A medical imaging company that shortchanged New York City and the state on taxes has agreed to pay $6.2 million under a whistleblower claim.
The settlement with Lantheus Medical Imaging resulted from a false claims act case and used a unique provision written by Attorney General Eric Schneiderman when he was a state senator. The federal government and 30 states have false claim acts that allow prosecutors and whistleblowers to take legal action against individuals and businesses that defraud the government. But only New York expressly includes tax fraud.
In this matter, Schneiderman accused Lantheus and its former parent company, Bristol-Myers Squibb, of not paying $2.2 million in state business franchise taxes, New York City corporation taxes or MTA surcharges from 2002 to 2006. The action began in May 2012 with the filing of a qui tam, or whistleblower complaint, by a tax services provider who had learned of the company’s failure to pay taxes.
Under the false claims act, wrongdoers are liable for treble damages, which in this case will cost Lantheus an extra $4 million. The whistleblower in the case will receive $1,137,815 under a provision that allows up to 30 percent of a recovery to go to whistleblowers.
“It’s simple—corporations doing business in New York are obligated to pay taxes on their earnings, and those companies that fail to do so will be held accountable,” Schneiderman said in a statement.
Kline & Specter partner David Caputo of Philadelphia, who represents the whistleblower, said in a statement that the settlement “demonstrates the enormous good that private whistleblowers, their counsel and our partners in government can accomplish together for the taxpaying public.”
The investigation was spearheaded by Assistant Attorney General Daniel Smirlock.