Indiana gets $159K from Sephora tax fraud settlement

International beauty supply chain Sephora USA Inc. has paid Indiana a settlement to end a fraud lawsuit filed against it, Attorney General Curtis Hill’s office announced.

The Hoosier state received a $159,349 payment from Sephora after settling a lawsuit filed in the name of the state by Stephen B. Diamond P.C., a Chicago attorney known as the “king of qui tam.” Diamond has reportedly earned nearly $12 million, filing more than 1,000 tax fraud lawsuits, according to a Bloomberg Law investigation.

The case, State of Indiana ex rel. Stephen B. Diamond P.C. v. Sephora USA, Inc., Cause No. 49D13-1602-PL004602, alleged the international beauty retail chain violated the Indiana False Claims Act by making false statements in connection with its failure to collect gross retail taxes on shipping and handling charges for its internet sales to Indiana consumers.

The investigation and settlement resulted from the coordinated efforts of the Litigation Division of the Office of the Attorney General, Hill’s office said Wednesday.

“My office works tirelessly on behalf of Hoosier taxpayers to root out fraud against the government and recover taxpayer monies,” Hill said. “Settlements such as this one send a message to all business entities that we will hold them accountable for following the law and being truthful.”

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