New York False Claims Act
Any person may bring a qui tam civil action for a violation of the New York False Claims Act on behalf of the state of New York or a local government. In the case of a successful action, the whistleblower shall be entitled to receive between 15% - 30% of the proceeds recovered in the action or in settlement of the action, in addition to an amount for reasonable expenses, attorney’s costs, and fees incurred during the case. The NY False Claims Act also protects whistleblowers against retaliation for engaging in protected activity.
New York is one of few states which has a whistleblower law that allows claims for recovery against companies and individuals who fail to pay income taxes in the state. In 2010 the New York Legislature amended the state’s False Claims Act to encompass claims, records or statements made under the tax law if the Defendant knowingly violated the False Claims Act through a tax scheme, when the net annual income of the Defendant is at least $1 million and the damages exceed $350,000.
The NY False Claims Act—State Finance Law, Art. XIII § 187-194—provides liability for any person who:
- a) knowingly presents, or causes to be presented a false or fraudulent claim for payment or approval;
- b) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim;
- c) conspires to commit a violation of paragraph (a), (b), (d), (e), (f) or (g) of this subdivision;
- d) has possession, custody, or control of property or money used, or to be used, by the state or a local government and knowingly delivers, or causes to be delivered, less than all of that money or property;
- e) is authorized to make or deliver a document certifying receipt of property used, or to be used, by the state or a local government and, intending to defraud the state or a local government, makes or delivers the receipt without completely knowing that the information on the receipt is true;
- f) knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the state or a local government knowing that the officer or employee violates a provision of law when selling or pledging such property;
- g) knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the state or a local government; or
- h) Knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the state or a local government, or conspires to do the same.
Violators shall be liable to the state or a local government, as applicable, for a civil penalty of $6,000-$12,000, plus three times the amount of all damages.
In 2010 the New York Legislature amended the state’s False Claims Act to encompass claims, records or statements made under the tax law only if:
- (i) the net annual income or sales of the person against whom the action is brought is at least $1 million;
- (ii) the damages pleaded in such action exceed $350,000; and
- (iii) the person is alleged to have violated a-g above.