Sprint to pay $330 million settlement to end whistleblower tax fraud lawsuit

After a long-running whistleblower lawsuit that alleged Sprint had been committing tax fraud since 2005, the 4th most popular US carrier has agreed to settle the case with a $330 million fine.

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Law group Menz Bonner Komar & Koenigsberg secured the settlement in the lawsuit that started back in 2011. The case was based on a whistleblower bringing charges against Sprint for underpaying taxes in New York.

The firm represents the whistleblower who brought forward the allegations against Sprint in 2011. The Attorney General’s office joined the case in 2012 when it filed a superseding complaint alleging Sprint deliberately under-collected and under-paid millions of dollars in New York state and local sales taxes on flat-rate wireless calling plans starting in 2005. The Attorney General’s lawsuit was the Office’s first ever tax enforcement action filed under the New York False Claims Act, which was amended to cover tax claims in 2010.

The law firm says this case is notable in a few aspects, chiefly being the “largest recovery ever by a single state in an action brought under a state false claims act.”

The $330 million recovery is not only the largest by the Attorney General resulting from an action filed under the New York False Claims Act, but it is the largest recovery ever by a single state in an action brought under a state false claims act.

This news comes as Sprint and T-Mobile are in the middle of getting approval for a merger deal. This week a national security panel cleared the deal, but the carriers still need approval from the FCC and DOJ. The merger has also seen a good amount of criticism from some major organizations.

This $330 million settlement more than wipes out the $196 million of income the Sprint generated in Q3.

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Avatar for Michael Potuck Michael Potuck

Michael is an editor for 9to5Mac. Since joining in 2016 he has written more than 3,000 articles including breaking news, reviews, and detailed comparisons and tutorials.