Attorney General James Secures $4.5 Million in Travel Agency Tax Scheme Settlement

New York Attorney General Letitia James has secured $4.5 million from a group of online travel companies accused of avoiding state taxes through a years long scheme, according to an announcement Friday.

The settlement resolves allegations that Fareportal Inc. and three affiliated companies—WK Travel Inc., Jen NY Inc., and Tripmama Inc.—failed to pay more than $1 million in New York corporate taxes between 2007 and 2012. State investigators found the companies improperly reduced their taxable income by misclassifying dividend payments as “management fees.”

According to the attorney general’s office, the companies paid roughly $145 million in so-called management fees to a related entity, Magic Travel LLC, which shared the same owner but had no employees and primarily held the owner’s personal investments. By treating those payments as business expenses, the companies were able to significantly lower their reported profits and tax liability.

Investigators concluded the payments were dividends to the owner and should not have been deducted. The companies and their advisers were aware of the potential tax risks, including warnings from outside accountants that the payments could be reclassified and trigger substantial tax liability, the state said.

“Fareportal and its affiliates operated a brazen scheme to avoid paying taxes, and now they are being held accountable,” James said in a statement, adding that her office would continue pursuing companies that evade taxes.

The investigation began after a whistle blower filed a lawsuit under the New York False Claims Act, which allows private individuals to bring cases on behalf of the government. Under the settlement, about $1 million of the total recovery will go to the whistle blower.

The agreement resolves civil claims and does not include an admission of wrongdoing by the companies. Representatives for Fareportal did not immediately respond to a request for comment.

N.Y. AG Shuts Down Predatory Tenant Law Firm, Secures Refunds for Eviction-Facing Clients

New York Attorney General Letitia James has forced the shutdown of Tenants Counsel Network, a law firm accused of misleading eviction-facing tenants, trapping them in paid legal agreements and then failing to provide the promised representation.

The agreement, announced Thursday, requires the firm to dissolve by July 31, 2026, refund $172,257 to former clients and pay $25,000 in penalties to the state. Aryeh Weber, the firm’s founding partner, must also close his law office, pay $10,000 in penalties and resign from practicing law in New York.

“When tenants seek legal counsel, they should be able to trust that their lawyers are going to help them,” said Attorney General James. “Housing is a stabilizing force for New York families, and this law firm preyed on New Yorkers who stood to lose it. Today, my office is putting hard-earned money back in New Yorkers’ pockets and making sure that this law firm cannot harm any tenant again.”

According to the attorney general’s office, TCN used deceptive marketing to reach tenants at a vulnerable moment, including sending tens of thousands of solicitation letters and making repeated phone calls to people facing eviction. The firm allegedly presented itself as a specialized, experienced housing law practice even though it lacked attorneys with landlord-tenant expertise at its start.

Investigators said the firm also used fake testimonials and, in more than 1,100 letters, the signature of an attorney who did not exist. In some cases, tenants received the firm’s solicitation before they even got court papers notifying them of an eviction case.

The attorney general’s office said TCN often failed to communicate with clients ahead of court dates and, in numerous cases, did not appear in eviction court at all. Some tenants said they could not reach anyone at the firm after missed court appearances, and many reportedly never had a meaningful conversation with an attorney despite paying monthly fees.

N.Y. AG Secures $5 Million From Crypto Platform Over Fraudulent Investment Scheme

New York Attorney General Letitia James has secured more than $5 million from cryptocurrency platform Uphold over allegations that it misled investors by promoting a fraudulent digital-asset product tied to the collapsed firm Cred, according to the attorney general’s office.

The settlement, announced Tuesday, resolves allegations that Uphold promoted CredEarn as a safe, reliable savings product even though Cred was using investor funds for risky loans to borrowers in China with little or no credit history. When Cred collapsed in 2020, thousands of investors worldwide lost millions of dollars, the office said.

Under the agreement, Uphold will pay $5 million to harmed investors, along with any additional money it receives from Cred’s bankruptcy proceedings, which the company says totals $545,189. The settlement also requires Uphold to strengthen its due-diligence policies before offering or recommending third-party investment products and to register as a broker in New York.

The attorney general’s office said Uphold offered CredEarn on its platform and mobile app from January 2019 through October 2020. In marketing the product, the company allegedly described it as a reliable savings option and said it was covered by “comprehensive insurance,” even though no such retail-investor protection existed for digital assets. Investigators also found that Uphold promoted the product without registering as either a broker or commodity broker-dealer, according to the office.

Cred began suffering significant losses in March 2020 and filed for bankruptcy in November 2020 after its risky lending business unraveled. The company’s collapse left investors with millions in losses.

James said crypto companies have a responsibility not to mislead customers about investment risks. “When crypto companies break the law and mislead investors, the consequences can be devastating to New Yorkers’ livelihoods,” she said in a statement.