The whistleblower who prompted an investigation by filing a lawsuit under the state’s False Claims Act, will now be receiving a payout of roughly $8.8 million as a result of a settlement tied to disgraced hedge fund billionaire Phil Falcone.
According to the New York attorney general, Eric T. Schneiderman, his office had reached a $40 million settlement with Harbert Management Corporation and several of its top executives over allegations that they had not paid state taxes between 2002 and 2009, during the years Mr. Falcone was managing Harbinger, which was owned by Harbert.
Reportedly, the government alleged that Mr. Falcone, his fund and the profits generated from it were based in New York; therefore some taxes on profits should have been paid to the state. Instead, all taxes were paid to Alabama, dodging New York’s higher rates.
In 2013, Mr. Falcone reached a settlement with the Securities and Exchange Commission that bars him from working in the securities business until 2018. He and his hedge fund agreed to pay $18 million in restitution and penalties.
The whistleblower earned 22 percent of the settlement. Harbert was a sponsor of Falcone’s Harbinger Capital Partners.
