2014

Delaware Law Allows Individuals to Sue Businesses for Failure to Report Unclaimed Property

DALLAS, June 29, 2012 /PRNewswire/ -- Delaware's False Claims and Reporting Act (DFCRA) allows private citizens to bring civil law suits on behalf of the government and allows the government to intervene and join the suit. Under the DFCRA, a citizen's or plaintiff's suit must allege that the business owed an amount to the government and that the business knowingly made or used a false record or statement to conceal or avoid the obligation.

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Recently, the Delaware Superior Court issued a decision in a DFCRA suit, Higgins v. SourceGas, LLC et al. SourceGas Holdings, LLC; SourceGas, LLC; and SourceGas Distribution, LLC ("Defendants") were incorporated in Delaware. The Plaintiff, Mr. Higgins, worked for the Defendants, and in the course of his employment discovered unclaimed or un-cashed utility deposits and customer credits. In his suit, Mr. Higgins alleged that instead of returning credits or deposits to the customers or remitting the property to the state, one defendant, SourceGas Distribution, LLC, renamed its Unclaimed Property Liability account Converted Balance from December of 2004. The court found that, with regards to one Defendant, the Plaintiff met his obligation to allege that the Defendant owed amounts to the state and that the Defendant made or used a false record to avoid or conceal that obligation.

As a result of DFCRA and similar laws in other states, an employee who believes that a business has failed to report unclaimed property could be financially incentivized to initiate lawsuits against his or her employer or former employer. Further, avoiding unclaimed property obligations could be actionable under false claims acts, regardless of whether a company filed a false report.

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Ryan is an award-winning global tax services firm, with the largest indirect tax practice in North America and the seventh largest corporate tax practice in the United States. Headquartered in Dallas, Texas, the Firm provides a comprehensive range of state, local, federal, and international tax advisory and consulting services on a multi-jurisdictional basis, including audit defense, tax recovery, credits and incentives, tax process improvement and automation, tax appeals, tax compliance, and strategic planning. Ryan is a two-time recipient of the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the dynamic myRyan work environment, which is widely recognized as the most innovative in the tax services industry, Ryan's multi-disciplinary team of more than 925 professionals and associates serves over 6,500 clients in 40 countries, including many of the world's most prominent Global 5000 companies. More information about Ryan can be found at www.ryan.com.

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