Verizon agrees to $93M settlement for false billing to GSA

Verizon Communications agreed to a $93.5 million settlement with the federal government after a Justice Department investigation into allegations the phone and Internet giant overcharged an agency on communications contracts.

Justice said Tuesday that it found Verizon’s subsidiary, MCI Communications, over-billed the General Services Administration in 2001 for federal, state and local taxes and surcharges. Specifically, its investigation done with the GSA’s Office of the Inspector General found that Verizon and MCI submitted false claims for the reimbursements of property taxes, common carrier recovery charges and other surcharges.

“Corporations that contract to provide services to federal, state and local governments must play by the rules,” said Tony West, assistant attorney general for the civil division of the Justice Department. “We will protect taxpayers against those who seek to charge more than they deserve.”

The announcement comes amid increased scrutiny of Verizon’s billing practices and services. Last October, Verizon agreed to pay $77 million in reimbursements and fines after a probe by the Federal Communications Commission into false mobile phone data charges. Earlier this week, the Maryland Public Service Commission said Verizon might have violated state law when it did not notify emergency call centers in Montgomery and Prince George’s counties that it experienced network failures several times over the past year. Those failures prevented thousands of 911 calls from going through during winter storms.

Cecilia Kang is a staff writer covering the business of media and entertainment.

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