SPRINT CORPORATION TO PAY UNITED STATES $5.5 MILLION
TO SETTLE ALLEGATIONS OF CONTRACTING FRAUD

WASHINGTON, D.C.- Sprint Corporation has agreed to pay the United States $5,565,250 to settle claims that it defrauded the General Services Administration from 2000 to 2002, the Justice Department announced today.

Today’s civil settlement resolves allegations that the telecommunications company knowingly passed through to the government costs and fees for Presubscribed Interexchange Carrier Charges in excess of the amounts Sprint was allowed to assess under the Federal Technology Service (FTS) 2001 contract. Such charges are a fee that long distance companies pay to local telephone companies to recover part of the costs of providing facilities that link each telephone customer to the telephone network.

“This settlement illustrates the Justice Department’s determination to recover funds that are owed to the United States,” said Robert D. McCallum, Jr., Assistant Attorney General for the Civil Division. "We will continue to vigorously enforce the False Claims Act for the protection of the taxpayers and the United States government."

The allegations arose from a lawsuit filed by telecommunications specialist John Russo under the whistleblower provisions of the False Claims Act, a federal law that allows private individuals to sue on behalf of the United States. The lawsuit was unsealed today in Los Angeles, California.

The civil investigation and settlement were jointly handled by the Office of the United States Attorney for the Central District of California and the Civil Division of the Department of Justice, with assistance from the United States General Services Administration.

The action is entitled United States ex rel. John Russo v. Sprint Corporation and Sprint FON, Civil No. 02-03481 GHK (RNBx)(C.D.Cal.).

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