United States of America v. Isaac M. Neuberger

CourtDistrict Court, D. Maryland
DecidedJanuary 23, 2026
Docket1:22-cv-02977
StatusUnknown

This text of United States of America v. Isaac M. Neuberger (United States of America v. Isaac M. Neuberger) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States of America v. Isaac M. Neuberger, (D. Md. 2026).

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

UNITED STATES OF AMERICA, *

Plaintiff, *

v. * Civil Action No. EA-22-2977

ISAAC M. NEUBERGER, *

Defendant. *

MEMORANDUM OPINION Plaintiff United States of America initiated this action on November 16, 2022, pursuant to the Federal Priority Statute, 31 U.S.C. § 3713, seeking a judgment against Defendant Isaac M. Neuberger “for transferring the assets of [ ] Lehcim Holdings, Inc. [(Lehcim)] to third parties before paying the United States’ claim for income taxes at a time when Lehcim . . . was insolvent.” ECF No. 1; see also ECF No. 41. On August 4-6, 2025, the Court held a bench trial to determine liability and damages, if any, arising from the United States’ claim. ECF Nos. 127– 129. On October 23, 2025, pursuant to Federal Rule of Civil Procedure 52, the Court issued a Memorandum of Decision that found Mr. Neuberger personally liable for the United States’ claim pursuant to 31 U.S.C. § 3713(b). United States v. Neuberger, Civil Action No. EA-22- 2977, 2025 WL 2997558 (D. Md. Oct. 23, 2025); ECF No. 144. Thereafter, at the Court’s request for additional briefing, the parties filed memoranda of law specifically addressing the issue of damages.1 ECF Nos. 147–150; 152–153. The Court heard oral argument on January 7, 2026. ECF No. 154. For the reasons set forth below, the Court will enter judgment in favor of the United States and against Mr. Neuberger in the amount of $1,880,987.96.

1 The issues of liability and damages were not bifurcated at trial. Rather, the Court requested additional briefing on the issue of damages because the parties’ post-trial submissions did not comprehensively address damages and because, as discussed herein, see II., infra, case law does not clearly illuminate the appropriate method of assessing damages in this case. I. BACKGROUND The United States’ sole cause of action arises under the Federal Priority Statute, which provides, in pertinent part, that “[a] claim of the United States Government shall be paid first when . . . a person indebted to the Government is insolvent and . . . the debtor without enough property to pay all debts makes a voluntary assignment of property . . . [or] . . . an act of bankruptcy is committed.” 31 U.S.C. § 3713(a)(1)(A)(i), (iii). Under the Federal Priority Statute, “the term ‘claim’ . . . means any amount of funds . . . that has been determined by an

appropriate official of the Federal Government to be owed to the United States by a person, organization, or entity other than another Federal agency.” 31 U.S.C. § 3701(b)(1). “Federal courts at all levels of review have consistently held that this broad definition encompasses federal tax debt.” Neuberger, 2025 WL 2997558, at *12; ECF No. 144 at 232 (collecting cases). Section 3173(b) provides that a “representative . . . paying any part of a debt of the person . . . before paying a claim of the Government is liable to the extent of the payment for unpaid claims of the Government.” 31 U.S.C. § 3713(b). “Although the statutory language may suggest strict liability, courts have interpreted Section 3713(b) as requiring evidence that: (1) the representative transferred or distributed the debtor’s assets before paying an antecedent claim of the United States; (2) when the debtor is insolvent; and (3) with knowledge or notice of the

United States’ claim.” Neuberger, 2025 WL 2997558, at *16; ECF No. 144 at 32. After trial, the Court found Mr. Neuberger personally liable under Section 3713(b) because he was Lehcim’s representative; had knowledge of the United States’ claim for tax liabilities; and played an integral role in the development, oversight, and execution of a plan to pay entities other than

2 Page numbers refer to the pagination of the Court’s Case Management/Electronic Case Files (CM/ECF) system printed at the top of the cited document, except that references to the trial transcript include both the transcript page and line numbers and references to exhibits include both the exhibit number and, as applicable, the Bates number of the referenced page(s). the United States when Lehcim was insolvent. Neuberger, 2025 WL 2997558, at *16-17; ECF No. 144 at 31–33. To contextualize the following discussion of damages, a brief summary of the salient issues related to the United States’ claim is necessary.3 As relevant here, the Court found that “[f]or the tax years 2010 through 2020 Lehcim reported liabilities on the balance sheet of its Form 1120 [U.S. Corporate Income Tax Return] that primarily consisted of the three Nightingale loans.” Neuberger, 2025 WL 2997558, at *4; ECF No. 144 at 7 (citing ECF No. 114-1 ¶ 45;

Plaintiff’s Exhibit (PX) 008–PX 018). “During these same tax years, Lehcim claimed substantial tax deductions each year for the 18 percent interest accruing on the 2002 Nightingale loan.” Neuberger, 2025 WL 2997558, at *4; ECF No. 144 at 7 (citing ECF No. 114-1 ¶ 46). The parties stipulated, and the Court found, that by July 2018, Mr. Neuberger was aware of the Internal Revenue Service’s (IRS) preliminary conclusion that Lehcim’s loan interest deductions on its 2010 to 2015 returns were improper and that Lehcim owed additional taxes for those years. Neuberger, 2025 WL 2997558, at *4; ECF Nos. 114-1 ¶ 49; 144 at 8; Joint Exhibit (JX) 023. The parties further stipulated, and the Court further found, that Mr. Neuberger received a copy of the letter the IRS sent to Lehcim on March 14, 2019. Neuberger, 2025 WL 2997558, at *5; ECF Nos. 114-1 ¶¶ 50, 54; 144 at 8; JX007. At trial, IRS employee Pamela

Harris testified that this letter, commonly referred to as a “30-day letter,” “is a report that is issued at the conclusion of an examination” (or audit). ECF No. 137 at 16:18–17:2. This letter “gives the taxpayer[ ] 30 days to [ ] agree, to request a conference with a manager, to provide additional information, or to write a protest and request an appeals conference.” Id. at 17:6–9. The March 14, 2019 (or 30-day) letter identified the proposed tax deficiencies, associated

3 The Court’s prior Memorandum of Decision sets forth a more fulsome factual background. United States v. Neuberger, Civil Action No. EA-22-2977, 2025 WL 2997558, at *2-9 (D. Md. Oct. 23, 2025); ECF No. 144 at 3–19. penalties, and interest for Lehcim for the years 2010 to 2015 in the amount of $1,880,987.96.4 Neuberger, 2025 WL 2997558, at *5; ECF Nos. 114-1 ¶¶ 51–52; 144 at 8; JX007 at 0067–0070. The parties further stipulated, and the Court found, that on November 20, 2019, the IRS mailed a statutory notice of deficiency to Lehcim (at the address of Mr. Neuberger’s law firm), which identified a liability of $1,435,245 in unpaid taxes and penalties (exclusive of interest). Neuberger, 2025 WL 2997558, at *5; ECF Nos. 114-1 ¶ 58; 144 at 8–9; JX015 at 0204–0205. The amount of the tax liability and penalties identified in this notice and the previously issued

30-day letter are the same. JX007 at 0067–0070; JX015 at 0210, 0212. At trial, Ms. Harris testified that this notice is “a legal report” that the IRS issues “at the conclusion of an examination” (or audit). ECF No. 137 at 19:3–5.

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United States of America v. Isaac M. Neuberger, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-of-america-v-isaac-m-neuberger-mdd-2026.