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18 NY, NJ Pension Plans Duped Danish Gov't, Suit Says (Law360)

6/6/2018 18 NY, NJ Pension Plans Duped Danish Gov't, Suit Says - Law360https://www.law360.com/articles/1050427/print?section=governmentcontracts 1/2 Portfolio Media. Inc. | 111 West 19th Street, 5th floor | New York, NY 10011 | www.law360.com Phone: +1 646 783 7100 | Fax: +1 646 783 7161 | customerservice@law360.com 18 NY, NJ Pension Plans Duped Danish Gov't, Suit Says

By Emily Brill

Law360 (June 5, 2018, 7:27 PM EDT) -- The agency tasked with collecting taxes in Denmark slapped 18 New York- and New Jersey-based pension funds with lawsuits in federal court, claiming the plans were part of a massive multinational fraud scheme to dupe the Danish government out of $2.1 billion in reimbursed taxes.

The suits, filed last week, finger 13 New Jersey-based plans, five New York-based plans and six plan administrators and mark the latest round of litigation filed by the agency against the pension plans it accuses of improperly receiving tax refunds from the Danish government.

The Customs and Tax Administration of the Kingdom of Denmark, also known as SKAT, accused 277 American pension plans of pretending to own shares of Danish stock, then claiming tax refunds they allegedly never deserved.

With the help of its counsel, Hughes Hubbard & Reed LLP, the agency is in the process of filing suit against those pension plans in federal courthouses in Connecticut, Florida, Illinois, Massachusetts, New Jersey and Ohio, so far. SKAT is also suing entities in Canada, Luxembourg, Malaysia and the United Kingdom for their alleged roles in the scheme.

"The essence of the fraudulent scheme is that each of over 300 entities pretended to own shares in Danish companies," then applied for tax refunds that would have been due to them if they had owned those shares, SKAT claimed. "These applications were fraudulent because the claimants did not own the shares that they claimed to own."

On Tuesday, an attorney for 58 of the pension plans that have been sued called the allegations "patently untrue" and said they reflect "a lack of understanding of the transactions." "What they're saying, essentially, is the pension funds shouldn't have been invested in this type of structure," John Hanamirian, managing partner of the Hanamirian Law Firm, told Law360, adding that that doesn't make the transactions illegal.

"The tack seems to be that if they can disqualify the plans based upon their participation, then that will upset the structure, which in turn upsets the validity of the refund, and they can get their $2.1 billion back," Hanamirian said. "It's a political issue in Denmark. ... Their citizens are outraged by what they see as third-party participation in their tax benefits."

Hanamirian said he will have a better idea of where these cases might go after he represents one of the New York-based pension plans in the first pretrial conference, set for June 26 in the U.S. District Court for the Southern District of New York.

The New York-based plans sued last week are the Godson Consulting LLC 401(k) Plan, the Ackview Solo 401(k) Plan, the NYCATX LLC Solo 401(k) Plan, the M2F Wellness LLC 401(k) Plan and the MPQ Holdings LLC 401(k) Plan.

The New York-based plans' administrators are Carl Andrew Vergari, Mitchell Protass, Jonathan Godson and Sean Driscoll.

The New Jersey-based plans sued last week are the Chambers Property Management LLC 401(k) Plan, the Blackbird 401(k) Plan, Fiftyeightsixty LLC Solo 401(k) Plan, the Hawk Group Pension Plan, the Beech Tree Partners 401(k) Plan, the Robin Daniel Pension Plan, Onezerofive LLC Solo 401(k) Plan, the Hibiscus Partners LLC 401(k) Plan, the Maple Advisors LLC 401(k) Plan, the Sea Bright Advisors LLC 401(k) Plan, the Tag Realty Advisors LLC 401(k) Plan, the Throckmorton Advisors 401(k) Plan and the Balmoral Management LLC 401(k) Pension Plan. The New Jersey-based plans' administrators are Matthew Tucci and John LaChance. The pension funds are represented by John Hanamirian of the Hanamirian Law Firm. SKAT is represented by Eric Blumenfeld, Jennifer Suh, Sarah L. Cave, William R. Maguire, John T. McGoey and Marc A. Weinstein of Hughes Hubbard & Reed LLP.

The New Jersey cases are SKAT v. Chambers Property Management LLC 401(k) Plan, case number 3:18-cv-10110, SKAT v. Blackbird 401(k) Plan, case number 3:18-cv-10109, SKAT v. Fiftyeightsixty LLC Solo 401(k) Plan, case number 3:18-cv-10111, SKAT v. the Hawk Group Pension Plan, case number 3:18-cv-10112, SKAT v. the Beech Tree Partners 401(k) Plan, case number 3:18-cv-10108, SKAT v. the Robin Daniel Pension Plan, case number 3:18-cv-10116, SKAT v. Onezerofive LLC Solo 401(k) Plan, case number 3:18-cv-10115, SKAT v. the Hibiscus Partners LLC 401(k) Plan, case number 3:18-cv-10113, SKAT v. the Maple Advisors LLC 401(k) Plan, case number 3:18-cv-10114, SKAT v. the Sea Bright Advisors LLC 401(k) Plan, case number 3:18-cv-10117, SKAT v. the Tag Realty Advisors LLC 401(k) Plan, case number 3:18-cv-10118, SKAT v. the Throckmorton Advisors 401(k) Plan, case number 3:18-cv-10119, and SKAT v. the Balmoral Management LLC 401(k) Pension Plan, case number 3:18-cv-10098, all in the U.S. District Court for the District of New Jersey. The New York cases are SKAT v. Ackview Solo 401(k) Plan, case number 1:18-cv-04900, SKAT v. the NYCATX LLC Solo 401(k) Plan, case number 1:18-cv-04898, SKAT v. Godson Consulting LLC 401(k) Plan, case number 1:18-cv-04831, SKAT v. the M2F Wellness LLC 401(k) Plan, case number 1:18-cv- 04890, and SKAT v. the MPQ Holdings LLC 401(k) Plan, case number 1:18-cv-04892, all in the U.S. District Court for the Southern District of New York.

--Additional reporting by Chris Villani. Editing by Stephen Berg. All Content © 2003-2018, Portfolio Media, Inc.

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