About 30,000 New York customers were involved, Cuomo said.
"H&R Block's aggressive peddling of fee-laden retirement accounts that were virtually guaranteed to lose money needlessly cost families across the country millions of their hard-earned dollars," Cuomo said in a statement. "This settlement will provide a measure of relief in these difficult times."
The settlement resolves a lawsuit filed by Cuomo. It alleged that senior managers at H&R Block knew many customers were losing money on the IRAs, yet took no action.
H&R Block officials were not immediately available for comment.Cuomo's office claimed the failure to disclose fees and warn consumers that interest paid would not cover the fees violated New York's consumer fraud law. The New York settlement coincides with an independent settlement of various consolidated federal private lawsuits, based upon the same allegations, pending before the U.S. District Court in Kansas City, Mo., where H&R Block is based.