My Pillow will pay the State of New York $1.109 million to settle a False Claims Act case in which the company knowingly failed to collect New York use taxes on internet and telephone sales to New York customers. This is the first New York False Claims Act settlement for unpaid taxes on internet and telephone sales since the New York False Claims Act was enacted in 2010. The evidence showed that My Pillow sold merchandise at craft shows and through the internet and telephone to New York customers.
The whistleblower in this case will receive 20% or $221,000 plus the right to seek legal fees and costs of the case. It is anticipated that similar cases will be filed in those states allowing such actions to recover unpaid sales and use taxes. The whistleblower was represented by Stephen Diamond and Tim McGinnis of New York City.
Jeff Newman represents whistleblowers.
