Attorney General James Secures $4.5 Million from Travel Companies for Scheme to Keep away from Taxes

NEW YORK – New York Attorney General Letitia James immediately secured $4.5 million from journey reserving firm Fareportal, Inc. (Fareportal) and three of its affiliated journey corporations – WK Travel, Inc., Jen NY, Inc., and Tripmama, Inc. – for failing to pay over one million {dollars} in state company taxes. An investigation by the Office of the Attorney General (OAG) discovered that the businesses violated the tax provisions of the New York False Claims Act by concealing tens of millions of {dollars} of taxable dividends from the state’s tax authorities. The corporations deliberately misclassified these dividends as “management fees” paid to a separate firm, Magic Travel, LLC (Magic Travel), which had the identical proprietor because the journey corporations. The journey corporations then deducted the sham charges from their revenue to make it seem that their taxable income have been far decrease than they really have been, which allowed them to keep away from paying greater than one million {dollars} in taxes.  

“New Yorkers’ taxes help support our roads, trains, and airports – the same infrastructure that travel agencies like Fareportal depend on for their success,” stated Attorney General James. “Fareportal and its affiliates operated a brazen scheme to avoid paying taxes, and now they are being held accountable. My office has zero tolerance for tax dodgers, and we will continue to use every tool at our disposal to ensure all New Yorkers pay their fair share.”

From 2007 to 2012, Fareportal and its affiliated corporations averted paying over one million {dollars} in New York state company taxes by misclassifying dividend funds as administration charges. The corporations paid a portion of their income to Magic Travel as administration charges, after which deducted these funds as bills, decreasing their tax burden. But the OAG’s investigation revealed that the charges have been grossly inflated – Magic Travel had no staff and merely held the non-public investments of the journey corporations’ proprietor, who already labored as CEO of Fareportal. In whole, the businesses paid roughly $145 million in administration charges to Magic Travel over the five-year interval.

Under state and federal tax regulation, many of the administration price funds to Magic Travel have been in reality dividends distributed to the proprietor, which the businesses ought to have paid way more taxes on than they did. The corporations and their proprietor have been conscious of this, however continued to take the inflated tax deductions regardless of express warnings from exterior accountants that the charges might be labeled as dividend funds and consequence within the corporations being chargeable for tens of millions of {dollars} in federal, state, and native taxes.

The investigation started after a whistleblower filed a qui tam motion beneath the New York False Claims Act. The New York False Claims Act permits personal people to file civil actions on behalf of the federal government and to share in any restoration. Under the settlement, Fareportal and its affiliated corporations pays $4.5 million, with roughly $1 million going to the whistleblower. 

Attorney General James beforehand secured $2.6 million from Fareportal in an unrelated case involving its misleading use of “dark pattern” advertising and marketing practices to control prospects by making a false sense of urgency round ticket and lodge room availability.

Attorney General James has persistently taken motion to carry companies and their house owners accountable for tax evasion. In February, Attorney General James secured $4.7 million from two New York City truck rental corporations and their accountant for a decade-long tax evasion scheme. In September 2025, Attorney General James introduced the indictment of prime executives of a strip membership firm for his or her roles in a multimillion greenback legal tax fraud and bribery scheme. In November 2024, Attorney General James secured greater than $6 million from Sotheby’s for utilizing fraudulent strategies to safe tax breaks for its shoppers on tens of tens of millions of {dollars} of artwork purchases. In September 2022, Attorney General James secured $50 million from two corporations for promoting cigarettes with out paying the required state taxes.

The matter was led by Assistant Attorney General Susan Jacquemot of the Taxpayer Protection Bureau, with the help of Legal Support Analyst Bianca LaVeglia. The Taxpayer Protection Bureau is led by Bureau Chief Thomas Teige Carroll and Deputy Bureau Chief Scott J. Spiegelman and is part of the Division for Economic Justice, which is led by Chief Deputy Attorney General Chris D’Angelo and overseen by First Deputy Attorney General Jennifer Levy.