New York AG Settles Tax Fraud Case against Lantheus Medical Imaging For $6.2 Million

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Lantheus Medical Imaging Inc. – formerly, Bristol-Myers Squibb Medical Imaging – recently agreed to pay $6.2 million to settle a qui tam suit alleging that it committed tax fraud. The plaintiff, a Lantheus tax servicer, alleged that Lantheus violated the New York False Claims Act by failing to pay New York State corporate franchise taxes, New York State Metropolitan Transportation Authority surcharges, and New York City corporate taxes, during the period 2002 to 2006. The case was filed under seal two years ago, and settled while still under seal. The qui tam plaintiff will receive $1,137,814.80 of the settlement proceeds.

New York State Attorney General Eric Schneidermann commented that “Lantheus’ failure to pay these taxes was indefensible,” and further declared that “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.” The qui tam filing caused the New York Attorney General to conduct an investigation of the allegations of tax fraud. Based on that investigation, the Attorney General concluded that Lantheus knowingly failed to pay more than $2.2 million in state and city taxes.

This case is likely one of many filed after New York amended its False Claims Act to reach tax fraud. This settlement follows the New York AG’s recent success in defeating a motion to dismiss another tax fraud case (People ex rel. Empire State Ventures, LLC v Sprint Nextel Corp., 41 Misc 3d 511, 970 NYS2d 164 [Sup Ct NY County], affd, 114 AD3d 622, 980 NYS2d 769 [1st Dept 2014]), and is likely to spawn similar suits and settlements.

 

Topics:  Franchise Taxes, Qui Tam, State Taxes, Tax Fraud

Published In: Business Torts Updates, Civil Remedies Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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