Judge Says Sprint Must Face NY Tax Fraud Case

Sprint could be going to court as a U.S. judge refused to dismiss the New York state attorney general’s lawsuit claiming that the carrier deliberately failed to pay sales taxes. The decision which was made public this Monday showed that New York Supreme Court Justice O. Peter Sherwood denied a motion of the third-largest U.S. wireless carrier to dismiss the lawsuit.

Attorney General Eric Schneiderman took over a lawsuit filed by a whistle-blower in 2011. The information provided by the whistle-blower claims that Sprint improperly billed their customers for the use of their wireless services for the past seven years which has resulted in a $100 million loss of the US government. The suit claims that Sprint is in violation of the New York False Claims Acts.

Schneiderman said on this decision that “As the very first case prosecuted under a new provision in state law allowing for tax fraud claims — and with strong protections for whistleblowers — this ruling sends a message that tax dodgers will be exposed and prosecuted to the fullest extent of the law.”

Judge Sherwood said that the state has a valid basis for the claim under the law. Lawyers for both sides are ordered to appear on a hearing which is scheduled on July 24.

John Taylor, a spokesman for Overland Park, Kansas-based Sprint said that “Sprint is disappointed in the court’s decision, and we intend to file an appeal shortly. With this lawsuit, the Attorney General’s office is claiming New York consumers, who already pay some of the highest wireless taxes in the country, should pay even more. As we have in the past, we will continue to stand up for New York consumers’ rights and fight this suit.”

The attorney general is seeking damages worth three times that of the underpayment plus penalties.

via cnet

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