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Sprint Settles Allegations Of Overcharging Federal Government For Wiretapping

April 10, 2015 - Written By Ed Modlin

Today, Sprint has agreed to pay $15.5 million to settle allegations that the service provider defrauded federal law enforcement agencies to conduct wiretapping operations between 2007 and 2010 by overcharging for compensation. At the time period in question, Sprint was known as Sprint Nextel Corporation. The case was filed in March 2014 in Federal District Court located in San Francisco, in the complaint the Federal government alleged that the company overcharged law enforcement for such operations as wiretapping, court ordered pin registers, and device trapping.

The joint investigation that was run by the United States Attorney’s office and the Office of Inspector General determined that Sprint had improperly overcharged by $21 million, to make upgrades to it’s systems. Sprint, along with the other wireless carriers are authorized to charge law enforcement agencies as written in federal statutes. However, the law says that the wireless networks can charge reasonable compensation for use of services and facilities in requested wiretapping, pen registers, or trap device, allegations were that the compensation was unreasonable and excessive.

The Communications Assistance in Law Enforcement Act (C.A.L.E.A) that was passed by Congress way back in 1994, required all US telecommunications providers to update its services, facilities or equipment to be available, and capable of assistance to the Federal government for activities pursuant to a court order. The actions named in the law are, the interception and delivery of certain communications, and to provide identifying information about certain phone calls that were made specifically to any court order. The additional statute forbidding carriers from charging government agencies for costs incurred during the upgrading of their systems, as ordered by the 1994 law (C.A.L.E.A), was enacted into law in 2006. Sprint, though included the costs of upgrading its systems in their bills for compensation anyway, according to the Federal investigation.

Although Sprint has agreed to pay the settlement, no admission of liability or any wrongdoing has, or will be made. The federal government had requested that Sprint pay three times the amount that they overcharged. The settlement was handled by the OIG from the Justice Department and the United States Attorney’s office. The announcement of the settlement was given by United States Attorney Melinda Haag and the U.S. Department of Justice Office of Inspector General (“OIG”), Special Agent in Charge M. Elise Chawaga.