“A whistleblower has filed a suit accusing her former employer, a late Westchester County pathologist, of evading New York income and estate taxes, in what is believed to be the state’s first unsealed qui tam estate tax case.”
In New York, a whistleblower has filed a suit accusing her former boss of evading state income and estate taxes. In what’s thought to be the state’s first unsealed qui tam estate tax case, a deceased Westchester County pathologist, Myron Melamed, is accused of misrepresenting to the state that he lived in Florida while living and working full time in New York.
The New York Law Journal’s details the complaint in its article “Suit Is Filed in NY's First Unsealed Qui Tam Estate Tax Case.”
Adam Pollock of Ford O’Brien filed the complaint in Manhattan Supreme Court on behalf of Doreen Light.
Melamed died in 2013.
The qui tam case against him was filed in 2014, but was kept under seal until January 16, while the case was under government investigation.
A qui tam lawsuit is a kind of whistleblower lawsuit brought under the False Claims Act. The law rewards whistleblowers in successful cases, where the government recovers funds lost to fraud.
Light brought her claims as a plaintiff-relator for the state, alleging that New York is entitled to roughly $2 million in damages. That amount could be trebled under the FCA, plus $12,000 in civil penalties per violation.
“As alleged in the amended complaint, the fraud here is stark and the doctor’s weak attempts to cover it up won’t survive the scrutiny that justice will bring to bear,” Pollock said.
New York State Attorney General Eric Schneiderman’s office didn’t file to intervene in the case. Pollock didn’t say if the office gave a reason as to why it’s not joining the action.
Most FCA claims involve health care spending, like Medicare or Medicaid fraud. There are numerous reasons why a state attorney general wouldn’t intervene in a case, aside from thinking it won’t prove successful.
The Attorney General may need to devote resources elsewhere or may think that a private attorney could handle the matter competently.
Reference: New York Law Journal (January 19, 2018) “Suit Is Filed in NY's First Unsealed Qui Tam Estate Tax Case”