employee a large package when he leaves, but is not illegal, either.

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