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Ninja Turtles tax fraud plan alleged by Ex-Viacom VP in whistleblower suit

Ninja Turtles tax fraud planAs initially reported by Reuters, a former vice president of Viacom, Inc. has sued the media giant claiming that she was fired in retaliation for her opposition to Viacom’s alleged Ninja Turtles tax fraud plan, which involved illegally avoiding paying U.S. taxes in relation to the international licensing rights for Teenage Mutant Ninja Turtles (“TMNT”).

Ms. Williams Fired While on Maternity Leave

The complaint filed by Nataki Williams alleges that she was fired in April 2014 while she was away from Viacom on maternity leave after Viacom failed to acquiesce to her objection to Viacom’s alleged Ninja Turtles tax fraud plan in 2013 to transfer the TMNT rights to a Netherlands-based entity in order to avoid the U.S. tax burden.  Ms. Williams further alleged that the scheme evolved to include the rights to other children’s characters such as Dora the Explorer and SpongeBob SquarePants.

In her complaint, which alleges claims under Sarbanes-Oxley and Dodd-Frank, Ms. Williams stated, “Ms. Williams was actually fired in retaliation for her internal whistleblowing of an unlawful tax avoidance scheme that would have saved Viacom millions, and that Ms. Williams reasonably believed was fraudulent.”  Viacom has responded that, “Nataki Williams is a former Viacom employee who was terminated in 2014 for fraudulently claiming company benefits to which she was not entitled,” and “[h]er legal claims are completely without merit and we will vigorously defend against these claims in court.”

Viacom “Hatches” Ninja Turtles Tax Fraud Plan

According to an article from the New York Post, shortly after Ms. Williams was promoted to vice president in 2010, she learned that Viacom was “hatching a plan to attribute TMNT’s revenue to the Netherlands for tax purposes.”  Ms. Williams said that Viacom was hoping to make the international business transactions look like they were on the up-and-up by hiring a worker in the Netherlands to “make unimportant changes to draft contracts and sign off on contracts.”  However, “[i]n reality, all of the negotiating and legal work conducted around these contracts was happening in New York,” the complaint says.

Even still, Viacom’s alleged plan began to stall in 2010 on account of the fact that TMNT revenue “was relatively low.”  However, the plan was reinvigorated in 2013 when it was expanded to include the Netherlands purchasing the rights to Dora the Explorer and SpongeBob SquarePants.  Allegedly, Viacom, who owns MTV, Nickelodeon, and VH1, also wanted to expand their plan to include other properties it owned.

Viacom’s Reasoning for Firing Ms. Williams

If it wasn’t bad enough that Ms. Williams was fired while away on maternity leave, the reason Viacom has given for her firing is even more interesting.  Viacom claimed that Ms. Williams had provided inaccurate information on her W2, claiming that she had listed her child’s father as her spouse, even though the two had never married.

As part of her lawsuit, Ms. Williams is seeking reinstatement to her position, in addition to back pay with interest.  In lieu of reinstatement, Ms. Williams is asking for front pay as well.  The case is Williams v. Viacom International Media Networks Inc, U.S. District Court, Southern District of New York, No. 16-00029.

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