Lantheus Medical Imaging Inc. and its former parent company Bristol-Myers Squibb a medical imaging company that made millions of dollars’ worth of sales in New York knowingly evaded New York State and City taxes according to the NY Attorney General. Those companies have agreed to pay $6.2 million to resolve the assertions.
The action was started by the May 2012 filing of a whistleblower, or “qui tam,” complaint in State Supreme Court in New York by a tax services provider who became aware of Lantheus’ failure to pay New York taxes. Attorney General Schneiderman’s subsequent investigation concluded that Lantheus knowingly failed to pay more than $2.2 million in New York State and City taxes.
This settlement is the latest tax-related recovery resulting from an action filed under the New York False Claims Act. The Act is one of the state’s most powerful civil fraud enforcement tools because it allows whistleblowers and prosecutors to take legal action against companies or individuals that defraud the government. Persons found liable under the False Claims Act must pay triple damages, penalties and attorneys’ fees. Under the False Claims Act, whistleblowers may be eligible to receive up to 30 percent of any money recovered by the government as a result of information they provide. The whistleblower in this action will receive $1,137,814.80 from the settlement proceeds. The City of New York will receive $693,143.04.
Thirty states and the federal government have passed False Claims Acts, but only New York’s expressly covers tax fraud . However, other states are now considering enacting similar laws to cover sales tax fraud and income tax fraud.
Jeff Newman represents whistleblowers.