The following are profiles of unclaimed property audits that went awry. These audits provide insight into the auditor's methods and motives, as well as stress the importance of ongoing compliance.
Computer Associates Inc.
CA submitted a Delaware VDA at $685,000. Delaware rejected the VDA, assessed CA $8.2 million. CA files suit and eventually settles with Delaware for $17.65 million. The Computer Associates audit and litigation stress the importance of full disclosure and the underlying risk of a Delaware VDA.
Young America Corporation
Young America, a rebate fulfillment company, was audited and eventually sued to enforce compliance with unclaimed property laws in 45 states. Eventually, Young America's clients, including T-Mobile, Walgreens and Sprint, settled rebate liabilities to end their involvement in the litigation. The Young America audit and litigation reveal the importance of monitoring third-party vendor compliance and that you cannot pass your liability to another holder company.
Select Medical Corporation
The Select Medical audit nightmare is not over yet! In fact, this nightmare has just reached the litigation point, after an audit was conducted following a Voluntary Disclosure Agreement with the state of Delaware. Select Medical claims to have full records for the time period of the audit, but Delaware and Kelmar disregarded these records in conducting an extrapolation. The result is an assessment that is approximately equal to what the company paid other states for the time periods in question.
Note: All information in the above summaries is publicly available, through court records, press releases, or news articles or posts. No confidential information was used to produce these summaries.