MCI Faces Federal Fraud Inquiry on Fees for Long-Distance Calls
WASHINGTON, July 26 — 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.
The investigation is based on internal documents and information from former MCI executives and three other telephone companies: AT&T, SBC Communications and Verizon. They have provided significant technical evidence that shows, they say, that MCI is continuing to avoid...
