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Sprint to Pay $330 Million in Whistleblower Tax Fraud Settlement

Sprint, the fourth-most popular mobile phone carrier in the United States, recently agreed to settle a whistleblower lawsuit to the tune of $330 million.

The whistleblower in the case alleged the company had been regularly committing tax fraud since 2005, and first brought allegations against Sprint in 2011. The Attorney General’s office decided to join the case in 2012 when it filed a superseding complaint that alleged the company purposefully under-collected and under-paid millions of dollars in state and local taxes in New York on its flat-rate wireless plans dating back to 2005. It was the office’s first-ever tax enforcement action filed under the New York False Claims Act, which was expanded in 2010 to cover tax claims as well.

Context of the deal

The money recovered in this settlement is the most ever recovered by the Attorney General under the New York False Claims Act, as well as the most money ever recovered by a single state in a False Claims Act action. The settlement figure also nearly doubled the amount of income Sprint generated in the third quarter of 2018.

The news of the settlement broke in December, right as Sprint and T-Mobile were going through the approval process for a merger deal. The national security panel overseeing the case approved the deal, but administration was still pending at the time from the FCC and DOJ. Even before the news of the settlement broke, the merger was getting significant criticism from other major organizations.

For more information about the steps to take if you become aware of fraud or other forms of wrongdoing in your company, contact an experienced whistleblower lawyer at Kardell Law Group.

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