NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced a $1.56 million settlement on Friday with a New Jersey appliance retailer and its principal owner to resolve allegations of failure to pay New York taxes.
Topline Appliance Center and Michael Moretti, the company's principal owner, allegedly sold or delivered high-end appliances to New York residents from their New Jersey stores without collecting any New York state and local sales taxes over an approximate 10-year period. Topline also allegedly failed to pay proper New York corporate franchise taxes, which gave the company an improper competitive advantage over New York-based appliance stores.
Schneiderman alleged Topline and Moretti evaded approximately $668,000 in taxes.
“Topline Appliance Center’s failure to collect and pay sales and corporate taxes is unacceptable,” Schneiderman said. “Out-of-state companies that do business in New York without collecting or paying the proper amount of taxes have an unfair advantage over New York businesses that play by the rules. This settlement levels the playing field in the retail appliance industry and sends a message that cheating on taxes will not be tolerated.”
Topline and Moretti agreed to pay $1.56 million to resolve the allegations.
The settlement resulted from an action filed under the whistleblower provisions of the New York False Claims Act. Under the law, whistleblowers may be eligible to receive up to 30 percent of any money recovered as a result of information they provide. The whistleblower in this matter will receive $313,984 from the proceeds of the settlement.