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Getnick Law Leads $263 Million IRS Whistleblower Recovery

All News September 18, 2024

Getnick Law and SEC Whistleblower Advocates PLLC led the representation of the lead whistleblower in an historic $263 million tax fraud recovery from an individual taxpayer, the award for which was recently finalized by the Internal Revenue Service.

Getnick Law and SEC Whistleblower Advocates represented the whistleblower along with Outten & Golden LLP. The whistleblower, whose identity remains protected, was the primary whistleblower in the case, which involved two additional whistleblowers. One of the other whistleblowers was represented by Whistleblower Partners LLP, and one did not have legal representation.

The three whistleblowers will receive 30 percent of the government’s recovery, the maximum possible award, a reflection of the importance of the information and assistance provided to the government. The whistleblower represented by Getnick Law provided particularly valuable information and assistance, meeting with government officials from multiple agencies on many occasions over a five-year period.

The IRS is not identifying the taxpayer who committed the fraud.

The $263 million settlement concludes one of the largest tax whistleblower cases ever. By comparison, the IRS collected a total of $338 million from whistleblower cases resulting in 121 awards in fiscal year 2023.

The settlement resolved a matter that was unusually complex due to the size and nature of the fraud and the involvement of three distinct whistleblowers.  Getnick Law proposed a way to overcome obstacles that often impede the resolution of cases with multiple whistleblowers. The IRS Whistleblower Office, under the leadership of Director John Hinman, facilitated and supported the whistleblowers in coming together, enabling them to reach a resolution regarding the allocation of the award, thereby avoiding the possibility of years of litigation in Tax Court.

Getnick Law partner Margaret Finerty led the Getnick Law team, which included Neil Getnick, the firm’s managing partner, partner Richard Dircks and counsel Stuart Altschuler. Jordan Thomas of SEC Whistleblower Advocates co-led, and partners Jennifer Schwartz and Tammy Marzigliano co-counseled the matter from Outten & Golden. The team worked closely with Whistleblower Partners, the unrepresented whistleblower, the IRS Whistleblower Office and its director John Hinman to resolve the matter.

Finerty, a former New York City Criminal Court Judge and former Deputy Chief of the Manhattan District Attorney’s Office Frauds Bureau, said, “This groundbreaking case illustrates the importance of the IRS whistleblower law and how it empowers private citizens to work with the government to uncover massive fraud committed by powerful individuals and generate significant revenue for the government, benefiting honest taxpayers across the country.”

Getnick added, “Together we have demonstrated that when the IRS Whistleblower Program functions as a public-private partnership embracing mutually supportive cooperation, it can produce a win-win-win resolution for the Whistleblower Office, whistleblowers and their counsel, and most importantly, the public.”

Thomas, a former DOJ Trial Attorney and SEC Assistant Director, who had a leadership role in the development of the SEC Whistleblower Program, said, “What started out as a run-of-the-mill potential securities concern quickly became an historic tax case. It is a testament to the extraordinary potential of federal whistleblower programs to fight corruption and change the lives of courageous whistleblowers. The immense size of this fraud resulted in a well-deserved, significant financial reward for our client.”

Marzigliano of Outten & Golden said, “We have represented whistleblowers in corporate America for more than two decades. In this situation, our client was a model for whistleblowers everywhere, who courageously navigated many   challenges in order to provide the government with vital information.” Schwartz of Outten & Golden added, “Our client may be anonymous, but whistleblowers everywhere can easily identify with their bravery, and their willingness to do what’s right. We hope their actions inspire others to speak out and pursue justice.”

Getnick Law is a premier, New York-based, boutique law firm representing whistleblowers under all federal and state whistleblower laws, conducting complex investigations and litigation, and counseling commercial clients throughout the country and internationally.

RELATED MATERIALS:

  • The Washington Post:  They exposed a tax cheater.  They’ll share a $74 million reward.  (Sept. 18, 2024) (“The $263 million recovery, which includes interest and penalties, is ‘truly a reflection of the importance of the information and assistance that was provided to the government by the whistleblowers,’ said Margaret Finerty, an attorney for Getnick Law”)
  • Bloomberg: Tax Tipsters Getting $74 Million Shows IRS Progress, Lawyers Say (Sept. 18, 2024) (“‘We think that this victory that we have achieved together with the IRS Whistleblower Office is a harbinger for the future,’ said Neil Getnick, managing partner at Getnick Law”)
  • Corporate Crime Reporter: Whistleblower Pulls in $263 Million IRS Recovery (Sept. 23, 2024) (“This groundbreaking case illustrates the importance of the IRS whistleblower law and how it empowers private citizens to work with the government to uncover massive fraud committed by powerful individuals and generate significant revenue for the government, benefiting honest taxpayers across the country,” Finerty said)
  • Corporate Crime Reporter Interview: Interview with Neil Getnick, Getnick Law, New York, New York (Sept. 30, 2024) (“Getnick: This case is a breakthrough and may very well be a harbinger of the future.  There was an extraordinary degree of cooperation among the whistleblowers’ counsel and the IRS whistleblower’s office.”)
  • CityBiz:  Getnick Law and SEC Whistleblower Advocates Lead Tax Whistleblower Case That Produces $263 Million Recovery for IRS (Sept. 18, 2024) (“The three whistleblowers will receive 30 percent of the government’s recovery, the maximum possible award, a reflection of the importance of the information and assistance provided to the government. The whistleblower represented by Getnick Law provided particularly valuable information and assistance, meeting with government officials from multiple agencies on many occasions over a five-year period.”)
  • Business Wire:  Getnick Law and SEC Whistleblower Advocates Lead Tax Whistleblower Case That Produces $263 Million Recovery for IRS (Sept. 18, 2024) (“The $263 million settlement concludes one of the largest tax whistleblower cases ever. By comparison, the IRS collected a total of $338 million from whistleblower cases resulting in 121 awards in fiscal year 2023.”)
  • CPA Practice Advisor: Three Whistleblowers Will Share One of the Largest Awards Ever Given By the IRS (Sept. 19, 2024) (“‘Together we have demonstrated that when the IRS whistleblower program functions as a public-private partnership embracing mutually supportive cooperation, it can produce a win-win-win resolution for the whistleblower office, whistleblowers and their counsel, and most importantly, the public,’ Getnick said in a statement.”)
  • Law360:  Tips Lead To $263M IRS Settlement In Offshore Evasion Case (Sept. 18, 2024) (“The trio of whistleblowers who gave the Internal Revenue Service information that led to the settlement will get 30% of the government’s recovery, the largest award possible, according to a statement by Getnick Law.”)