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Say what you will about Julian Robertson’s maddening, meticulous and painstaking tax-avoidance strategy, the man came by it honestly. Employing a whole team to keep thorough account of his whereabouts vis-à-vis the New York City line, frantically hailing cabs, and driving his wife and assistant insane, Robertson made damned sure that he never spent a minute in the Big Apple in any but the 182 days the taxman allocates if ones does not wish to pay city levies on one’s income, and that he’d be able to document that should anyone question him about it.

Thomas Sandell took another approach. Eager to avoid paying both the state and city taxes he’d already deferred on $450 million in fee income, Sandell moved to London and told New York authorities that he’d moved his hedge fund’s offices to Florida. Except, at least as regards the latter, he allegedly didn’t. And made the Trumpian mistake of telling New York one thing, and the Securities and Exchange Commission another.

The New York attorney general said Mr. Sandell opened a shell office in Boca Raton, Fla., which he told New York tax authorities was the firm’s sole U.S. operation, even though he had told the U.S. Securities and Exchange Commission that the business was in New York City.

And still he might have gotten away with it, as the SEC and New York State Department of Taxation and Finance apparently don’t check their records against the others as a matter of routine. But Sandell was apparently equally sloppy about spreading the information around, which those less scrupulous than Robertson could have told him might equal trouble—one-tenth of his wealth trouble.

The billionaire hedge fund manager Thomas Sandell has paid $105 million in back taxes and damages to settle charges he defrauded New York state and New York City out of taxes on a decade’s worth of fees…. The settlement arose from claims brought by a whistleblower, and according to James is the largest recovery from an individual under New York’s False Claims Act…. Sandell transformed his firm into a family office in 2019 and is worth $1.3 billion, Forbes magazine said.

I don’t know, Ken Griffin, think this kind of thing might have something to do with the popularity of increasing taxes on hedge fund managers?

Hedge-Fund Manager Thomas Sandell Pays $105 Million New York Tax Settlement [WSJ]
Hedge fund billionaire Sandell pays $105 million to settle NY tax fraud case [Reuters]



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