It’s not yet confirmed, but the case of a woman who is claiming that her former boss, a deceased county pathologist, did not pay state income or estate taxes, might be the state’s first unsealed qui tam estate tax case.
According to a suit filed in New York, a Westchester County pathologist, now deceased, is being accused by his former employee of evading payment of income and estate taxes. The New York Law Journal reports that Myron Melamed misrepresented that he was living and working full time in New York, as detailed in its article, “Suit Is Filed in NY's First Unsealed Qui Tam Estate Tax Case.”
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.
One attorney, who is not associated with the case but focuses his practice on FCA cases, remarked that he has never heard of an unsealed estate tax whistleblower case in New York.
Melamed’s son David Melamed, who is also a defendant in the case, said that he had not yet learned about the lawsuit and declined comment.
Reference: New York Law Journal (January 19, 2018) “Suit Is Filed in NY's First Unsealed Qui Tam Estate Tax Case”