A story in Friday's Financial Section incorrectly reported that ITT Corp. had admitted fraudulently overcharging the General Services Administration for electronic mail services and had agreed to repay $1.1 million. Terms of the settlement with the Justice Department by ITT Dialcom of Silver Spring provide that "nothing herein is intended as an admission by the company of any violation of law . . . . "
ITT Corp. has agreed to pay the federal government $1.1 million in reimbursement, interest and other costs to compensate for overcharges -- some of them deliberate -- billed to the General Services Administration by a Silver Spring-based ITT subsidiary.
ITT officials have conceded that the division, ITT/Dialcom Inc., programmed its computers to fraudulently overbill the government and, in other cases, charged the government more than Dialcom would have charged commercial customers for the services. Dialcom provides computerized electronic mail services to government agencies.
In all, Dialcom overcharged the government $680,000 between 1979 and 1983, according to the Justice Department. ITT, which acquired Dialcom in December 1982, has said the division overcharged commercial customers by a like amount, which ITT has since returned to the affected customers.
The settlement, which was announced by the Justice Department, ends the department's civil claims against ITT under the False Claims Act and other laws. The department reserved the right to pursue civil or criminal cases against individuals involved in the overcharges.
The agreement follows audits and investigations by the GSA and the Justice Department, which began after ITT informed the GSA in 1983 that internal auditors had found that Dialcom had been overcharging the government.
ITT, in a statement issued late yesterday, said, "We're satisfied to have reached agreement on a matter that predated ITT's acquisition of Dialcom . . . . The GSA's audit confirmed the results of our own audit, and we will continue to cooperate fully, as we have in the past."
The Dialcom electronic-mail system is used by a large number of federal agencies, including the Agriculture Department, the Food and Drug Administration, the Federal Bureau of Investigation and the Secret Service. Using the system, government employes could exchange messages throughout the nation via an ITT/Dialcom computer. Dialcom would then bill the GSA for the amount of computer time used.