Sprint Sued by U.S. Over Wiretap Overpayment Claims

Sprint Corp. (S), the third-largest U.S. wireless carrier, was sued by the government over claims it overbilled the FBI and other law enforcement agencies by $21 million for the cost of assisting in court-ordered wiretaps.

Sprint overbilled agencies including the FBI; the Drug Enforcement Administration; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Attorney Melinda Haag said in an e-mail. The company inflated its charges by 58 percent from 2007 to 2010, the U.S. said in a complaint filed today in federal court in San Francisco

The government asked for triple damages and unspecified civil fines.

“‘Under the law, the government is required to reimburse Sprint for its reasonable costs incurred when assisting law enforcement agencies with electronic surveillance,’’ John Taylor, a company spokesman, said in an e-mail. ‘‘The invoices Sprint has submitted to the government fully comply with the law.’’

The company has ‘‘fully cooperated with this investigation,’’ Taylor said.

Sprint and other telecommunications carriers can bill law enforcement agencies for reasonable expenses when they provide facilities or assistance in intercepting communications under court orders, Haag said.

Carriers were required in 1996 to upgrade their equipment to ensure they could assist federal agencies in intercepting communications.

They are barred from passing on those costs to law enforcement agencies. Sprint Communications, formerly Sprint Nextel Corp., included those disallowed expenses in bills to federal agencies, Haag said.

The case is U.S. v Sprint Communications Inc., 14-962, U.S. District Court (San Francisco).

To contact the reporter on this story: Karen Gullo in federal court in San Francisco at kgullo@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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