Lawsuit: Sprint charged US government $21 million too much for spying expenses

The US government filed suit against Sprint, alleging that the company overcharged government agencies when submitting expense reimbursement requests for wiretap operations that spied on Sprint customers.

Sprint "knowingly submitted false claims to federal law enforcement agencies, such as the Federal Bureau of Investigation (FBI), Drug Enforcement Agency (DEA), US 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," US attorneys wrote in a suit filed in US District Court in Northern California. Sprint denies the allegations, which the US says cost the government $21 million. The lawsuit says that carriers are "prohibited from using their intercept charges to recover the costs of modifying equipment, facilities or services that were incurred to comply with CALEA [Communications Assistance in Law Enforcement Act]." Despite that rule, Sprint's reimbursement claims "included the costs of financing Sprint’s investment in CALEA equipment, including the cost of debt, cost of equity, and associated taxes. ... By including these unallowable costs in its intercept charges, Sprint inflated its charges by approximately 58 percent. As a result of Defendants’ false claims, the United States paid over $21 million in unallowable costs from January 1, 2007 to July 31, 2010."