Nevada court preserves whistleblowing case
CARSON CITY – A ruling Thursday by the Nevada Supreme Court preserves a whistleblower’s complaint against International Game Technology in a case that started with a claim that IGT filed false tax returns and owed the state up to $50 million in back taxes.
The high court’s unanimous opinion upholds a decision by Washoe County District Judge Connie Steinheimer that favored Jim McAndrews, who had worked on tax matters at Reno-based IGT and was fired in 2006.
McAndrews got an adverse ruling from the Supreme Court two years ago in the dispute but followed up with a whistleblower protection complaint based on the state False Claims Act’s anti-retaliation provisions.
McAndrews contends that IGT retaliated against him by suspending him with pay and barring him from IGT premises after his first complaint and eventually firing him after he lost his first Supreme Court case.
In its latest ruling, the Supreme Court rejected an argument by IGT attorneys that McAndrews couldn’t win his case unless he could show that IGT “pressured him into the fraudulent activity in the first place.”
While such a showing of participation is required under one state law, justices said another law section says a former employee can recover damages “simply by alleging and proving that his employer retaliated against him.”
The 14-page opinion returns the case to Steinheimer’s court for further action.
In the first case that was rejected by the Supreme Court in 2006, McAndrews alleged that IGT and Anchor Coin Co. were involved in a joint venture and since 1997 had filed false sales and use tax returns with the state on sales and leases of slot machines and slot components. Anchor later was acquired and merged into IGT.
In a filing with the Securities and Exchange Commission, IGT has said it was advised that it had “a good-faith legal basis” for not paying the taxes, although the company might wind up owing something.
Nevada’s 1999 whistleblower law gives people with inside knowledge about such cases a percentage of any amount eventually collected by the state.