July 27, 2003

MCI IS ACCUSED OF DEFRAUDING OTHER PHONE COMPANIES to the tune of hundreds of millions of dollars:

Federal prosecutors have opened an investigation in the United States and Canada into accusations that MCI, the nation’s second-largest long-distance carrier, defrauded other telephone companies of at least hundreds of millions of dollars over nearly a decade, people involved in the inquiry said.

The central element of MCI’s scheme, people involved in the inquiry said, consisted of disguising long-distance calls as local calls to avoid paying special access tariffs to local carriers across the country. Those tariffs are the largest single source of MCI’s costs for carrying calls and data transmissions.

Interesting story. I suspect that putting the case in front of a jury will prove a challenge, though.