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These NYPD officers got to keep their jobs despite arrests

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On a cold December morning just before dawn, NYPD Officer Candice Smith got into her Dodge Caliber and careened eight miles in the wrong direction down a Long Island freeway, narrowly avoiding what could have easily been a tragedy.

Smith — who’d been an NYPD patrol officer for three years at the time of the 2011 incident — was so intoxicated, her blood alcohol level was more than twice the legal limit, police said after her arrest. 

Five-and-a-half years later, Smith found herself back in handcuffs when she was busted for assault in the Bronx and then again in June 2020 in Queens, when she was arrested for drunk driving a second time, public records show. 

Despite the three arrests, Smith, 37, is still a member of the NYPD and, most recently, spent her days watching surveillance cameras from Brooklyn public housing complexes — collecting her full salary, plus tens of thousands in extra compensation, records show.

“I’m an amazing police officer,” Smith, who made $99,516 last year and is now in the process of leaving the department, told The Post when asked for comment on her arrests outside her Queens home. 

“Bad decisions are bad decisions but I’m an amazing police officer.” 

Smith is one of at least 16 police officers who were arrested between 2017 and 2021 and allowed to keep their jobs — even after an NYPD administrative trial judge found them guilty of the acts they were accused of, a Post investigation has found. 

Candice Smith.
“Bad decisions are bad decisions but I’m an amazing police officer,” Candice Smith said.
LinkedIn

Aside from felony convictions, offenses that violate an officer’s oath of office or some domestic violence-related crimes — which all require automatic termination — disciplinary penalties are meted out and decided on exclusively by the NYPD’s police commissioner, regardless of what a department judge recommends or how severe or minor the case is.

All of them were accused of offenses that, if convicted, would have required automatic termination under state or federal law — including assault, menacing, stalking, strangulation and aggravated harassment — but their cases all saw favorable outcomes in criminal court.

It’s not clear why the officers were allowed to keep their positions under the NYPD’s arcane disciplinary system, which has long been shrouded in secrecy, criticized for its lack of transparency and accused of being nepotistic.  

Breaking the law they’re supposed to uphold

The 16 officers are among 445 NYPD employees who were arrested between 2017-2021 for crimes as banal as driving without a license to as serious as rape, child sexual exploitation and murder.

The group – employed by the NYPD in civilian and uniformed roles – make up a whopping 52% of the at least 873 city workers arrested over those years.

Nearly half of them, or 47%, were still employed by the department as of June. Some were even promoted after their arrests.

In comparison, the two agencies with the highest number of arrests in that same period after the NYPD, the FDNY and the Department of Correction, accounted for just 14% and 12% of arrests, respectively. 

“Police crime occurs everywhere across the country in agencies big and small … These are systemic problems in policing.” 

Bowling Green State University professor Philip Stinson

At least 24 members of the NYPD were arrested multiple times, some as many as four times, before they were finally terminated, or resigned, from the department, records show. At least five of those with multiple arrests, like Smith, were still employed by the department, including two school crossing guards and a 911 operator. 

“These are individuals who are sworn to uphold the law and we expect better of our police officers and that’s why it’s a problem,” Bowling Green State University Professor Philip Stinson, who has been studying police crime nationwide since 2004, told The Post.

“Police crime occurs everywhere across the country in agencies big and small … These are systemic problems in policing.” 

Rich Rivera, the policing director for Penns Grove, New Jersey and an expert in officer misconduct, said the cases identified by The Post are just the ones that got reported. 

“There’s more out there than what’s being reported obviously because of the way law enforcement treat each other. A lot of times officers give each other breaks unnecessarily,” Rivera said. 

“We actually know how to break the law very well. We enforce the law, we know what the parameters are and some people tread that line very closely and some people cross it.” 

The Post’s years-long investigation into officer arrests involved police records, court records, news reports, interviews, law-enforcement sources, scholarly articles and other publicly available documents. 

Second chances

Of the 16 officers who were accused of fireable offenses and found guilty of them internally, but still kept their jobs, three pleaded guilty to the crimes in state court — two to drunk driving and the other to disorderly conduct. The rest of the cases had already been sealed when The Post inquired about them.

Among them was Sgt. Edel Sanchez – whose felony domestic violence case is sealed in the court system — but who was found guilty of the conduct internally by an NYPD administrative trial judge.

The NYPD’s internal administrative reviews of cops who’ve been arrested happens either at the same time the case plays out in criminal court or after. The department determines whether the officer was convicted of or engaged in conduct considered a misdemeanor or felony crime under state or federal law. They apply a lower standard of proof than the “beyond a reasonable doubt” standard in criminal trials. 

Sanchez was charged with felony strangulation, assault and harassment for allegedly pinning down his wife and choking her in their Queens home in February 2018. Sanchez, who’d been with the department for almost 14 years at the time, allegedly became enraged when his wife didn’t wake him up and bring him to bed while he was asleep on the couch “like a dog” after a night of drinking.  

During his department trial, Sanchez claimed his wife falsely accused him. 

While it’s unclear how his criminal case was resolved, an NYPD trial judge in April 2021 found Sanchez guilty of choking his wife and determined her story to be credible, noting in particular the visible bruises she had on her body after she reported the incident. 

Philip Case.
Officer Philip Case was arrested for menacing in 2019 after he allegedly pulled a gun on Kevin Skervin in a road rage incident.

But instead of termination, the department docked Sanchez’s pay 26 days, took away 30 vacation days and placed him on dismissal probation for a year where he would be fired if he broke any other department rules.

He’s currently back to full duty with his department firearm, working out of the transit bureau’s anti-terrorism unit. 

“I wish I could be able to talk about this and answer your questions but I can not,” Sanchez told The Post when asked about the arrest. 

The cop who pleaded guilty to disorderly conduct, Officer Philip Case, was also allowed to keep his job even after being found guilty of the conduct internally, as well.

Case, then 49, was busted for menacing in Sept. 2019 after he allegedly pulled a gun on Kevin Skervin in a Queens road-rage incident and threatened to “shoot and murder” him while pointing his weapon at him and another passenger, Tomas Ortega Martinez. At the time, Case had been working a side gig for the US Open tournament without the department’s permission.

About a month-and-a-half after the incident, the NYPD found that Case had displayed a gun during an argument and was guilty of menacing, harassment, wrongful threat of force and off-duty employment without permission. They docked his vacation days and put him on dismissal probation. 

In court, he pleaded guilty to disorderly conduct, a violation and not a crime, which allowed the case to be sealed. 

These days, Case is back to full duty with his department firearm at the 79th precinct in Brooklyn and denies that he pulled out his gun and threatened Skervin and Martinez. He is currently embroiled in a civil lawsuit brought by the two men. 

Philip Case.
Case pleaded guilty to disorderly conduct and was allowed to keep his job.
Gabriella Bass

“We had a little road dispute. I cursed him out, he cursed me out. He said I had a firearm. My gun was at home,” Case told The Post Tuesday, adding he’s grateful to be back to full duty.

“There was no proof of what I did. They just went along with it.”

Numerous other cases show a similar trend:

  • Police Officer Jeffrey Augustin was busted for allegedly choking his wife and threatening to kill her after getting into a fight over money in Nov. 2017 on Staten Island. The case is sealed in the court system but nearly two years later, an internal administrative review found he had assaulted someone twice and made a harassing phone call. He was suspended without pay for 13 days, ordered to undergo counseling and placed on dismissal probation for a year. These days, he’s back to full duty, working out of the 84th precinct. He didn’t return a request for comment. 
  • Police Officer Victor Cruz was busted for assault for allegedly attacking his girlfriend in April 2018 in Manhattan. The case is sealed but internally, he was found guilty of assault and he was ordered to undergo counseling, placed on dismissal probation and was docked a number of suspension days. These days, he’s back to full duty, working out of the 44th precinct. He didn’t return a request for comment. 
  • Police Officer Anthony Amirally was arrested in Dec. 2018 in The Bronx for allegedly choking his mom during a fight at the family’s home. The charges were later dropped after the mom refused to cooperate and the case is now sealed but an internal administrative review found he was guilty of assault. He was ordered to undergo counseling, placed on dismissal probation for 12 months and docked 32 suspension days. These days, he’s back to full duty, working out of the 28th precinct. He didn’t return a request for comment. 
  • Det. Aliskender Raji was arrested for assault and criminal mischief in Feb. 2020 in Queens for allegedly kicking his wife and smashing her cell phone. The case was sealed but an internal administrative review found he was guilty of assault and criminal mischief and he was ordered to undergo counseling, placed on dismissal probation for 12 months and docked 14 suspension days. These days, he’s back to full duty, working out of the department’s criminal intelligence section. He didn’t return a request for comment. 
  • Police Officer Chon Huang was arrested for assault in May 2019 in Brooklyn for allegedly punching an e-bike driver who almost clipped his daughter. The case is sealed but internally, he was found guilty of assault and he was placed on dismissal probation, and docked 30 suspension days. These days, he’s back to full duty, working out of Brooklyn’s 94th precinct. He declined comment.

Low conviction rates, sweetheart deals

Of the 908 total arrests involving city employees tracked by The Post between 2017 and 2021, just 21 are still pending in the court system. There is little information available about the cases that were adjudicated, because the vast majority of them are sealed.

Cases are sealed when the charge is dismissed, the district attorney declined to prosecute or the defendant pled to a violation such as disorderly conduct, which is not a crime. It can also happen when the case ends with an adjournment in contemplation of dismissal (ACD), where the judge orders that the charges be wiped as long as the accused stays out of trouble for a certain time period, usually six to 12 months. 

The bulk of the cases against NYPD staff involved violent and domestic violence-related offenses that are grounds for automatic termination, including assault, harassment, aggravated harassment, menacing and strangulation. 

Under New York state law, any officer that is criminally convicted of a felony, or a misdemeanor that violates their oath of office – such as perjury, official misconduct, bribery, menacing, stalking, assault or aggravated harassment – is automatically terminated but still may be entitled to their pension. 

Any law enforcement officer accused of most domestic violence offenses automatically faces termination because, under federal law, anyone convicted of such a crime can’t have a firearm, which would preclude them from police work. 

However, the general likelihood that NYPD employees will see a conviction on such offenses are slim. Between 2017 and 2021, cases involving NYPD employees led to convictions about 26% of the time, primarily for DWI offenses — compared to 38% of the general public who were prosecuted in the five boroughs during that same time period. 

Other city workers, like teachers and firefighters, were also more likely than their NYPD counterparts to see convictions in the court system, with an average of 31% of cases resulting in convictions.

The NYPD’s disciplinary matrix states cops could still be penalized internally or fired after an arrest, regardless of what happens in court.

But a 2016 study on police crime published by Stinson found cops are six times more likely to lose their jobs in violence-related cases if the officer is ultimately convicted in criminal court. 

“Prosecutors, to be able to do their daily bread and butter work, they rely on police officers showing up in court and cooperating with them on prosecutions, the run of the mill criminal cases, just the daily grind of prosecutors,” said Stinson, who is considered the leading expert on police crime.

“I think that in some instances, prosecutors are very reluctant in any way to piss off the police … so in cases that are not getting a lot of media attention especially, I think it’s highly likely that police officers are more likely to get favorable outcomes than other defendants would in their criminal cases.” 

I had the evidence … it was still not enough

When Melissa’s boyfriend NYPD Police Officer Christopher Valencia strangled her, held her prisoner, busted her lip and bit her so hard on her leg, it drew blood, she was confident the case would succeed in court. 

After all, she was a police officer herself and she believed she had the evidence necessary to bring a case – photos of her injuries, text messages of him admitting to the crimes and witnesses who saw parts of the attacks.

“As a cop I knew I had the evidence that I would need and apparently it was still not enough,” Melissa, now 27, told The Post in a recent interview, asking that she only be identified by her first name.

The Post reviewed photos of Melissa’s injuries and text messages from Valencia admitting to the attacks.

Christopher Valencia.
Officer Christopher Valencia strangled his girlfriend, held her hostage, and bit her.

When Melissa reported the attacks in Jan. 2021, which happened on two separate occasions in Queens and in Suffolk County, Long Island about a year prior, prosecutors at the Queens County District Attorney’s Public Corruption Bureau were reluctant to try the case, she alleged. 

The assistant district attorney assigned to the case asked her, “Well did you ask for that?” and told her that to an outsider, her injuries “just look like rough sex,” Melissa alleged. 

“She’s like, ‘You’re a cop you get it’ and I’m like, ‘I know I’m a cop but no I didn’t ask for him to do this to me,’” Melissa recalled. 

“They said that if he got charged with [a domestic violence related offense] he would lose his job. I said ‘he shouldn’t have the job’ …  she’s like, ‘Well I can’t just be OK with that because he’s a cop.’

“Every time I left there I was just hysterical crying. They made me feel like I was doing the wrong thing and I felt they were just trying to protect him because he was a police officer … they didn’t want more poor attention on the police department.” 

Melissa was prepared to go to trial and had numerous trial prep dates with prosecutors — but soon learned they decided to offer Valencia an ACD after he completed 26 domestic violence/anger management treatment sessions, which would seal the case after a year.

She told them she didn’t agree with the decision and still wanted to move ahead with trial, but was told the matter was settled.

“Everything was there, I had all the evidence, I knew what he did wasn’t right and I knew I was prepared and for them to just make a deal … I just felt so defeated,” said Melissa, who has since left the NYPD and moved to North Carolina. 

“It scares me that one day he’ll have a gun again and will be interacting with the public.” 

Valencia is still employed by the NYPD on modified duty nearly two years after his arrest. It is unclear if there are any internal disciplinary proceedings against Valencia currently underway. He didn’t return a request for comment. 

In response, a spokesperson for the Queens County District Attorney’s Office said “the disposition was appropriate.” 

“With these facts and two parties who were not police officers, the outcome would have been exactly the same,” the spokesperson said. “When the 2019 crime was reported by the complainant [a year and a half] later, the defendant was charged in accordance with the facts of the case.”  

The office said the injuries — including bitemarks left permanently etched on Melissa’s legs — didn’t meet the standard for felony assault.

Beyond the 16 officers found guilty internally yet still employed, Valencia is one of 31 cops identified by The Post who’ve kept their jobs after they were accused of fireable offenses. But he, like the others, saw favorable outcomes in the court system. Any internal disciplinary measures against them are either unclear or underway. 

Christopher Valencia.
Valencia is still employed by the NYPD on modified duty nearly two years after his arrest.

Among them is also Police Officer Ernie Moran, who faced automatic termination after he was charged with aggravated harassment and stalking on July 8, 2020 for sending his ex-girlfriend multiple text messages stating “he was outside her house” and “had his firearm and would kill whoever she was with.” 

Moran, then 34, had been dumped three months prior but continued to call his ex “multiple times on a daily basis,” showed up at her house after she asked him to stop contacting her and once got into a fight with a man he thought she was dating. 

The victim told cops she was afraid for her safety because Moran had allegedly physically abused her throughout their relationship. 

In Dec. 2021, Moran pleaded to fourth-degree criminal mischief, which isn’t an oath-violating offense, and was sentenced to $22,000 in restitution, court records show. 

Nearly a year after his conviction, he is still employed with the NYPD, working on modified duty out of a Bronx courthouse and collecting tens of thousands of dollars in overtime and extra compensation. 

It is unclear if there are any internal disciplinary proceedings against Moran currently underway. He didn’t return a request for comment. 

Ernie Moran.
Officer Ernie Moran was charged with aggravated harassment and stalking on July 8, 2020.

“Officers who are convicted, even officers convicted of misdemeanors, I would argue shouldn’t be police officers,” said Stinson. 

“They violated the public trust and we have to work hard to maintain police accountability but also police legitimacy and if the citizenry doesn’t view their police officers as legitimate because of officers who were being convicted of misdemeanors are still working it could lead to erosion in the trust in police.” 

Convoluted, nepotistic disciplinary system

In the case of Smith, the disposition of her 2011 arrest is unclear and the 2017 bust on assault charges is sealed. Following her June 2020 arrest for drunk driving, she pleaded guilty to driving while impaired and her license was suspended for 90 days. 

She was disciplined internally over her 2017 bust for assault where she was found guilty of an off-duty physical altercation and placed on dismissal probation for 12 months, ordered to undergo breath testing and docked 30 days pay. 

Even though Smith’s third arrest was more than two years ago, she was only suspended without pay at the beginning of November, and is now “currently separating from the department,” an NYPD spokesperson claimed this week. 

Smith’s department trial wrapped up in July, the spokesperson said. She’d been on modified duty and collecting her paycheck as recently as November 1.

For years, the NYPD’s disciplinary process was criticized for a myriad of reasons and shrouded in secrecy, prompting an overhaul of the system in Jan. 2021 that sought to improve “fairness and efficacy” and reduce inconsistencies and oversights.

Dr. Keith Taylor, a former NYPD Internal Affairs supervisor who is now an Adjunct Assistant Professor at John Jay College of Criminal Justice, said the department had “historic issues with certain groups getting disparate treatment” over others when it came to discipline and noted that nepotism had long played a role. 

In one case identified by The Post, Lt. Marykate Mullan was assigned to the NYPD’s Internal Affairs Squad and had been with the department for nearly 20 years when she was arrested for drunk driving after getting into an accident in March 2017 in Queens. 

She pleaded guilty to driving while impaired and an internal administrative review also found she had driven drunk. She was placed on dismissal probation, ordered to undergo counseling, docked 20 vacation days and suspended without pay for 23 days, among other penalties. 

Despite the conviction, Mullan was not demoted or terminated and instead, was given a discretionary “special assignment” promotion about three years later.

The promotion came with a salary increase, which bumped her total pay with overtime from $159,676 in 2019 to $218,362 in 2020 and $226,050 in 2021 until she left the department the following year. She declined comment.

Det. Michael Gries was busted for drunken driving in Brooklyn in Oct. 2017, about a year and a half after he’d been promoted to the rank, and was convicted of the offense and later found guilty of it internally as well. 

He was placed on dismissal probation, ordered to undergo counseling and docked 10 vacation days, among other penalties. 

Despite the conviction, he was never demoted from his role and instead, was promoted to a second-grade detective sometime between 2021 and 2022. He didn’t return a request for comment. 

“There are certain groups that may have more connections … they have people that they can reach out to both in the executive level as well as the political class who can help them with these [cases],” explained Taylor. 

“Some other groups may not have access to that kind of power to intercede in the disciplinary process.” 

In comparison, Det. John Glynn was demoted after his drunk driving bust in 2019. 

Glynn, whose Jan. 2019 case is sealed in the court system, was demoted to the rank of police officer in Feb. 2020 after a year and a half as a detective. He didn’t comment when reached by The Post.

“He may not have had any friends in high places,” Taylor said. 

While each officer arrest is handled on a case-by-case basis internally, Taylor said such instances of disparate treatment are one of the reasons why the disciplinary matrix was reformed in 2021. 

The results of the reform are a convoluted labyrinth of “presumptive penalties,” “mitigated” and “aggravated” penalties for a wide range of offenses, both criminal and internal, that almost always come down to the police commissioner’s discretion.

Officers who deny the charges against them can contest them in an internal trial but the process can take years and in the meantime, they’re allowed to remain on modified duty and collect their full salaries.

Lt. Marykate Mullan.
Lt. Marykate Mullan was not demoted or terminated after pleading guilty to drunk driving in 2017.
Steve White

Despite the reforms, connections within the police department still appear to prevail. 

Det. Nalik Zeigler, whose parents were two NYPD bigwigs – former NYPD Deputy Commissioner of Equal Employment Opportunity Neldra Zeigler and former Chief of Community Affairs Douglas Zeigler – was busted for drunk driving and allegedly crashing into parked cars in Oct. 2018 in Manhattan just weeks after his dubious promotion to second-grade detective seven years into his NYPD career.

He pleaded guilty to drunk driving internally and was placed on dismissal probation, among other penalties — but it took three years for the case to move through the courts.

By then, the disciplinary reforms were already in place and under the current standards, drunk driving with aggravating factors, such as crashing into cars and causing property damage, could lead to termination, or at the very least a demotion. 

Instead, more than a year after Zeigler was found guilty in criminal court of drunk driving, he is yet to be demoted or face any other known internal discipline and remains at the department’s cushy Intelligence Bureau.

He didn’t comment when reached by The Post. 

Rotten to the core

To understand why NYPD employees are more likely to be arrested than their fellow city workers, Dr. Thomas Coghlan said the problem lies within the department internally. 

The clinical psychologist, who is a retired NYPD detective and a therapist for members of law enforcement, first responders and their families, pointed to the high rate of civilian arrests within the department as evidence of a larger, internal breakdown. 

“The concern is with the department as an entity, as an employer, right? Why does this employer represent this disproportionate piece of the data?” said Coghlan, who is also an adjunct professor of forensic psychology at John Jay College of Criminal Justice. 

“The department is a toxic workplace, it’s a toxic cesspool that when you sit in it long enough, you become toxic.” 

Coghlan said the internal stress that comes from working for the NYPD, both in civilian and uniformed roles, leads to a “whirlwind of maladaptive coping mechanisms” and concerning behaviors that “leads us down the road to arrests.” 

A lot of that stress comes from the issues highlighted in a Post exposé about the reasons why officers are leaving the department in droves, including forced overtime, poor work life balance and the NYPD’s history of nepotism.

“Punitive paradigms, draconian policies and autocratic hierarchical system, nepotistic behavior … we know that the agency created stressors, the organizational stressors, that is where the stress in police work really exists,” said Coghlan, citing research. 

When you couple organizational stressors with the general stress and trauma of being a police officer, occupational stressors like mandated overtime and canceled days off, and add in family and social stressors, “it is like gasoline on a fire,” said Coghlan. 

“You become physically and mentally exhausted, you develop a heightened sense of pessimism and cynicism, low sense of fulfillment, low sense of efficacy within your job roles,” explained Coghlan. 

“Then that behavior comes home with you, your mood decompensates, you develop a more apathetic mood to things, you develop a more indifferent mood and that permeates throughout your personality … Operating in that type of structure long enough causes a tremendous amount of discord in people’s personal lives.”

While getting arrested can have a significant impact on an officer’s credibility, at the end of the day, cops are “human beings” with “human behaviors” who are “absolutely” capable of rehabilitation, argued Rivera. 

“There’s definitely a road to redemption,” said Rivera. 

“It might be a humbling experience for the individual, you can absolutely rehabilitate an officer. What becomes problematic is if the officer has no credibility or their truthfulness has been brought to question. That you can’t come back from.” 

Samantha Medina.
Officer Samantha Medina was busted for DWI and leaving the scene of an accident that caused injuries in 2018.
Steven Hirsch

In response to The Post’s investigation, an NYPD spokesperson said employee arrests are a “severe” concern to the department because “our members are expected to exhibit higher standards than the general public given their profession and the duties they perform each day.”

“When a member is arrested, not only do they face the potential consequences of the criminal justice system, but they are subject to additional, and fervent, scrutiny from our internal investigations and by our disciplinary system, where appropriate,” the spokesperson said. 

“Most of the events referenced [by The Post] occurred before the institution of the NYPD Disciplinary Matrix, which took effect in January 2021, and was the product of a collaborative effort with the CCRB and other interested stakeholders to ensure consistency in our process and that appropriate penalties are meted out – including termination, when necessary. The Matrix is not a static document and can be amended to address concerns and patterns seen within the disciplinary process.”

Additional reporting by Desheania Andrews, Reuven Fenton and Kevin Sheehan


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DOJ clawbacks

Incentives and Disincentives as the New Engine of Effective Compliance (Part I of III)

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Some were surprised by the recent move by the Department of Justice in focusing on the importance of incentives and disincentives as an important factor in an effective ethics and compliance program.  Others, however, had been waiting for years to this occur.  To these compliance professionals, DOJ was finally arriving, although late to the game.

If we take a step back, the issue is nothing new, although the emphasis an creative expansion of the tool to address compliance behavior is a new and welcome addition to the chief compliance officer’s toolbox.

In its infancy, DOJ stressed the need for compliance professionals to create positive incentives for ethical conduct, including awards, annual employee performance reviews, and other carrots offered to officers and employees.  At the same time, companies already focused on a strong disincentive – termination of employment.  As time went on, however, these tools in the toolbox became less effective and was a strong “motivational” force.  More was needed and perhaps appropriately, two significant enforcement actions underscored this gap in the incentive-disincentive framework.  Coupled with these two enforcement actions was the fact that DOJ’s large fines were being questioned because of their direct impact on shareholder wealth and failure to focus on the financial benefits earned by actors who committed misconduct.

Let’s start with considering two major enforcement actions that underscored the incentive-disincentive framework – the first was Wells Fargo, and the second was Novartis. 

Wells Fargo

In the Wells Fargo debacle, the bank suffered serious repercussions from its sales incentive program, referred to as the “8 for 1 program,” pursuant to which sales staff and managers were required to meet sales requirements of eight accounts for every client.  This incentive program was coupled with a strong negative reinforcement mechanism whereby failure to meet these requirements would result in immediate discipline and even firing.   The sales program skewed incentives to such  a point that numerous sales staff engaged in fraud, opened fake accounts, and ordered credit cards without the customer’s consent or even desire.  (My mother in law, a Wells Fargo customer, was a victim of this program and at age 75 found that a sales emplpoyee had ordered her 3 new Certificates of Deposit that she never requested).

At the top levels, however, the program made money for Wells Fargo and leaders earned significant bonuses and compensation notwithstanding the loss of over 5000 sales staff and sinking morale.  The culture was so rotten that eight whistleblowers who raised concerns about the program were actually terminated because of raising concerns. 

Notwithstanding its evident error, Wells Fargo continues to suffer the consequences of its failure to assess incentives and disincentives in its business.  Three CEOs have come and gone, some of the bonus money paid to one CEO, John Stumpf, was partially clawed back, and Wells Fargo continues to sit in the ethical doghouse under strict Federal Reserve monitoring and restriction on growth.  Even in the face of these challenges, Wells Fargo cannot build a basic structure of internal controls and structure to meet regulatory requirements. 

Novartis

Not to be outdone, Novartis joined the scandal-plagued club alongside Wells Fargo, when in the space of two weeks, Novartis settled an FCPA case involving foreign bribery violations in a variety of foreign countries and then two separate cases for $51 million and $677 million, respectively, for domestic bribery under the anti-kickback and False Claims Act violations.

In the FCPA case, Novartis (and Alcon) agreed to pay $345 million in criminal and civil penalties for bribery schemes in Vietnam and Greece. 

In the domestic cases, Novartis paid $51 million to settle illegal use of three foundations use to funnel co-payments of Medicare patients taking Novartis’ drugs Gilenya and Afinitor, which are used to treat relapsing multiple sclerosis and advanced renal cell carcinoma, respectively.  Novartis payments constituted kickbacks that were intended to increase usage of its drugs by paying patients’ co-payment obligations.

In the second matter, Novartis paid $677 million for paying bribes to doctors to prescribe approximately eleven Novartis drugs using a pervasive and corrupt speaker program.  The blatant bribery scheme was built around incentivizing doctors to prescribe Novartis drugs by paying them for so-called educational events at lavish restaurants, wineries, golf clubs and other sports venues.  For example, Novartis held sham events on 75 occasions at Hooters.  Some of the events, for which physicians were pai, never even occurred.

In response to these scandals, Novartis put in place a new and important compensation program to incentivize compliant behavior.  Under this plan, Novartis senior management was barred from receiving any bonus payment in addition to their salary without satisfying comprehensive ethics and compliance mandates.  These requirements extended beyond those basic measures, such as attending mandated training, meeting compliance procedures and policies, and other stanard expectations.  In other words, to unlock access to substantial bonus payments, senior manager were required to meet specific compliance requirements.

Novartis took this access to bonus carrot (or stick however you interpret it) and used it to leverage compliant behavior. 

Both the Wells Fargo and Novartis cases highlight the impact that incentives and disincentives may have beyond the standard set of tools.  In each case, tweaking these tools created either significant risks of non-compliant behavior or created a backstop to ensure compliant behavior. 

DOJ and the compliance community our new on the verge of breaking out new tools, incentives and disincentives through the ongoing consultation process.  Where it all ends up will be interesting and more changes are sure to come as DOJ and the compliance community gains experience in this area.


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Knoxville police investigating after body found in vacant school building

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Stock image Knoxville Police Department KPD Cruiser Squad Car Dodge Charger

Stock image Knoxville Police Department KPD Cruiser Squad Car Dodge Charger

Knoxville police officers are working to identify a body found Monday morning inside a vacant school building in the Parkridge neighborhood.

There are no obvious signs of foul play, a police department spokesperson said in a press release.

Officers responded to the Knoxville Baptist Christian School property on 2434 E. Fifth Ave. at about 10:20 a.m., the release stated. According to the release, they had received a report that human remains were found inside the vacant building.

Investigators and Medical Examiner’s Office personnel responded and the remains were taken to the Regional Forensic Center.

This article originally appeared on Knoxville News Sentinel: Knoxville police investigating after body found in vacant building


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Police identify man killed in Pflugerville apartment shooting

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Police have identified a man killed in a shooting at a Pflugerville apartment complex on Nov. 22 as Richard Gomez. Investigators have a suspect who is “being cooperative,” police said.

Officers were called to a disturbance at 6:36 p.m. on Nov. 22 at the Stoneridge Apartments, 16701 N. Heatherwilde Blvd., officials have said. When they arrived, they found Gomez dead from a single gunshot wound, police said.

Pflugerville police are investigating the fatal shooting of a man at an apartment complex.

Pflugerville police are investigating the fatal shooting of a man at an apartment complex.

The Pflugerville Police Department is working with the Travis County district attorney’s office to investigate the shooting.

Armed female driver killed by DPS trooper identified as Pflugerville resident

This article originally appeared on Austin American-Statesman: Police identify man killed in Pflugerville apartment shooting


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