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Hedge Funds

Harbinger Capital Partners to pay $30 million to settle tax evasion charges

Harbinger Capital Partners Offshore Manager has agreed to pay $30 million to settle a lawsuit filed by the state of New York claiming the hedge fund manager knowingly evaded New York state and city taxes.

A news release issued by the New York attorney general's office claims that Harbinger concealed income it earned while doing business in New York.

"Harbinger Capital Partners Offshore Manager earned hundreds of millions of dollars in New York state and New York City, but deliberately dodged paying its fair share of taxes," Attorney General Barbara D. Underwood said in the release. "Tax evasion forces ordinary New Yorkers to shoulder the bill. My office will continue to use every tool at our disposal to pursue those who knowingly violate the tax law and hold them accountable."

The suit resulted from an investigation that was launched after a whistleblower lawsuit was filed in March 2015.

The settlement follows an earlier $40 million settlement in this investigation, which concluded in April 2017, with Harbert Management Corp., the investment manager that sponsored the principal hedge fund that Harbinger ran. As a result, a total of $70 million will be recovered. The unnamed whistleblower will receive $15.4 million from the settlement.

The settlement is available on the attorney general's website.