AT&T Missouri Pays $1.4 Million To Settle False Claims Act Lawsuit Related To The FCC’s E-Rate Program

On October 13, 2009, the U.S. Department of Justice (DOJ) announced that AT&T Missouri has agreed to pay $1.4 million to settle a civil lawsuit alleging that the company violated the False Claims Act by submitting false information and engaging in anticompetitive practices in connection with the Federal Communication Commission’s E-Rate Program.  The E-Rate program provides funds for schools and libraries to assist them in connecting to and using the Internet and is resourced through fees collected from telephone users.  The non-competitive practices alleged by the DOJ included that AT&T Missouri colluded with Kansas City, Missouri school district officials to obtain and extend contracts under the E-Rate program and that the company provided meals and other inducements to these officials.  AT&T Missouri’s alleged misconduct came to light through a False Claims Act lawsuit filed in Missouri federal court by American Fiber Systems Inc., which submitted an unsuccessful bid to the school district for E-Rate contracts that were ultimately awarded to AT&T Missouri.  American Fiber acted as a qui tam relator, and received $195,000 as its share for blowing the whistle on this fraud.  For more information, see the DOJ press release regarding the settlement.

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