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Sprint Settles Allegations of Contracting Fraud

Date Class
20th Jun 2003 Fraud Investigation
NEW YORK -- Sprint Corp. agreed to pay roughly $5.6 million to the U.S. government to settle allegations of contracting fraud from 2000 through 2002, the U.S. Department of Justice said in a press release Thursday.

The $5.56 million civil settlement resolves allegations that Sprint "knowingly passed through to the government" charges in excess of what it was allowed to assess under a 2001 contract, the Justice Department said. The charges involved are paid by long-distance companies such as Sprint to local telephone companies to recover the costs associated with linking customers to the network.

The allegations arose from a lawsuit filed by John Russo under the False Claims Act, which allows individuals to sue on behalf of the U.S.

The Office of the U.S. Attorney for the Central District of California and the Civil Division of the Department of Justice jointly handled the investigation. The U.S. General Services Administration also assisted.

Sprint, a telecommunications company in Overland Park, Kan., is tracked by two stocks: Sprint FON Group (FON) for its wireline business and Sprint PCS Group (PCS) for its wireless business.

A Sprint spokesman said that the settlement was a "fair and equitable" resolution to "a billing dispute."

He noted that Sprint admitted no wrongdoing.

"They had a dispute over how these charges should have been calculated and charged back to the government," said spokesman Steve Lunceford




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