A former corporate-fraud prosecutor carried out the “most serious” example of public corruption by a U.S. Department of Justice attorney in years by stealing more than 40 whistleblower fraud cases in 2016 and trying to sell the secret information to companies under federal investigation, prosecutors said.
The scheme was an attempt to woo potential clients and increase his earnings and standing in his new role as a defense lawyer for one of Washington’s most influential law firms, according to prosecutors and admissions by Jeffrey Wertkin at his sentencing Wednesday.
After his arrest for one shakedown attempt, Wertkin embarked on an “obstruction binge” at his private law office to destroy additional evidence of his year-long plot and also tried to frame a former colleague at the Justice Department for the records theft, court files show.
Wertkin’s sentencing hearing revealed a more extensive and calculating crime than previously was made public, showing he stole and copied dozens of files — taking some at night from his boss’s desk at main Justice, copying them and returning them re-stapled — and then reached out to targeted companies in four states to try to drum up business for himself.
An attorney for a California company tipped off the FBI in January 2017 to an approach by Wertkin who had offered to sell a sealed federal lawsuit for $310,000 to the Silicon Valley technology company. “My life is over,” Wertkin told an undercover FBI agent after he was arrested wearing a wig and fake mustache at an intended cash drop at a Cupertino, Calif., hotel.
In a court filing seeking leniency, Wertkin said he committed his crimes while on “a terrible path” of abusing alcohol and marijuana during what his defense called “a period of heightened anxiety and depression, a sense of impending failure at work and a deteriorating marriage.”
“I believe I somehow viewed selling the complaints as a way to escape my problems,’’ Wertkin said in a statement excerpted in a court filing.
Wertkin had joined Akin Gump, Strauss, Hauer & Feld as a $450,000-a-year partner in Washington in April 2016, the same month in which he left a nearly-six year career in the fraud section of Justice’s Civil Division. For more than a month before he moved to private practice, he began copying the federal cases including dozens that were not assigned to him, court files show.
“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 two young children, wrote Wertkin, who court files show lived near Dupont Circle.
Prosecutors said there was no reason to believe Wertkin’s troubles were “anything more than narcissism and greed.”
He was sentenced to 2-1/2 years in prison on two counts of obstructing justice and one count of interstate transport of stolen property in a hearing late Wednesday before by U.S. District Judge Maxine M. Chesney of San Francisco. Wertkin’s attorney had asked for a sentence of a year and a day.
Assistant United States Attorney Robin L. Harris of the Northern District of California told the court Wertkin’s crime “was breathtaking in its scope and is the most serious and egregious example of public corruption by a DOJ attorney in recent memory.”
His sentence “hopefully restores the confidence in public servants who take an oath to serve their government and demonstrates that no one is above the law,” said the district’s Acting U.S. attorney Alex Tse.
A Justice Department spokeswoman did not respond to a request for additional comment on what damage Wertkin may have caused to cases and whether the internal breach triggered disciplinary actions or corrective measures.
Wertkin worked from December 2010 to April 2016 in the department section responsible for recovering $4.7 billion in misspent tax dollars in 2016 alone. Under the False Claims Act, whistleblowers can receive part of recovered funds for tipping off fraud in government services and contracts by filing what are known as qui tam lawsuits under seal to protect their identities while the United States investigates.
Wertkin “took grotesque advantage” of his government position by “shaking down companies” and revealing confidential information and “jeopardized the integrity of the civil justice system and unfairly cast a shadow over the work of the civil fraud section,” Harris said.
Wertkin, who specialized in health care fraud, also threatened the recruitment of future whistleblowers, “knowing full well” that the section’s success depends on such individuals “coming forward with the prospect of secrecy,” she wrote.
Once at Akin Gump and until he was fired in February 2017, he attempted to court potential clients by dangling the stolen information, even hinting to one unwitting partner he knew one company “might have a problem coming up,” prosecutors said.
When that tactic proved ineffective, Wertkin stepped up his crime, admitting that in addition to his pitch to the Sunnyvale-based technology security provider, he tried to peddle sealed lawsuits to a targeted Alabama company for $50,000, to a New York company for a price to be determined, and to a company headquartered in Oregon where he mailed a redacted copy of the cover sheet in the federal case as a lure.
Wertkin also admitted he managed to convince one firm “to retain my services as an attorney to represent it in its lawsuit.”
The company that hired him and the companies he solicited were not named in his case.
“Mr. Wertkin’s secret criminal life was not known to anyone at the firm. We were shocked when he was arrested and outraged when his bizarre, treacherous crimes were revealed,” Akin Gump spokesman Benjamin J. Harris said in a statement Thursday.
In a letter to the court before Wertkin’s sentencing, the firm said it was a victim of his crime and defended its corporate culture.
The theft and misuse of government documents was a “reprehensible betrayal of Mr. Wertkin’s duties as a government lawyer” and of his ethical duties at Akin Gump, and were “harmful to the firm,” partner and general counsel Douglass B. Maynard wrote.
“Whatever drove Mr. Wertkin to his hidden criminal activity, it was not the culture of [sic] firm where he worked for nine months,” Maynard said. “The people he worked with at the firm saw him as a talented, well-liked young partner who appeared well on his way to a bright future.”
Wertkin, a Haverford College and Georgetown Law School graduate, was seen as a “straight-arrow” and promising young prosecutor at the department, where his “intensity and talent” placed him “at the top of the list for the Fraud Section’s most difficult case assignments,” defense attorney Cristina C. “Cris” Arguedas said, citing performance reviews in a court filing.
Wertkin’s troubles spiraled, she suggested, after a federal judge in Alabama threw out a 2016 jury verdict in a trial for a hospice provider accused of fraudulently billing Medicare for patients who were not terminally ill.
Wertkin was the lead lawyer for the government and the loss in the $200 million case, left him “devastated” and “a shell of a man,” his wife, Erin Erlenborn, said in court filings.
Wertkin grew “increasingly irrational,” Arguedas said, and his bizarre “cold-call” to the general counsel of the California firm calling himself “Dan” and offering to sell a lawsuit revealed a man who “truly believed he was at the end of his rope.”
Wertkin “couldn’t stop” even when he knew he would be caught, Arguedas said: Just before he got into an Uber to go to the drop meeting in a hotel lobby, he got a call from a person at the Department of Justice in Alabama investigating “Dan’s” attempt to sell a case there.
Upon returning to Washington, he destroyed evidence in his Akin Gump office before telling the firm he had been arrested and placed paper copies of two complaints that he had stolen into an envelope that previously had been mailed to him by a former Justice Department colleague to falsely implicate the colleague as the thief.
His colleague had mailed Wertkin a picture of the department emblem signed by his colleagues as a farewell gift, Harris said.
Wertkin’s attorney called his actions truly aberrant in an otherwise “careful, diligent and unblemished life” and said it was “a testament to his previous standing in the legal community that so many attorneys and former government officials, including former DOJ attorneys” wrote letters to the sentencing judge on his behalf.
Wertkin, the son of a surgeon and a registered nurse in the affluent New York City suburbs, has resigned from the bar.
“I hope someday I will be able to understand how I could have abandoned my principles and my honor,” Wertkin said as part of statement before sentencing. “I often lay awake at night and think about these actions, and I weep at the tragedy that I have brought on myself.”