SAN FRANCISCO (CN) – The United States sued Sprint for $63 million and penalties, alleging the telecom giant inflated its bills by 58 percent in submitting false claims “for carrying out court orders authorizing wiretaps, pen registers, and trap devices.”
The United States sued Sprint Communications fka Sprint Nextel and Sprint PCS, in Federal Court.
The complaint states: “The United States bases its claims on defendants’ submission of false claims for reimbursement of expenses they incurred in providing facilities or assistance to federal law enforcement agencies in executing court orders authorizing the interception of a wire, oral, or electronic communication (commonly referred to as a ‘wiretap’), and orders authorizing the installation of a pen register or trap device. A pen register is a device that records or decodes dialing, routing, addressing or signaling information transmitted by a particular telephone line, but not the contents of a communication. 18 U.S.C. § 3127(3). A trap device is a device or process that captures the incoming impulses which identify the source of a communication, but not its contents. 18 U.S.C. § 3127(4).”
The 14-page lawsuit claims that “defendants Sprint Communications, Inc. and Sprint PCS (collectively referred to as ‘Sprint’) knowingly submitted false claims to federal law enforcement agencies, such as the Federal Bureau of Investigation (FBI), Drug Enforcement Agency (DEA), U.S. Marshals Service (USMS), Bureau of Alcohol, Tobacco and Firearms (ATF), Immigration and Customs Enforcement (ICE), and others, by including unallowable costs in their charges for carrying out court orders authorizing wiretaps, pen registers, and trap devices.”
Sprint, or any telecom, “is authorized by statute to bill law enforcement agencies for the reasonable expenses it incurs in providing facilities or assistance to accomplish a wiretap, pen register, or trap device (referred to herein as ‘intercept charges’),” the complaint states.
In fact, in 1994, Congress, in the Communications Assistance in Law Enforcement Act, or CALEA (Public Law No. 103-414, 108 Stat. 4279 (1994)), “required telecommunications carriers to ensure that their equipment, facilities, or services were capable of enabling the government, pursuant to a court order, to intercept and deliver communications and call-identifying information.”
The FCC ruled on May 12, 2006, that telecoms, or “carriers[,] were prohibited from using their intercept charges to recover the costs of modifying equipment, facilities or services that were incurred to comply with CALEA.”
Sprint knew this, having participated in the rulemaking proceeding, Uncle Sam says in the complaint, but, “Despite the FCC’s clear and unambiguous ruling, Sprint knowingly included in its intercept charges the costs of financing modifications to equipment, facilities, and services installed to comply with CALEA. Because Sprint’s invoices for intercept charges did not identify the particular expenses for which it sought reimbursement, federal law enforcement agencies were unable to detect that Sprint was requesting reimbursement of these unallowable costs.
“By including the unallowable costs of financing CALEA modifications in their intercept charges, Sprint inflated its charges by approximately 58 percent. As a result of Sprint’s false claims, the United States paid over $21 million in unallowable costs from January 1, 2007 to July 31, 2010.”
The United States seeks treble damages, penalties, and costs.
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