Whistleblower Tips Critical for Regulators Seeking to Minimize Misconduct in Opaque Cryptocurrency Markets 

The crypto space has seen a lot of publicity these days.  The catastrophe which is the FTX bankruptcy highlights the cryptocurrency market’s susceptibility to fraud given its unregulated nature, and the fact that much of it is ostensibly overseas and otherwise opaque in its mechanics.  In the face of this, investors are susceptible to exploitation and losses.  In the case of FTX, investors and creditors are owed billions of dollars according to initial filings in the bankruptcy proceedings.  FTX may be just the start of things.

Co-Managing Partner David Kovel Speaks at 22nd Annual Coalition of Civil Advocates Conference

Co-Managing Partner David Kovel spoke at the 22nd annual Coalition of Civil Advocates conference on Friday, November 11, 2022. The event was an informal plaintiff’s lawyer convention hosted by the Louisiana-based litigation team at Fishman Haygood.

Co-Managing Partner David Kovel speaks at 22nd Annual Taxpayers Against Fraud Conference on October 26, 2022

Co-Managing Partner David Kovel recently spoke at the 22nd annual Taxpayers Against Fraud (TAF) conference on Wednesday, October 26, 2022. TAF is a non-profit, public interest organization committed to supporting and encouraging whistleblowers who reveal fraud in government and financial markets.

Partner Randall Fox quoted in Tax Notes article on Washington D.C. and New York tax whistleblower laws

In a September article, KM partner Randall Fox is quoted sharing his expertise on tax whistleblower cases. Mr. Fox’s comments are included in an article in Tax Notes written by Andrea Muse regarding the first publicly-disclosed case filed under Washington D.C.’s False Claims Act (FCA). The District amended its FCA in 2020 to allow tax whistleblower claims in addition to other claims that the District government was damaged by fraud. 

Partner Randall Fox’s Whistleblower Case under the False Claims Act Results in Indictment of Long Island Doctor

New York Attorney General Letitia James is pursuing criminal charges that were first brought to light by a False Claims Act lawsuit filed by Kirby McInerney partner Randall Fox on behalf of a whistleblower client against a Queens, New York radiologist and his company.

Kirby McInerney Partner Randall Fox Speaks on Federal Bar Association Roundtable on Tax Whistleblowing

Partner Randall Fox spoke as a panelist during the Federal Bar Association Qui Tam Section Roundtable on Wednesday, July 27th, 2022. Mr. Fox was joined by Andrea Fischer, Robert Gardner, Michelle Merola, and Richard Neuworth as they discussed Tax Whistleblowing at the Federal and State Level.

Randall Fox Comments to Law360 Regarding Passage of Tax Whistleblower False Claims Act Expansion

Partner Randall Fox discussed with Law360 New York lawmakers' recent passage of an amendment to the New York False Claims Act to close a loophole in the state’s tax whistleblower law by permitting actions against corporations and wealthy individuals who knowingly fail to file New York tax returns. 

Nearly $200 Million CFTC Whistleblower Award for Helping Government Regulators Obtain Recoveries from Global Banks for Interest Rate Manipulation
 

CFTC Whistleblower Program award of nearly $200 million in connection with recoveries from global banks that manipulated benchmark rates.

Kirby McInerney's Randall Fox Named "Whistleblower Lawyer of the Year"

The law firm of Kirby McInerney LLP is pleased to announce that partner Randall Fox has been named the 2021 “Lawyer of the Year” by the Taxpayers Against Fraud Education Fund (“TAFEF”), which is the leading public advocacy group for whistleblowers.  

New York False Claims Act & Tax Whistleblower Podcast

Did you know there is more than one False Claims Act? States all across the country passed their own versions, with some being even more robust than the original law!

On today’s Fraud in America, we examined New York’s False Claims Act, which has a provision allowing whistleblowers to alert the state to tax frauds. Randy Fox and David Koenigsberg are two lawyers who’ve won big tax cases, recovering millions of dollars for the state. They discuss how the New York False Claims Act works, how these cases are different from typical False Claims Act cases, and whether this law could work at a federal level.

CFTC Whistleblower Program in Peril Over Potential $100 Million-Plus Payout

The Commodity Futures Trading Commission’s whistleblower program is in turmoil over a potential payout exceeding $100 million to a former Deutsche Bank AG executive—one so large it would deplete the agency’s whistleblower funds and has led it to seek congressional action.

NY Panel OKs Bill To Expand Scope Of Tax Whistleblower Law

Md. Lawmakers OK Bill For IRS-Like Whistleblower Plan

Maryland residents who suspect tax fraud would be able to tip off the state tax agency and receive a monetary reward if the agency recovered money, in an IRS-like program approved by state lawmakers and sent to the state's governor.

Five Tax Whistleblowing Fallacies

In 2010, New York amended its False Claims Act to enable whistleblowers to sue individual and corporate defendants with a net income or sales exceeding $1 million that cheated on their taxes in excess of $350,000. Other states are considering similar legislation. Randall Fox of Kirby McInerney LLP debunks some common fallacies regarding the New York law.

Kirby McInerney Announces $105 Million Settlement of New York False Claims Act Tax Whistleblower Case Against Hedge Fund Billionaire

Kirby McInerney LLP has, on behalf of its whistleblower client, settled the largest income tax case to date under the New York False Claims Act against hedge fund manager Thomas Sandell and his hedge fund management company

Facilitating Tax Fraud? Sotheby’s Faces a New York False Claims Act Action

New York state is going after businesses that help their clients and customers avoid taxes using the state’s False Claims Act. The targets include such esteemed businesses as Sotheby’s and its wealthy clients. Randall Fox of Kirby McInerney tells how Sotheby’s allegedly ran afoul of the Act and explains how the state is pursuing facilitators of tax fraud.
By Randall M. Fox

3 Takeaways from NY's False Claims Act Tax Law

Law360 (August 11, 2020, 3:06 PM EDT) — From adding more than half a billion dollars to state coffers to changing the way state tax lawyers practice, allowing tax whistleblower lawsuits in New York has profoundly affected the state tax landscape. The Capitol in Albany, New York, where 10 years ago the state's False Claims Act was extended to tax matters.

Kirby McInerney Calls on Whistleblowers to Combat Fraud in Connection with Coronavirus (Covid-19) Relief

Wars and disasters generally bring forth the best in people – courage, heroism, solidarity. Unfortunately, however, calamities also present irresistible opportunities for corruption and fraud among those who would take advantage. Now, it is feared that the massive government spending that is being deployed to fight the coronavirus pandemic may spur new exploitative schemes, potentially diverting billions of dollars of government funds intended to help virus victims and stimulate the economy into the pockets of scammers.

Kirby McInerney Announces Settlement of a False Claims Act Whistleblower Suit against Compounding Pharmacy FPR Specialty Pharmacy and Its Owners

Kirby McInerney LLP has settled a significant False Claims Act case on behalf of a whistleblower client against a compounding pharmacy FPR Specialty Pharmacy, its owners Christopher Casey and Billy Rue, and affiliated business Mead Square Pharmacy, all from the Rochester, New York area.

California, Michigan, D.C. Eye Revenue From Tax Whistleblowers

Kirby McInerney Partner Randall Fox was quoted in this Bloomberg Tax article about tax-related false claims suits. California, Michigan, and the District of Columbia are considering bills that add tax code violations to the list of actionable frauds coming under their false claims laws. Mr. Fox notes that New York’s tax whistleblower law has resulted in “very stong and important cases.”

California, Michigan, D.C. Eye Revenue From Tax Whistleblowers

Legislation giving whistleblowers wider opportunities to expose big-ticket tax frauds is getting attention in a small group of states—inspired in part by data showing New York’s law has netted nearly $500 million.

JP Morgan Whistleblower Case Tests Unclaimed Property Compliance

Unclaimed property operations and compliance managers at US financial firms will soon find out that the task is more difficult than they thought should JP Morgan Chase lose its appeal of a New York civil court judge’s ruling about the bank’s required interest payment on unclaimed accounts reported late to New York State.

Kirby McInerney Settles Moody’s Captive Fraud Case

Moody’s has reached a settlement with New York-based law firm Kirby McInerney after it was accused of underpaying New York State and New York City business taxes between 2002 and 2014. Moody’s is alleged to have mischaracterised its income as premiums to its captive, Moody’s Assurance Company (MAC).

Treasure hunter helps companies, residents recover 'lost' money

Jared Vale unearthed $15 million in cash for the bankrupt Lehman Brothers, $1 million in stock from the profit-sharing plan of a company acquired 20 years ago by textbook publisher Pearson and scores of other windfalls.

4 Takeaways From Sprint's $330M Tax FCA Settlement

In late December, the New York Attorney General’s Office announced that it had settled the long-running New York False Claims Act whistleblower case against cell phone giant Sprint Nextel Corporation for $330 million. It was the largest ever settlement under any state false claims act, and it invoked a provision on tax violations that other states have yet to enact. The Sprint settlement raises several important points about whistleblower cases under the New York False Claims Act.

Sprint To Pay NY $330M In Tax FCA Case, $63M For Tipster

Mobile giant Sprint Corp. will pay $330 million to resolve a New York False Claims Act suit that accused the company of shirking $100 million in state taxes, with almost $63 million of that sum going to a whistleblower, the state attorney general said Friday.

Spa Castle to fork over $2.5 million: AG

Settling with the state, Spa Castle is going to pay $2.5 million in civil damages and criminal restitution over a tax fraud scheme, New York Attorney General Barbara Underwood and Acting Department of Taxation and Finance Commissioner Nonie Manion announced last Thursday.

Citigroup Whistleblower Tax Case Dismissed by N.Y. Appeals Court (1)

Citigroup Inc. has finally put a whistleblower lawsuit behind it after a mid-level New York appeals court dismissed a case that could have cost the company $800 million in state taxes.

How Schneiderman Changed Tax Fraud Enforcement in New York

Eric Schneiderman’s tenure as a New York state senator and the state's attorney general changed the face of New York's False Claims Act (FCA), but practitioners say his sudden resignation is not expected to change the way the attorney general's office enforces the act.

Tax Qui Tams Reach Maturity

New York’s False Claims Acts allow individuals to pursue qui tam whistleblower suits against delinquent taxpayers. In this article, Kirby McInerney LLP’s Randall M. Fox discusses New York’s tax qui tam experience and how it aids tax enforcement and compliance.
By Randall M. Fox

FCA Memo No Proof Of New DOJ Direction On Dismissals

Law360, Nashville (January 25, 2018, 10:07 PM EST) — A recently leaked memo setting out circumstances for when U.S. Department of Justice attorneys should use its rarely invoked authority to ask for “meritless” qui tam False Claims Act cases to be dismissed could foreshadow a more aggressive DOJ approach to dismissals, but proof will only come from seeing its future actions, attorneys said.

First Estate Tax Case Filed Under N.Y. Whistleblower Law

(Bloomberg Law) — New York's first unsealed qui tam estate tax case has been filed by a whistleblower alleging that a deceased physician falsely claimed to reside in Florida. The whistleblower, Doreen L. Light, alleged that the estate of Dr. Myron R. Melamed owes at least $1.7 million in estate taxes to New York.

Tax Nonfilers Face Potential Liability Under New York FCA

A recent, little-noticed decision in the New York Supreme Court has confirmed that the tax provisions of New York’s False Claims Act apply not only to persons and companies that cheat on the tax returns they submit, but also to those who knowingly skirt their obligations by entirely failing to file any New York tax returns.
By Randall Fox and Adam Pollock

FCA Cases Protect Claims by Relying on NY’s Favorable Pleading Standard

Fraud-related claims usually must be pled with particularity. But in a little-noticed provision at the end of New York’s False Claims Act, Sec.192(1-a), the New York legislature provided for a lower pleading hurdle when asserting violations of New York’s FCA in state court. In federal court, in contrast, FCA cases are evaluated under the heightened pleading standard embodied in Federal Rule of Civil Procedure 9(b).
By Randall Fox and Adam Pollock

6 Years of Tax Qui Tams in New York

In this viewpoint, Fox looks back at six years ofNewYork tax enforcement through qui tam lawsuits. He concludes that the abuses predicted by opponents of the law have failed to materialize and that the statute, which allows tax recovery suits by private citizens, appears to have generated a good return on the investment.
By Randall Fox

Qui Tam Plaintiffs’ Bar Expects Increase in New York Whistle-Blower Cases

Bloomberg BNA quoted Kirby McInerney partner Randall M. Fox, former New York Attorney General Bureau Chief, in an article addressing a high profile whistle-blower tax case against Sprint Nextel Corp. for the company’s alleged failure to collect and pay sales taxes on flat-rate calling plans, and why the plaintiffs’ bar expects more of these types of cases to be filed.

Tax Fraud And The FCA: 4 Takeaways From NY's Sprint Ruling

On Oct. 20, 2015, the New York Court of Appeals affirmed that the New York attorney general could continue a whistleblowerinitiated tax False Claims Act case alleging that Sprint Corp. knowingly failed to collect and pay more than $100 million in New York state and local sales taxes on its flat-rate monthly cell phone charges.[1] The decision brought to a close the motion practice about the sufficiency of the pleadings in the first taxrelated case under the New York False Claims Act to go public.

Presenting a False Claims Act Case: Back to Basics

By offering incentives to report on fraud, the False Claims Act creates a public-private partnership. The whistleblower, as the private partner, can and should carefully select and vet the claims and file the good ones. This article addresses how whistleblowers’ counsel can make their cases more attractive to the government thereby increasing the likelihood of intervention.

Qui Tam Troubles, Part IV: Does New York Have the Answer?

This article discusses New York’s approach to tax fraud suits, which is being heralded as a possible model for both state and federal regimes.
By Randall Fox