Charles Erhart worked as an internal auditor for BofI Federal Bank in San Diego, California. The Bank is a federally chartered savings and loan association and its holding company is publicly traded (i.e. under SEC oversight). It provides financing for residential properties and small- to-medium size businesses. It also purchases “specialty finance receivables,” such as payment streams from structured court settlements and lottery winnings.

As a part of the Bank’s Internal Audit Department, Erhart monitors and reports on the Bank’s internal controls. He reported to the Office of the Comptroller of the Currency (“OCC”), the Bank’s primary regulator. Erhart reported directly to the Vice-President of Internal Audit and manager of the Internal Audit Department, who in turn reported to the Senior Vice President of Audit and Compliance (SVP).

During his 18-month tenure, Erhart claimed to have discovered conduct he believed to be wrongful, which he reported to the Bank’s primary regulator. Some of these included Corrupted Structured Settlements & Lottery Audit, Altered Financial Statements, Misleading Response to SEC Subpoena, and Unauthorized Risky Loans.

Erhart claimed that the SVP stated, in the presence of others, “If [Erhart] continues to turn over rocks, eventually he is going to find a snake and he’s going to get bit.” Erhart viewed this statement as a threat and he became concerned for his personal safety. The SVP and the CEO also allegedly stated that Erhart’s “...

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