Government found liable in informant death cases.

In a fascinating, but tragic, case being followed closely in the Boston, MA area a Federal Judge found for two of the families that were victims of the rogue informants Whitey Bulger and Steven "The Rifleman" Flemmi. It was alleged at trial that Flemmi caused the murder of a local fisherman from the city of Quincy, John McIntyre, back in 1984 and as a result of that murder the judge order damages of $3 million to be paid to his mother and sister.

 The Boston Globe has a great summary on the verdict.

This was a notable victory in a string of cases that have been brought as a result of the stunning revelation that the FBI had known underworld figure and mob boss Whitey Bulger on it's payroll as an informant, along with his associate and assassin Steven Flemmi, and that they were allowed to murder a string of victims during the 1980s with the full knowledge of their FBI contact, John J. Connolly Jr. This was a negligent supervision case, as it was argued that the FBI failed to adequately supervise and monitor the actions of Connolly, and that failure led to the deaths of the various victims, as well as the cover up of who the actual murders were.

This was a notorious case in New England over the last few years, but until now the Justice Dept had fought the suits brought by the victims families in a most aggressive fashion arguing that the statute of limitations had run out, claiming immunity, etc.

As a settlement guy i'm curious as to how these cases will be treated from a tax basis. Wrongful death? Personal injury? Or do they fall under the taxable provisions of section 104(a)(2) and how does the recent Murphy vs IRS ruling impact the potential tax status of these awards? 

Posted on September 6, 2006 .