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New York investment manager reaches $30 million settlement for tax evasion allegations

State AG

By Marian Johns | Oct 2, 2018

NEW YORK - New York-based investment manager Harbinger Capital Partners Offshore Manager LCC (Offshore Manager) has reached a $30 million settlement with the state of New York to resolve allegations the corporation avoided state and New York City taxes.

According to the New York State Attorney General's Office and the New York City Corporation Counsel, Offshore Manager knowingly evaded both state and city taxes and concealed income earned through incentive fees from successful trading.  

“Harbinger Capital Partners Offshore Manager earned hundreds of millions of dollars in New York state and New York City, but deliberately dodged paying its fair share of taxes,” New York Attorney General Barbara Underwood said in a statement.  “Tax evasion forces ordinary New Yorkers to shoulder the bill. My office will continue to use every tool at our disposal to pursue those who knowingly violate the tax law and hold them accountable.”

“The New York False Claims Act, which expressly covers tax fraud, provides a powerful tool for government to use to compel tax law compliance," added New York City corporation counsel Zachary Carter. "With the assistance of the New York City Department of Finance, we were successful in ensuring that the city unincorporated business tax was paid for a hedge fund business that was operating out of a New York City office.”   

The settlement, which stems from a 2015 whistleblower lawsuit, includes a $4.8 million payment to the New York City Department of Finance for an outstanding tax judgment, Underwood's office said.

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