The heirs of the defunct Barneys luxury brand are embroiled in a legal dispute, with claims that a complex tax fraud scheme could have defrauded New York state out of $20 million. Bob Pressman, 71, grandson of the retailer’s founder, Bernie Pressman, has filed a lawsuit against family members, alleging they conspired to evade both income and real estate taxes by misrepresenting his mother, Phyllis Pressman’s residence.
The suit contends that, contrary to claims she lived in West Palm Beach, Florida, Phyllis actually resided in her Southampton, New York mansion for the final six years of her life. Phyllis, who passed away last year at 95 and was renowned for her impeccable taste, reportedly had a fortune exceeding $100 million.
“Phyllis has openly shared that she dislikes Florida and has no plans for it to be her permanent home,” the lawsuit states.
The estate includes a 2.3-acre oceanfront property in Southampton listed at $38.5 million, along with an Upper East Side apartment priced at $3.95 million, which is currently under contract. This fall, some of her jewelry and art will be auctioned, featuring works from luxurious brands and notable American artists.
Previously, Bob Pressman had written unpublished works critiquing the family, which had caused significant rifts. Sources indicate he was excluded from his mother’s will after years of conflict, particularly revolving around the alleged tax fraud. The legal trust reportedly states, “Bob won’t receive anything for reasons he understands well.”
The fallout from Barneys’ bankruptcy in 1996 has also led his sisters, Nancy and Elizabeth, to sue Bob over accusations of embezzling $30 million. Bob has denied this claim, insisting it was previously settled in court. An award of $11.3 million was given to the sisters in 2002, leading to further disputes.
Interestingly, Bob has accused his brother Gene of financial mismanagement, with Gene suggesting Bob misrepresents facts for his own benefit. The relationship among the Pressman siblings seems particularly fraught, with accusations flying in both directions.
The recent lawsuit suggests that the family could owe over $50 million in back taxes and penalties. Bob claims he is acting as a whistleblower under New York’s False Claims Act, having originally filed in July.
Phyllis had moved to Florida after her husband’s death in 2000, yet the lawsuit argues she misrepresented her residence to benefit her children. Before her passing in late 2023, the three siblings allegedly assisted in this misinformation to increase their inheritance by evading New York property taxes.
Evidence provided in the complaint includes frequent prescriptions filled at a local pharmacy and regular usage of her Southampton residence during the years in question.
Bob declined to comment on the lawsuit, nor did his sisters. Gene has not responded to inquiries about the case.
If the lawsuit succeeds, it could stand among the significant cases on tax fraud in New York. The state has reportedly recovered $674 million from delinquent taxpayers since the establishment of its Taxpayer Protection Bureau in 2010.
Notably, one of the biggest settlements under the False Claims Act occurred in 2021, totaling $105 million, involving Swedish hedge fund manager Thomas Sandel, who allegedly misrepresented his office’s location.
