Sprint overcharged US gov't $21M in wiretapping expenses, lawsuit claims

Sprint overcharged US gov't $21M in wiretapping expenses, lawsuit claims

Summary: U.S. carrier Sprint is in hot water with the feds after allegedly overcharging the government for wiretapping expenses.

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TOPICS: Government US
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(Image: CNET)

Sprint is winding up in the courtroom after federal agencies claimed that the carrier inflated prices of wiretapping services and overcharged the government by millions of dollars.

As reported by Wired, a lawsuit (.PDF) brought against the Kansas-based company alleges that Sprint inflated charges by almost 60 percent between 1 January 2007 and 31 July 2010, which resulted in overcharges of $21 million.

The lawsuit, using the basis of the False Claims Act, seeks to recoup these losses and damages. The Obama Administration claims that Sprint submitted "false claims" to agencies including the FBI, U.S. Marshals Service (USMS), Bureau of Alcohol, Tobacco and Firearms (ATF), and Immigration and Customs Enforcement (ICE), by including "unallowable" costs in their charges for carrying out court-ordered wiretaps.

The False Claims act can be brought forward against individuals and parties that knowingly present false or fraudulent claims for payment and approval of services. Those found guilty can be liable for a civic penalty of between $5,000 and $10,000 per claim, plus "three times the amount of damages which the Government sustains because of the act of that person."

The U.S. carrier, like others in the country, must comply with the Communications Assistance in Law Enforcement Act of 1994, in which telecommunications firms have to provide wiretapping services when ordered by a court. However, carriers are allowed to charge agencies "reasonable expenses" for these services -- but this does not include modifying “equipment, facilities or services” in order to comply with wiretap orders.

San Francisco U.S. Attorney Melinda Haag said that Sprint's overcharging, which apparently went undetected as the carrier did not provide a breakdown in agency invoices, "caused a significant loss to the government’s limited resources."

Sprint spokesman John Taylor told the publication:

"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. We have fully cooperated with this investigation and intend to defend this matter vigorously."

According to the U.S. courts and their 2012 wiretap report, the number of federal and state wiretaps increased 24 percent from 2011, comprising of 1,354 authorized by federal judges and 2,041 by state judges. The number of wiretap requests approved by federal judges increased 71 percent in 2012, and the number approved by state judges rose 5 percent. Two requests were denied in 2012. Applications in California, New York, and Nevada accounted for 69 percent of all applications approved by state judges.

Topic: Government US

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12 comments
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  • Can they

    introduce the records of each instance as defense?

    THAT'LL be fun!
    ka5s@...
  • Considering....

    that the government broke the law when ordering most of the wiretaps anyway, I would think that Sprint could legally charge the government extra for the illegal requests, as it is not assisting law enforcement at that point.
    cmwade1977
    • yeah this is great

      Love to see the crooks get swindled. Oh wait, I am a taxpayer and so I already got robbed and won't see a dime as part of the settlement.

      crap.
      otaddy
  • We'll all pay for this...

    All the US tax-payers will pay for this - TWICE! We've already paid Sprint for the over-charges. Now, we'll pay more in taxes so the gov't can "recover" those lost dollars. If the gov't wins this case, you can bet that the tax-payers will never see a dime of the money from the suit.
    WozNotWoz
    • So what's your solution?

      NT
      John L. Ries
  • Hey...If you don't like my prices...

    then stop asking me to snoop.
    malcolm@...
  • Thieves

    I guess it's true, there is no honor amongst thieves.....
    Tinman57
  • "caused a significant loss to the government’s limited resources."

    Ha Ha Ha. Government's limited resources. They spend billions, hell maybe trillions building these super spying facilities to illegally spy on Americans and forcing these ISP's to do illegal wire tapping for them and then cry over a measley 21 million!
    Stop the Gov and it's spying and lying. Simple. lmao.
    Denny Fry
    • Illegal?

      Even though they're authorized by regular courts on the basis of probable cause? This isn't FISC or the NSA we're discussing.

      I do think the feds should be required to cover *all* expenses related to warranted wiretaps, but it appears that Congress decided otherwise.
      John L. Ries
      • Jamie Yoak regarding Sprint

        I couldn't agree with you more.
        mercy1234
  • Sprint Has Audacity In Frauding Big Brother

    Sprint has to pay back 3 times what they fraudulently obtained. They money to pay back the government is comming from the customer.
    mercy1234
  • Sprint Has Audacity In Frauding Big Brother

    Now Sprint had to psy it back with the customer's dime.
    mercy1234