Bryan Cave Partner Accused of Telling Whistleblower to Lie to the FTC

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Summary: LabMD is suing Bryan Cave and attorney Mary Beth Buchanan. 

A lawsuit was filed in New York last month that claims a Bryan Cave partner unethically prevented a whistleblower from reporting a misdeed to the Federal Trade Commission.

  

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The plaintiff LabMD sued Mary Beth Buchanan and law firm, Bryan Cave Leighton Paisner LLP on April 28. Buchanan joined Bryan Cave in 2013 as a partner.

According to Bloomberg Law, “A little-noticed lawsuit filed in New York federal court last weekend accuses a former federal prosecutor of unethically preventing a whistleblower from telling the FTC that he hacked an embattled company’s files using “FBI surveillance software” that the prosecutor gave him.”

LabMD said that Buchanan, who was a former U.S. Attorney before joining Bryan Cave, gave FBI surveillance tools to Tiversa Inc., which in turn used that technology to hack LabMD and upload the hacked information online.

LabMD was a cancer-screening lab that eventually went out of business after it was discovered its patient information was found online. LabMD said that they were hacked by Tiversa, a cybersecurity company, and that Tiversa reported them to authorities after LabMD refused to pay for their services.

LabMD said that Tiversa engaged in a “shakedown scheme” against them and that Buchanan was involved with the coverup. As part of LabMD’s complaint, they showed a letter from Tiversa’s owner, Robert J. Boback, offering “remediation” services, which LabMD refused.

In the complaint, it stated that Buchanan obtained cyber hacking tools during her role as a U.S. Attorney and that she had supplied this technology in 2007 to Tiversa, who used it against LabMD years later. The plaintiffs allege that Buchanan was guilty of negligent and fraudulent admissions.

The plaintiff said that they learned of the Tiversa hacking because of a former employee’s testimony. Ex-Tiversa employee Richard Wallace was represented by Buchanan in 2015, but he made a deal with the FTC for immunity after refusing to lie for his employer. As part of his cooperation, he stated that Buchanan was linked to Tiversa since 2007 and that she had tried to cover her role in the hacking.

Wallace said that Buchanan gave Tiversa cyber surveillance software to catch child pornographers, and in LabMD’s lawsuit, they stated that it was this software that Tiversa used to hack their system. Wallace said that as his lawyer Buchanan had advised him to lie, but he had refused.

“Buchanan’s self-interest in keeping her violation of [Ethics in Government Act] secret and her participation in Tiversa’s wrongdoing was so extreme that she was willing to jeopardize her client’s immunity by directing him to omit critically important and material facts from his testimony,” the suit stated.

ABA Journal said that Buchanan is no longer listed on Bryan Cave’s website.

UPDATE MAY 22, 2018 3:30PM

On May 22, Richard Wallace issued a statement to JD Journal regarding the lawsuit filed by LabMD CEO Michael Daugherty.

“I have read the irresponsible and reckless allegations in the complaint filed by Mike Daugherty against Bryan Cave Leighton Paisner LLP and Mary Beth Buchanan. None of the allegations contained in the complaint are true,” Wallace said. “It saddens me that Mike Daugherty would file such a baseless complaint against my counsel in the FTC Action.”

“The false allegations contained in the lawsuit are upsetting because Bryan Cave Leighton Paisner LLP and Ms. Buchanan’s legal representation on my behalf was always outstanding,” Wallace continued. “Mr. Daugherty continues to harass my wife, Amy, and me by way of repeated telephone calls, emails, and text messages. When Amy and I blocked Mr. Daugherty’s phone number from contacting us, he proceeded to message us on Facebook. Amy and I do not want to have any contact with Mr. Daugherty.”

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