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Financial Fraud Law

Whistleblower Nets $1.1 Million in False Claims Act Case against Bristol-Myers Squibb

 New York has reached a $6.2 million settlement of a whistleblower case alleging that a medical imaging company that made millions of dollars’ worth of sales in New York knowingly evaded New York State and New York City taxes. 

The whistleblower in the action will receive $1,137,814.80 from the settlement proceeds.

The complaint alleged that Lantheus Medical Imaging Inc. and its former parent company, Bristol-Myers Squibb, 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, the complaint alleged.

The action was started by the May 2012 filing of a whistleblower, or “qui tam,” complaint in a trial court in Manhattan by a tax services provider. A subsequent investigation by the New York Attorney General’s office concluded that Lantheus knowingly had failed to pay more than $2.2 million in New York State and city taxes. 

“Lantheus’ failure to pay these taxes was indefensible,” said Attorney General Eric T. Schneiderman.  “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. This resolution makes a huge difference for hardworking New Yorkers who pay their taxes and play by the rules.”

Thirty states and the federal government have passed False Claims Acts, but only New York’s expressly covers tax fraud. 

The whistleblower was represented by David Caputo of the law firm Kline & Specter, P.C. The state’s investigation was conducted by Assistant Attorney General Daniel Smirlock, Legal Support Analyst Devin Gould, Deputy Bureau Chief Scott Spiegelman, and former Bureau Chief Randall Fox of the Attorney General’s Taxpayer Protection Bureau (TPB). TPB is part of the Attorney General’s Criminal Justice Division, led by Executive Deputy Attorney General for Criminal Justice Kelly Donovan.

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