U.S. sues Sprint for wiretap overcharges

San Francisco - Federal officials have filed a lawsuit alleging that Sprint Communications (S) overbilled government agencies $21 million for wiretap services.

The lawsuit filed Monday in federal court in San Francisco alleges that its Sprint Corp. subsidiary collected unallowable expenses from the FBI and other government agencies while carrying out court-ordered wiretaps and other electronic intercepts of its customers.

Communication companies are allowed to recoup the cost of installing and maintaining wiretaps when courts order them to intercept customers' communications.

The Department of Justice claims in its lawsuit that Sprint also sought and received reimbursement for modifying its equipment and facilities to more efficiently intercept electronics communications. In 2006, the Federal Communications Commission prohibited carriers from passing on those expenses to the government.

A Sprint spokesman says the company denies the allegations.