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Feds Say Sprint Overbilled for Wiretaps

/ Source: Associated Press

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Federal officials have filed a lawsuit alleging that Sprint Communications Inc. overbilled government agencies $21 million for wiretap services.
The lawsuit filed Monday in federal court in San Francisco alleges that the Sprint Corp. subsidiary collected unallowable expenses from the FBI and other government agencies while carrying out court-ordered wiretaps and other electronic intercepts of its customers.
Communication companies are allowed to recoup the cost of installing and maintaining wiretaps when courts order them to intercept customers' communications.
The Department of Justice claims in its lawsuit that Sprint also sought and received reimbursement for modifying its equipment and facilities to more efficiently intercept electronics communications. In 2006, the Federal Communications Commission prohibited carriers from passing on those expenses to the government.
In the case, San Francisco U.S. Attorney Melinda Haag alleges that Sprint "knowingly submitted false claims" to the FBI, Drug Enforcement Administration, Marshals Service and other law enforcement agencies from Jan. 1, 2007, to July 31, 2010, inflating costs by about 58 percent.
The Justice Department is seeking $63 million, a tripling of its damages it said it's entitled to if a jury finds Sprint filed false claims.
A Sprint spokesman says the company denies the allegations.
"Under the law, the government is required to reimburse Sprint for its reasonable costs incurred when assisting law enforcement agencies with electronic surveillance," Sprint spokesman John Taylor said. "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."

-The Associated Press and Reuters contributed to this report.

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