Those who fail to pay their fair share hurt us all and the recent hefty settlement that New York made with a John F. Kennedy International Airport-based food service company over failure to pay state taxes is a favorable outcome, thinks New York-based lawyer Jeffrey Benjamin. The fact that the investigation into five years of alleged fraud was triggered by a whistle-blower is also encouraging, says Mr. Benjamin, whose background in consumers’ rights and deceptive practices in New York lends him considerable insight into the legal strategy and result employed here.
According to the New York State Attorney General’s Office, the “scheme” employed by Express Hospitality Group and businesses under its umbrella meant that it “intentionally” underpaid some $5 million in taxes that it owed to New York. Further, the attorney general’s office states that the business group also underpaid $350,000 to the Port Authority of New York and New Jersey. Lawyer Jeffrey Benjamin, who has tried cases under the New York Deceptive Practices Act and New Jersey Consumer Fraud Truth in Consumer Contract and Warranty acts, is clearly quite familiar with the laws on the books in both states. Speaking of books, the New York attorney general’s office claims that the business group’s companies kept two sets of books that detailed the financial workings. Authorities claim that the companies collected state and city sales taxes, failed to withhold taxes on employee payments and under-reported receipts. The business group also failed to pay up on those taxes and drew the personal ire of New York State Attorney General Eric T. Schneiderman in an October 2017 press release.
“For years, Express Hospitality Group disregarded state law and New York taxpayers,” said Schneiderman, whose office noted that the whistle-blower came forward with claims that would later be tried under New York State’s False Claims Act. “Today’s felony conviction and settlement should send a clear message to those attempting to avoid paying their fair share: tax evasion is illegal, disgraceful – and it will not be tolerated.”
Mr. Benjamin has handled whistleblower cases in the past. Such cases can sometime result in substantial recoveries for the person who volunteers the non-public information about the fraud on the government. Armed with two decades of trial courtroom, Mr. Benjamin says that New York was right to seek a substantial financial settlement from this service company. For those in the know who suspect something shady is afoot, Mr. Benjamin suggests that you come forward and help shine a light on those secrets. Whistleblower, also known as Qui Tam cases, are sometimes easier to prosecute since the government, along with its vast resources, preferably becomes a partner in the litigation.