Lawsuit Alleges Sprint Overcharged Government $21 Million for Wiretaps

March 3, 2014 20:53 pm · 15 comments

The U.S. government sued Sprint Communications Inc. in federal court in San Francisco today for allegedly overcharging federal law enforcement agencies $21 million between 2007 and 2010 for the costs of complying with court-ordered wiretaps and other surveillance.

The lawsuit, filed by lawyers from the office of U.S. Attorney Melinda Haag in San Francisco, seeks triple-damage compensation and additional civil penalties under the U.S. False Claims Act.

It alleges the telecommunications company illegally included the hidden charges for the costs of equipment upgrades needed for the intercepts in its bills to agencies such as the FBI and U.S. Drug Enforcement Administration.

“As alleged, Sprint overbilled law enforcement agencies for carrying out court-ordered intercepts, causing a significant loss to the government’s limited resources,” Haag said.

Sprint Communications, a subsidiary of Overland, Kan.-based Sprint Corp., provides wireless service to 54 million customers nationwide, according to its financial statements.

Sprint spokesman John Taylor denied the allegations said the company “will defend this matter vigorously.”

“Under the law, the government is required to reimburse Sprint for its reasonable costs incurred when assisting law enforcement agencies with electronic surveillance. The invoices Sprint has submitted to the government fully comply with the law,” Taylor said.

The court-ordered intercepts at issue in the bills include wiretaps; pen registers, which record the numbers called from a given telephone line; and trap devices, which record the numbers from which calls are made to a line.

Federal law requires telecommunications companies to provide government agencies with information and technical assistance needed to carry out the intercepts, and allows the companies to bill for “reasonable expenses” in doing so.

Since 1994, the law has also required the companies to install any upgrades needed to provide the assistance. But in 2006, the Federal Communications Commission said the companies couldn’t bill the government for the costs of upgrades in equipment and services.

The lawsuit alleges that the hidden costs included in Sprint’s bills between 2007 and 2010 resulted in Sprint inflating its charges during that period by 58 percent.

1 TinFoiler March 3, 2014 at 9:00 PM

“included the hidden charges”. LMFAO!
When is that last time anyone read their statement – all kinds of non-essential BS charges. It’s okay to sock it to us, but the governoids don’t like it when the shoe is on the other foot. Hypocrites.

2 Ted K., SuperMax March 3, 2014 at 9:11 PM

I gotta wonder what is worse.. the Feds violating the Constitution by the wiretaps or Sprint’s alleged overbilling.

3 Mimi (original) March 3, 2014 at 9:15 PM

What is it they say, “absolute power corrupts absolutely?”

4 NRA #1 fan and member March 3, 2014 at 9:18 PM

Sprint sucks and horrible customer service……. it’s all about Verizon or nothing.

Guns don’t kill people kill.

5 Lost and Happy March 3, 2014 at 9:48 PM

#1-4 posts for the posts of the year!

6 Both very honest folks March 3, 2014 at 9:56 PM

Shocking

7 NRA Supporter March 3, 2014 at 10:02 PM

LOL…well I love Sprint and well good ole uncle sam got the bills and paid for them. Read the Fine Print next time! I hope this gets thrown out on it’s ears.

8 Dorothy March 3, 2014 at 10:59 PM

Sprint overcharges everyone. Why should the Gov be different?

9 Lawsuit March 4, 2014 at 5:24 AM

Who do we sue to get back the100s of millions of cost overruns for healthcare.gov?

10 adingoatemybaby March 4, 2014 at 5:48 AM

More likely this is government incompetence. The government probably had an audit on their telecom activity by a third party (e.g.- Price Waterhouse). The third party likely found extensive over payment due to lack of management. Now the government is blaming Sprint so they don’t look like a mismanaged dung heap. Sure the bill came from Sprint but someone kept placing orders without cleaning up the prior ones. That’s what happens when you get to spend other peoples money. All of the opaque billing was likely at the request of the government agency in order to hide the charges to avoid getting caught like they just did.

11 Oh, the HILARITY ! March 4, 2014 at 6:20 AM

You people crack me up !!

12 Our money March 4, 2014 at 6:23 AM

This is our( tax) money. The government is not
interested in the inane b-s that accounts for the
vast majority of cell calls. Only paranoids think
” someone’s” listening in on their calls. These were
Legal wire taps etc..
This is no different then the bid rigging scam, the
Bay bridge swindle, or doctors that cheat Medi care.

13 Shelly March 4, 2014 at 6:53 AM

Hey Federales, meet corporate America!

14 kax March 4, 2014 at 10:35 AM

our government is foul…..so is sprint….

15 jtkatec March 4, 2014 at 3:58 PM

Kax, don’t be disparaging chickens.

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