EAST AURORA, NY — March 15, 2016 — New York State Assemblyman David DiPietro (R-East Aurora) today joined 17 of his legislative colleagues in a letter asking Attorney General Eric Schneiderman to explain his position on a whistleblower lawsuit pending against Citigroup. The lawsuit alleges the mega-bank shortchanged New York State $800 million in taxes between 2010 and 2012.
According to the New York State False Claims Act law, which Schneiderman personally crafted as a legislator, the case could return up to $2.4 billion to the state; triple the amount Citigroup allegedly owes.
“Many members of the Assembly are wondering why the Attorney General has declined to join the Citigroup whistleblower case,” DiPietro said. “The dollar amount at stake would fully fund significant badly needed infrastructure projects, or pay for a tax rebate of $300 for every household in the State of New York.”
“With so much at stake, many of us are requesting that the Attorney General explain his decision not to join the False Claims Act lawsuit against Citigroup,” DiPietro said.
In 2008, the United States government invested $45 billion in Citigroup through the Troubled Asset Relief Program (TARP), then allowed the troubled bank a special federal tax deduction. New York State ex rel. Eric Rasmusen v. Citigroup, Inc. alleges the bank used the federal loophole to underpay its NYS bank franchise tax obligations by $800 million. According to the whistleblower, Indiana University economics professor Eric Rasmusen, the Internal Revenue Service’s decision to aid Citigroup with this special, multi-billion-dollar tax deduction does not permit Citigroup to take the same deduction to reduce its state obligations. Attorney General Schneiderman has the legal right to lend his office’s support to the suit, but has declined without explanation.
The letter, delivered to Schneiderman Monday, was signed by 18 members of the New York State Assembly including DiPietro, Michael P. Kearns (D-Buffalo), Chad Lupinnaci (R-South Huntington), Ed Ra (R-Franklin Square), Phil Palmesano (R-Corning), Dave McDonough (R-Merrick), Bill Nojay (R-Pittsford), Dean Murray (R-East Patchogue), Joe Giglio (R-Gowanda), Peter Lawrence (R-Greece), Clifford Crouch (R-Bainbridge), Janet Duprey (R-Peru), Ken Blackenbush (R-Black River), Daniel Stec (R-Queensbury), Ray Walter (R-Amherst), Marc Butler (R-Newport), Karl Brabenec (R-Deerpark), and Peter D. Lopez (R-Schoharie).
The case is #1:15-cv-7826, United States District Court, Southern District of New York, State of New York ex rel. Eric Rasmusen v. Citigroup, Inc. Read the text of the letter here: https://www.scribd.com/doc/304879971/DiPietro-Letter-to-Attorney-General-Schneiderman