by Brian Mahany
Virtually all of our whistleblower stories relate to the federal False Claims Act. President Lincoln proposed the law during the Civil War as a way of helping the government recover millions of dollars lost to fraud. Bad rations, soggy ammunition and lame mules were just some of the ways private vendors ripped off the Union Army.
Under the false claims act, private citizens were authorized to bring a suit in the name of the United States an could keep a percentage of what was recovered. Although the feds invented the law, many states have since adopted similar laws. Included on that list is New York.
We rarely hear about state whistleblower claims but they exist and can be very lucrative for the folks coming forward with information. In New York State, Attorney General Eric Schneiderman recently announced the state settled a state whistleblower claim for $5 million. Assuming the whistleblower receives 20 to 25% of that settlement it means a payday of at least $1 million!
According to the Attorney General’s Office, Mohanbhai Ramchandani pleaded guilty to felony tax evasion charges and agreed to pay $5.5 million in restitution. He also faces 3 years in prison when sentenced later this year.
Tax evaders are often caught because of whistleblowers. Many folks just don’t like knowing that someone is getting a free ride on their taxes. They believe that if they must pay so should everyone else. Tax whistleblowers can also be pissed off former employees and jilted spouses.
If you have tax problems think twice before firing problem employees. Better yet, come into compliance before getting caught.
“There are no excuses for tax cheats – regardless of how prominent they are. Mr. Ramchandani’s conviction for orchestrating this multi-million dollar scheme to defraud taxpayers sends a clear message that those who rip off the public will be held accountable for their crimes,” said the Attorney General. “Honest citizens are harmed by people who break the law to avoid paying their fair share, making it harder for New York State to provide essential services. This office will continue to bring aggressive action against tax evaders who believe they are above the law.”
Schneiderman also acknowledged the case was initiated by a whistleblower. Unlike some whistleblower programs, those who report tax cheats can often remain anonymous.
If you have inside information about fraud that causes a loss to taxpayers, you may qualify under the False Claims Act as a whistleblower. Under state and federal laws, whistelblowers are entitled to a portion of whatever the government collects. In our opinion, whistleblowers are the new American heroes and represent our best tool in the battle against fraud and tax evasion.
For more information, contact attorney Brian Mahany at or by telephone at (direct). All inquiries are protected by the attorney – client privilege and kept in strict confidence. Our whistleblowers attorneys represent people across the United States. We currently represent the whistleblower in the largest false claims case anywhere in the U.S. against a lender or bank; HUD’s $2.4 billion case against Allied Home Mortgage.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and San Francisco, California. Services available in many jurisdictions.
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