Sprint will pay $330 million to settle a False Claims Act case filed by the New York Attorney General alleging that Sprint knowingly failed to collect and remit more than $100 million in state and local sales taxes owed on its flat-rate wireless calling plans sold to New Yorkers. The $330 million recovery is not only the largest-ever recovery by the New York Attorney General resulting from an action filed under the New York False Claims Act, but it is the largest-ever recovery by a single state in an action brought under a state false claims act.
“Sprint knew exactly how New York sales tax law applied to its plans – yet for years the company flagrantly broke the law, cheating the state and its localities out of tax dollars that should have been invested in our communities,” said Attorney General Underwood. “Now, Sprint will pay the price with this record-setting settlement. This should serve as a clear reminder that the New York False Claims Act protects New Yorkers from companies that attempt to flout their obligations under New York tax law.”
The $330 million settlement announced today resolves this tax enforcement action under the New York False Claims Act brought by the Attorney General. At least twenty-nine states, the District of Columbia, and the federal government have passed False Claims Acts, laws which allow whistleblowers and the government to recover treble damages from companies or individuals that defraud the government. However, only the New York False Claims Act broadly covers all types of tax fraud.