Faruqi & Faruqi, LLP Announces Investigation of Sprint Nextel Corp. over unpaid taxes

Posted on Apr 23 2012 - 10:28am by Mike Wewerka

Last week we reported on a story where New York’s Attorney General, Eric Schneiderman, filed suit againt Sprint Nextel for $100 million in unpaid taxes. Schneiderman’s claim is that Sprint knowingly failed to collect and pay taxes for over seven years in the state of New York as a way to undercut its competitors, offering a cheaper price overall.

Today it was announced that a national securities law firm, Faruqi & Faruqi, LLP, will begin an investigation against the Now Network, to see if they did in fact violate the law, and if they did it knowingly. If found guilty, Sprint could be forced to pay over $300 million according to the New York False Claims Act.

Sprint’s general counsel issued a statement Friday, denying any wrong doing and affirming they would “fight” this suit.

“This complaint is without merit and Sprint categorically denies the complaint’s allegations. We have collected and paid over to New York every penny of sales taxes on mobile wireless services that we believe our customers owe under New York state law. 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. We intend to stand up for New York consumers’ rights and fight this suit.”

A lawsuit like this certainly doesn’t help Sprint’s public image, especially when they are still purging customers left and right. We’ll be keeping a close eye on this suit, as it makes us wonder, if Sprint did knowingly violate the law, did they do it in more states ofther than just New York? If so, this could open a whole bag of worms if found guilty.

Press release below:

Faruqi & Faruqi, LLP Announces Investigation of Sprint Nextel Corp.

NEW YORK, April 20, 2012 /PRNewswire/ – Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential securities fraud at Sprint Nextel Corporation (“Sprint” or the “Company”) (NYSE: S).

The investigation focuses on whether Sprint and its executives violated federal securities laws by failing to disclose that Sprint knowingly evaded New York state taxes.  On April 19, 2012, New York Attorney General Eric Schneiderman sued Sprint for more than $300 million for deliberately failing to pay sales taxes for seven years.  The Attorney General’s lawsuit is the continuation of a whistle-blower action filed in New York in March 2011, which alleged that Sprint did not collect and pay sales taxes on flat-rate access charges for wireless calling plans, costing state and local governments more than $100 million.  The suit, which alleges claims under the New York False Claims Act, would require Sprint to pay three times its underpayment value in addition to penalties – a sum greater than $300 million – should Sprint be found liable.

Request more information now by clicking here:  www.faruqilaw.com/S.

Take Action
If you purchased Sprint securities and would like to discuss your legal rights, visit www.faruqilaw.com/S.  You can also contact us by calling Richard Gonnello or Francis McConville toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to rgonnello@faruqilaw.com or fmcconville@faruqilaw.com.  Faruqi & Faruqi, LLP also encourages anyone with information regarding Sprint’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.

Attorney Advertising.  The law firm responsible for this advertisement is Faruqi & Faruqi, LLP (www.faruqilaw.com).  Prior results do not guarantee or predict a similar outcome with respect to any future matter.  We welcome the opportunity to discuss your particular case.  All communications will be treated in a confidential matter.

369 Lexington Avenue, 10th Floor
New York, NY 10017
Attn:  Richard Gonnello, Esq.
Francis McConville, Esq.
Telephone: (877) 247-4292 or (212) 983-9330

SOURCE Faruqi & Faruqi, LLP