Wave Maker

BOSTON - Weymouth resident Peter Scannell did an admirable job
bringing to light substantial fraud at Putnam Investments, his former employer,
Assistant Attorney General Mary O’Neil said.

But that doesn’t mean he deserves payment for his efforts,
she argued in Suffolk Superior Court yesterday.

Scannell, whose inside information about improper mutual
fund trading at Putnam eventually led to Putnam agreeing to pay the state $50
million, is now suing for a portion of the state’s settlement under the state’s
False Claims Act.

But despite Scannell’s significant - and undisputed -
cooperation with state and federal officials, he didn’t properly sue under the
Massachusetts false claims act, better known as the whistle-blower
law.

O’Neil, arguing on behalf of Attorney General Thomas Reilly,
said Scannell doesn’t have any claim to the settlement because of he failed to
file such a suit.

An employee who is discharged, demoted, suspended, harassed,
denied promotion, or in any other manner discriminated against in the terms and
conditions of employment by his employer because of participation in conduct
which directly or indirectly resulted in a false claim being submitted to the
commonwealth or a political subdivision thereof shall be entitled
to [damages and attorneys fees] only if both of
the following occurred:

(i) the employee has been harassed, threatened with
termination or demotion, or otherwise coerced by the employer or its management into engaging in the fraudulent activity in the first
place; and

(ii) the employee voluntarily disclosed
information prior to being dismissed to a government or law
enforcement agency or acts in furtherance of a false claims action, including
investigation for, initiation of, testimony for, or assistance in an action
filed or to be filed.