Lantheus Medical Imaging Inc. and its former parent company, Bristol-Myers Squibb, will pay $6.2 million to settle a whistleblower case alleging that the company made millions of dollars’ worth of sales in New York and knowingly evaded New York State and City taxes.
New York Attorney General Eric Schneiderman alleged that the company did not pay applicable New York State business franchise taxes, New York City corporation taxes or MTA surcharges from 2002 to 2006, when Lantheus was known as Bristol-Myers Squibb Medical Imaging.
During that period, the company derived substantial revenues from its sales of medical imaging products to hospitals, clinics and other facilities in New York and from its training and servicing activities in connection with its sales.
“Lantheus’ failure to pay these taxes was indefensible,” said Attorney General Schneiderman. “It’s simple – Ccorporations 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. This resolution makes a huge difference for hardworking New Yorkers who pay their taxes and play by the rules.”
The action was started by the May 2012 filing of a whistleblower, or “qui tam,” complaint in State Supreme Court in Manhattan 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.
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 as a result of a landmark law authored by then-State Senator Eric T. Schneiderman.
In 2011, as one of his first acts in office, Attorney General Schneiderman created a Taxpayer Protection Bureau, which works with whistleblowers and enforces the False Claims Act in tax and other government fraud cases.
“This settlement demonstrates the enormous good that private whistleblowers, their counsel and our partners in the government can accomplish together for the taxpaying public,” said David Caputo of the law firm of Kline & Specter. Caputo represented the whistleblower. “It took courage for our client to come forward, and we applaud the Attorney General’s Office for acting on our client’s information as promptly and effectively as it did in this case. New York is a model for all states to follow in its commitment to the public-private partnership that makes outstanding results like this possible.”