The New York Attorney General’s Office has reportedly recovered $36 million from clothing retailer H&M after the company retained millions of dollars in unused gift card funds that should have been transferred to the state.

The settlement resolves allegations that H&M repeatedly lied about transferring the funds and knowingly concealed efforts to violate state law, Attorney General Letitia James said Thursday. The retail company kept the money in its bank accounts rather than transferring it to the New York Office of Unclaimed Funds, violating a state law that requires issuers to turn over unused balances of gift cards that were sold over five years ago.

“My office has zero tolerance for companies that disregard the law and line their pockets with money that belongs to hardworking people,” James said in a statement. “For years, not only did H&M illegally keep unused gift card money that customers paid for, but they then lied about it to the state. Violating the law is not trendy or tolerable, and today H&M will pay millions of dollars for its wrongdoing. New Yorkers can trust that my office will always stand up to unscrupulous companies and hold them accountable.”

HOUSE PROGRESSIVE CAUCUS CHAIRWOMAN SPURNS INCUMBENT DEMOCRAT FOR LEFT-WING RIVAL

The retailer company told the Washington Examiner it "disagrees with the characterizations" of the alleged misconduct.

"H&M cooperated with the New York State Office of the Attorney General during the course of its investigation and has agreed to resolve this matter," the company said in a statement. "All funds received from gift card sales have always belonged to our customers for their personal use. No H&M customer gift cards have or will be impacted by this settlement, as H&M has and will continue to offer gift cards without expiration dates."

The $36 million settlement ends a yearslong saga that began in 2008 when H&M first learned it needed to transfer unused funds to the state government, prompting the retailer to hire an outside company to use as a front for pocketing the money, James said. H&M hired an out-of-state company, identified as “Company A” in the case report, that “gave the false impression” it would be handling the clothing company’s gift card business, James's office said.

However, H&M continued to run the business itself and allowed the money from gift card sales to remain in its bank accounts, James alleged. The company then submitted a letter to the state that falsely asserted it had “paid out tens of millions of dollars” on the gift cards despite no payments being made, she said.

New York officials approached the company again in 2011 to inquire about the balances, with the retailer once more falsely asserting it had transferred the gift card funds to an out-of-state company that was not obligated to transfer the money to the state, according to James's office. A whistleblower for the company later reported the misconduct, prompting James to open her investigation.

“New Yorkers with unused balances on their H&M gift cards now can recover their money under today's agreement,” said New York State Comptroller Tom DiNapoli. “The Comptroller’s Office of Unclaimed Funds stands at the ready to assist those who have money coming to them. I thank Attorney General Letitia James and her office for their work to help my office hold companies accountable and ensure that unused gift card money goes to the consumer.”

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

H&M will pay $28 million to the state, with about $18 million going toward the Abandoned Property Fund that customers with unused balances can use to claim their money, and $7.74 to the whistleblower. The Thursday statement makes no mention of whether H&M admitted wrongdoing as part of the agreement.