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Ex-Prosecutor Tried to Sell Whistle-Blower Suit for Bitcoin: Feds

by Andrew Blankstein and Tracy Connor /  / Updated 
A Bitcoin (virtual currency) paper wallet with QR codes and a coin are seen. REUTERS/Benoit Tessier

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A former prosecutor who became a partner at a top law firm carried out a cloak-and-dagger operation — complete with a wig and a request to be paid in Bitcoin — to sell a sealed whistle-blower lawsuit for $310,000, according to the FBI.

Jeffrey Wertkin of the firm Akin Gump was arrested Jan. 31, but the charges against him were not made public until this week.

"My life is over," he blurted out when he was arrested, according to the criminal complaint filed in federal court in northern California. His attorney did not return a request for comment.

Wertkin was an attorney in the Department of Justice's Civil Division, specializing in whistle-blower cases, before he joined Akin Gump as a partner in April, according to a press release about his hiring from the firm, which said at the time that he would be an "invaluable resource."

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In November, Wertkin allegedly left a voicemail for an employee of a technology security firm in Sunnyvale, California, referring to a sealed complaint filed under the False Claims Act, which provides protection for whistle-blowers who have evidence of fraud.

When the employee phoned back, the caller — using the name Dan — offered to send a reacted version of the first page of the complaint as proof he had it and then turn over the rest for a "consulting fee," according to the complaint.

Because the government can investigate a whistle-blower complaint while it's under seal without notifying the company named in it, the lawsuit would be valuable information — and Wertkin wanted $300,000 in "untraceable" Bitcoin for the full copy, court papers allege.

He told the employee — who had agreed to record calls for the FBI — that "it was in his interest to purchase the complaint so that the company could get out ahead of the investigation," court papers say. "Dan mentioned the government might be investigating the company."

Before setting up a meeting in late January, Wertkin hiked his price to $310,000 to cover travel expenses, authorities said. The plan was that he would meet a colleague of the employee named Bill in a hotel lobby and pick up a blue duffle bag with the money.

The morning of the rendezvous, Wertkin allegedly texted "Bill" instructions right out of a spy thriller: "When you walk into the lobby, there is a water station on your left. Just past the water is a chair with a newspaper on it. Please sit in the chair and I will come meet you."

When Wertkin, wearing a wig, approached "Bill," who was really FBI agent William Scanlon, he was arrested. Investigators then learned that Wertkin was a former Justice Department lawyer who, according to his biography, had led more than 20 major fraud investigations.

The complaint did not say how Wertkin allegedly obtained the sealed complaint or if he took it while he was working for the government.

Akin Gump said he doesn't work there any longer.

"We are shocked and deeply troubled by the conduct alleged in the charges filed against Mr. Wertkin," it said in a statement.

"Honesty and integrity are at the core of our values and our client relationships. Immediately upon learning of these charges, we took swift action and Mr. Wertkin is no longer with the firm."

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