Market Overview

Kirby McInerney Announces Settlement of Tax Whistleblower Case against Spa Castle


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. Today's press
release from the New York Attorney General's Office is here.

Kirby McInerney's whistleblower client brought to light pervasive tax
fraud by Spa Castle and its owners and operators, Steve Chon, Victor
Chon, Daniel Chon and Stephanie Chon. Over multiple years, the company
and the Chon family members repeatedly underpaid several types of taxes
and kept that money for themselves. They accomplished their tax schemes
by falsifying their revenues, abusing cash receipts and paying employees
off the books.

Under the New York False Claims Act, a whistleblower can bring suit,
known as a "qui tam" suit, on behalf of the government to help the
government recover monies lost by fraud. The whistleblower receives a
percentage share of the government's recovery as an award.

In this case, Kirby McInerney's client will receive a whistleblower
award of 23% of the government's recovery. This award is the highest
percentage award received by a whistleblower in a New York False Claims
Act case not involving Medicaid. Prior whistleblower awards in New York
tax cases have ranged from 17.62% to 22%.

Kirby McInerney partners Randall
and David
represented the whistleblower.

"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," said Mr.
Fox. "It shows clearly that rewarding whistleblowers works to benefit
the government and the honest taxpayers who support it with their tax

LLP is a New York-based plaintiffs' law firm concentrating
in securities, antitrust, and whistleblower litigation. The firm's
efforts on behalf of clients and class members have resulted in
recoveries totaling billions of dollars. Additional information about
the firm can be found at Kirby McInerney LLP's website:

This press release may be considered Attorney Advertising in some
jurisdictions under the applicable law and ethical rules.

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