Within the last seven years, New York state and New York City have both enacted a False Claims Act (FCA) that, like their federal analog, allow private whistleblowers, as well as the government itself, to file suit to redress fraud against the government. Both statutes provide for treble damages plus per-claim penalties and award whistleblowers a share of any money recovered as a result of their action. The second quarter of 2012 brought several noteworthy developments highlighting these anti-fraud statutes, which are discussed in this article.
Attorney General Files Lawsuit
In a ground-breaking development on April 19, 2012, New York State Attorney General Eric T. Schneiderman filed a lawsuit relying on the New York State False Claims Act, N.Y. State Fin. Law §187 et seq. (NYS FCA), to seek over $300 million from Sprint Nextel for allegedly underpaying sales taxes.1 This action was the culmination of over a year of increased attention by Schneiderman to the NYS FCA and particularly to a 2010 amendmentwhich is unique among the federal and various state FCAs and which was sponsored by Schneiderman when he was state senatorextending the NYS FCA to misrepresentations relating to taxes.2
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