Using information first disclosed to the government in a case filed by Kirby McInerney, the New York Attorney General has won the criminal conviction of Long Island doctor Payam Toobian and his radiology business America’s Imaging Center. In the Attorney General’s prosecution, the jury returned guilty verdicts on most of the criminal counts against Toobian and his company, including counts concerning healthcare fraud, falsifying business records, and paying kickbacks to physicians to get them to refer patients to Toobian’s radiology business.
Randall M. Fox
Partner
- New York
-
250 Park Avenue
Suite 820
New York, NY 10177 - 212.699.1140
Biography
Biography
Randall M. Fox is a partner in our New York office who represents whistleblowers in False Claims Act and IRS, SEC, and CFTC matters about tax, healthcare, procurement, and investment frauds. He was named the Whistleblower Lawyer of the Year for 2021 by The Anti-Fraud Coalition.
Before representing whistleblowers, Mr. Fox served as a government lawyer handling cases filed by whistleblowers alleging frauds committed against public monies. He was the founding Bureau Chief of New York Attorney General’s Taxpayer Protection Bureau and, before that, was part of the Attorney General’s Medicaid Fraud Control Unit. At the government, he played a key role in several groundbreaking False Claims Act cases, including leading the state’s investigation and intervention into a tax whistleblower case against cell phone giant Sprint Corporation, which later settled for $330 million, and he filed the States’ first government-initiated New York False Claims Act case, which recovered more than $61 million for the New York Medicaid program from pharmaceuticals giant Merck, which was alleged to have falsely marketed its drug Vioxx.
In private practice, Mr. Fox has successfully represented whistleblowers in cases about a wide range of industries. He represented the whistleblower in New York’s largest income tax qui tam case, which resulted in a $105 million settlement with a hedge fund billionaire claimed to have disguised the New York source of his income. The whistleblower award was $22.05 million.
Before his government service, Mr. Fox was a litigation partner at the law firm of LeBoeuf, Lamb, Greene & MacRae, LLP, where his practice focused on defending corporate clients in class actions, commercial disputes, and securities and consumer fraud actions.
In private practice, Mr. Fox has successfully represented whistleblowers in cases about a wide range of industries. He represented the whistleblower in New York’s largest income tax qui tam case, which resulted in a $105 million settlement with a hedge fund billionaire claimed to have disguised the New York source of his income. The whistleblower award was $22.05 million.
Before his government service, Mr. Fox was a litigation partner at the law firm of LeBoeuf, Lamb, Greene & MacRae, LLP, where his practice focused on defending corporate clients in class actions, commercial disputes, and securities and consumer fraud actions.
- Williams College (B.A. 1988)
- New York University (J.D. 1991)
- New York State Bar
- United States District Courts for the Southern, Eastern, Western, and Northern Districts of New York
- United States Courts of Appeals for the Second, Third, Eighth, and Ninth Circuits
- United States Tax Court
2021 Whistleblower Lawyer of the Year, Anti-Fraud Coalition
Experience
Some of Mr. Fox’s experience includes:
- Represented the whistleblower in New York ex rel Tooley LLC v. Sandell, a New York False Claims Act qui tam case against a hedge fund owner for evading New York taxes on about $475 million in deferred compensation. The case resulted in a $105 million settlement with a 21% whistleblower award.
- Represented the whistleblower in the healthcare kickbacks case of New York State ex rel. WB Bros LLC v. Toobian, where the government intervened in the case and is pursuing criminal kickback charges against radiology businesses and their owner.
- Represented the whistleblower in United States ex rel. Doe v. FPR Specialty Pharmacy, a federal False Claims Act qui tam case against compounding pharmacy and its owners alleging kickbacks to doctors, independent sales representatives, and patients in the sale of pain creams. The case settled for all of the defendants’ limited assets, with a 21% whistleblower award.
- Represented the whistleblower in New York ex. rel. Raw Data Analytics, LLC v. J.P. Morgan Chase, a case that established the broad scope of obligations subject to whistleblower claims under the New York False Claims Act.
- Represented the whistleblower in New York ex rel. Choe v. Spa Castle, Inc., a New York False Claims Act case resulting in a civil settlement with a 23% whistleblower award and the criminal conviction of defendants for tax evasions that had been previously unknown to the government.
News
KM Partner Randall Fox is quoted in a Law360 article discussing the recent expansion of tax-related whistleblower cases under the New York False Claims Act, now allowing for cases to be brought against wealthy individuals and businesses that do not file New York tax returns and pay New York taxes they owe. Previously, such non-filers could escape liability because the statute applied only where a whistleblower could point to specific false statements or records related to tax obligations.
Fox described that the importance of the amendment is that it will lead to enforcement against non-filers who are notoriously difficult to find through the traditional audit process: “if tax audits are akin to finding a needle in a haystack, ‘here, you don’t even have a haystack.’”
Fox described that the importance of the amendment is that it will lead to enforcement against non-filers who are notoriously difficult to find through the traditional audit process: “if tax audits are akin to finding a needle in a haystack, ‘here, you don’t even have a haystack.’”
KM partner Randall Fox has published an article in Law360 discussing how New York has already decided an important issue about the “knowledge” element of the False Claims Act that will be argued next month before the U.S. Supreme Court. In the Sprint case under the New York False Claims Act, New York’s high court ruled in 2015 that the knowledge element depends upon a defendant’s contemporaneous understanding of the applicable rules. In the cases now before the Supreme Court, the defendants are arguing that they can instead rely on interpretations asserted for the first time after the False Claims Act case was filed.
In a September article, KM partner Randall Fox is quoted sharing his expertise on tax whistleblower cases. Mr. Fox’s comments are included in an article in Tax Notes written by Andrea Muse regarding the first publicly-disclosed case filed under Washington D.C.’s False Claims Act (FCA).
Partner Randall Fox’s Whistleblower Case under the False Claims Act Results in Indictment of Long Island Doctor
New York Attorney General Letitia James is pursuing criminal charges that were first brought to light by a False Claims Act lawsuit filed by Kirby McInerney partner Randall Fox on behalf of a whistleblower client against a Queens, New York radiologist and his company.
Partner Randall Fox spoke as a panelist during the Federal Bar Association Qui Tam Section Roundtable on Wednesday, July 27th, 2022. Mr. Fox was joined by Andrea Fischer, Robert Gardner, Michelle Merola, and Richard Neuworth as they discussed Tax Whistleblowing at the Federal and State Level.
?Partner Randall Fox discussed with Law360 New York lawmakers' recent passage of an amendment to the New York False Claims Act to close a loophole in the state’s tax whistleblower law by permitting actions against corporations and wealthy individuals who knowingly fail to file New York tax returns.
The law firm of Kirby McInerney LLP is pleased to announce that partner Randall Fox has been named the 2021 “Lawyer of the Year” by the Taxpayers Against Fraud Education Fund (“TAFEF”), which is the leading public advocacy group for whistleblowers.
Bloomberg Tax reported on a whistleblower case filed by Kirby McInerney LLP in an article by reporter Michael Bologna entitled “New York Said to Be Cheated of Millions in Tax by Headhunter.” The article can be found here.
The New York Legislature passed a bill that would expand the state's False Claims Act to hold taxpayers liable for failing to file state returns, as opposed to only for providing false records.
A New York Senate committee advanced a bill that would expand the state's False Claims Act to hold taxpayers liable for failing to file state returns, as opposed to only for providing false records.
Maryland residents who suspect tax fraud would be able to tip off the state tax agency and receive a monetary reward if the agency recovered money, in an IRS-like program approved by state lawmakers and sent to the state's governor.
In 2010, New York amended its False Claims Act to enable whistleblowers to sue individual and corporate defendants with a net income or sales exceeding $1 million that cheated on their taxes in excess of $350,000. Other states are considering similar legislation. Randall Fox of Kirby McInerney LLP debunks some common fallacies regarding the New York law.
The law firm of Kirby McInerney LLP announced today a $105 million settlement in a case the firm filed on behalf of its whistleblower client against hedge fund billionaire Thomas Sandell and his business Sandell Asset Management Corporation. The settlement is the largest income tax recovery under the New York False Claims Act.
New York state is going after businesses that help their clients and customers avoid taxes using the state’s False Claims Act. The targets include such esteemed businesses as Sotheby’s and its wealthy clients. Randall Fox of Kirby McInerney tells how Sotheby’s allegedly ran afoul of the Act and explains how the state is pursuing facilitators of tax fraud.
Kirby McInerney LLP has settled a significant False Claims Act case on behalf of a whistleblower client against a compounding pharmacy FPR Specialty Pharmacy, its owners Christopher Casey and Billy Rue, and affiliated business Mead Square Pharmacy, all from the Rochester, New York area.
Kirby McInerney Partner Randall Fox was quoted in this Bloomberg Tax article about tax-related false claims suits. California, Michigan, and the District of Columbia are considering bills that add tax code violations to the list of actionable frauds coming under their false claims laws. Mr. Fox notes that New York’s tax whistleblower law has resulted in “very stong and important cases.”
Unclaimed property operations and compliance managers at US financial firms will soon find out that the task is more difficult than they thought should JP Morgan Chase lose its appeal of a New York civil court judge’s ruling about the bank’s required interest payment on unclaimed accounts reported late to New York State.
Kirby McInerney Partner Randall Fox represents a whistleblower client in a case against JPMorgan Chase alleging that Chase held $60 million worth of unclaimed assets longer than it should have, depriving the state of about $12 million in interest income over roughly two years.
JPMorgan Chase & Co. could be on the hook for millions in unpaid interest and penalties for delaying transfers of unclaimed property to the state of New York following a first-of-a-kind state court ruling.
Mobile giant Sprint Corp. will pay $330 million to resolve a New York False Claims Act suit that accused the company of shirking $100 million in state taxes, with almost $63 million of that sum going to a whistleblower, the state attorney general said Friday.
Settling with the state, Spa Castle is going to pay $2.5 million in civil damages and criminal restitution over a tax fraud scheme, New York Attorney General Barbara Underwood and Acting Department of Taxation and Finance Commissioner Nonie Manion announced last Thursday. “This is a case where tax cheaters would have stayed under the radar had it not been for a brave whistleblower reporting on the fraud,” Randall Fox of Kirby McInerney LLP, one of the two attorneys who represented the source.
Kirby McInerney LLP has secured a $2.5 million recovery for the State of New York in a tax whistleblower action brought against the famed spa organization Spa Castle and the family that owns it. Today, New York Attorney General Barbara Underwood announced the settlement and associated criminal pleas by defendants in the case.
Thanks to 2010 amendments to New York’s False Claims Act, whistleblowers can receive incentive awards of 15 to 30 percent of the government's recovery for bringing actions — called “qui tam” actions — on behalf of the government to help recover tax monies lost by fraud.
The suit was filed last week in Brooklyn state court by several small New York distributors of cigarettes and other candy store items — Amsterdam Tobacco, Donohue Candy, Kingston Candy, Mountain Candy and Sunrise Candy — claiming that bigger out-of-state distributors for years have been allegedly giving kickbacks to stores that buy cigarettes from them.
A lawsuit filed this week accuses five of the state’s largest tobacco wholesalers of giving secret rebates to customers to drive down competition as part of an alleged scheme which may have violated state laws that set minimum prices on cigarettes.
A recently leaked memo setting out circumstances for when U.S. Department of Justice attorneys should use its rarely invoked authority to ask for “meritless” qui tam False Claims Act cases to be dismissed could foreshadow a more aggressive DOJ approach to dismissals, but proof will only come from seeing its future actions, attorneys said.
A recent, little-noticed decision in the New York Supreme Court has confirmed that the tax provisions of New York’s False Claims Act apply not only to persons and companies that cheat on the tax returns they submit, but also to those who knowingly skirt their obligations by entirely failing to file any New York Tax returns.
Fraud-related claims usually must be pled with particularity. But in a little-noticed provision at the end of New York’s False Claims Act, Sec.192(1-a), the New York legislature provided for a lower pleading hurdle when asserting violations of New York’s FCA in state court.
In this viewpoint, Fox looks back at six years of New York tax enforcement through qui tam lawsuits. He concludes that the abuses predicted by opponents of the law have failed to materialize and that the statute, which allows tax recovery suits by private citizens, appears to have generated a good return on the investment. The full article is reproduced with permission of TaxAnalysts and is accessible on KM’s website.
Bloomberg BNA quoted Kirby McInerney partner Randall M. Fox, former New York Attorney General Bureau Chief, in an article addressing a high profile whistle-blower tax case against Sprint Nextel Corp. for the company’s alleged failure to collect and pay sales taxes on flat-rate calling plans, and why the plaintiffs’ bar expects more of these types of cases to be filed.
Kirby McInerney Partner Randall Fox published an article in Law360 discussing a whistleblower False Claims Act case against Sprint Corp. for failing to collect and pay more than $100 million in New York state and local sales taxes on its flat-rate monthly cell phone charges.
Partner Randall Fox made a presentation on the perspective of whistleblowers to the “False Claims and Qui Tam Seminar” put on by the CLE Committee of the Northern District of New York’s Federal Court Bar Association. Mr. Fox’s presentation addressed how whistleblowers who bring forward claims that the government was victimized by fraud can best present their cases and some of the legal issues that must be considered by whistleblower’s counsel. With his presentation, Mr. Fox circulated an outline of the disclosures that whistleblowers should make to government enforcement agents, a copy of which is available on KM’s website..
Partner Randall Fox made a presentation to the Class Action and False Claims Act Work Group of the Multistate Tax Commission, addressing the options states have for drafting laws that give incentives to citizens to report on tax frauds.
False Claims Act cases focus on situations where the government has been victimized by fraud. A whistleblower who invokes the act first presents the case to government enforcement authorities who decide either to intervene and take up the case, or decline and allow the whistleblower to proceed on the government’s behalf.
This is the final article in a series on qui tam suits. This article discusses New York’s approach to tax fraud suits, which is being heralded as a possible model for both state and federal regimes.
On June 6, 2014, Bloomberg BNA published its interview with partner Randall M. Fox, former New York Attorney General Bureau Chief, on why states should lift their bar on qui tam tax claims.
On April 8, 2014, Bloomberg reported the addition of new partner Randall Fox to Kirby McInerney. Mr. Fox was previously the founding head of the Taxpayer Protection Bureau in New York Attorney General Eric Schneiderman’s office.
Kirby McInerney LLP announced today that it has enhanced its whistleblower practice by adding Randall M. Fox as a partner based in its New York office. Mr. Fox recently served as the founding Bureau Chief of the New York Attorney General’s Taxpayer Protection Bureau, where he primarily prosecuted whistleblower actions concerning claims of fraud against the government.