United Airlines is blaming a “computer glitch” for a massive network crash that grounded planes all over the country on June 17th, left 2,500 passengers stranded in Los Angeles alone, and shut down the airline’s entire operation – including its website – for five hours.
However, months earlier, maintenance worker Paul Simkus predicted what UAL refers to as “a network connectivity issue” in his Sarbanes-Oxley lawsuit, accusing the airline of falsifying inspection reports for the airline’s major data center, located in its eight-story World Headquarters and Executive Training Center in Elk Grove Township, Illinois.
“United was pencil-whipping the inspection reports. It was my job to inspect the cooling towers every day. They were frozen like a snow cone machine,” Simkus told The Examiner.
A copy of Simkus’ federal lawsuit obtained by The Examiner accuses the airline of altering or falsifying records during facility maintenance inspections and a federal audit, including a number of asbestos release incidents Simkus says he personally reported between 1999 and 2009. However, United reportedly did not inform shareholders even though during that same time period, the Occupational Safety and Health Administration fined UAL $192,500 for willful disregard of employees’ health.
Although the incident reports represent a large future liability, and SOX requires that all information that might have a material effect on a company’s financial condition be disclosed to potential shareholders, the lawsuit accuses former CEO Glenn Tilton of signing off on 8-K and 10-K financial reports that artificially inflated United’s assets by not mentioning them or other maintenance issues.
Simkus also claims that he suffered retaliation and a forced transfer as a result of his whistleblowing – which is forbidden under SOX.
Steven J. Pearlman, one of the top SOX attorneys in the country, has been retained to defend the airline against Simkus, who is representing himself pro se. This is not the first time United has been accused of SOX violations. Former pilots claim that management falsified financial records during bankruptcy so the airline could dump its pension liabilities on taxpayers.
In a curious twist, The Examiner obtained a copy of an April 21 docket entry filed by the clerk for the U.S. District Court, Northern District of Illinois indicating that the case (11-cv-021650) would be consolidated and transferred from the courtroom of Judge Amy St. Eve to Judge Gary Feinerman.
But two weeks later, court documents show, Pearlman informed Judge Feinerman that he had never been served a copy of the complaint. Feinerman then ordered Simkus “to serve defendant with complaint…” but this was after it had already been transferred to Feinerman’s courtroom in an apparent violation of the Federal Rules of Civil Procedure -- how did the court consolidate and transfer a case that didn’t procedurally exist yet?
Meanwhile, a court clerk told The Examiner that Simkus’ case was never posted on the court’s website, even though other federal cases are easily accessible to the public there.