A pedestrian walks by a Sprint store on April 15, 2013 in San Francisco. Dish Network Corp has offered to purchase Sprint Nextel Corp for $25.5 billion in cash and stock. (Justin Sullivan/Getty Images) A pedestrian walks by a Sprint store on April 15, 2013 in San Francisco. Dish Network Corp has offered to purchase Sprint Nextel Corp for $25.5 billion in cash and stock. (Justin Sullivan/Getty Images)

SAN FRANCISCO (CBS SF) – The office of U.S. Attorney Melinda Haag announced Thursday that Sprint Communications, Inc., has agreed to pay $15.5 million to settle allegations that it overcharged law enforcement agencies for carrying out court-ordered wiretaps and other surveillance activities.

Lawyers from Haag’s office sued Sprint in March, alleging that from 2007 to 2010 the telecommunications giant overcharged law enforcement agencies to the tune of $21 million. They were seeking triple-damage compensation and additional civil penalties under the U.S. False Claims Act.

Telecommunications companies are permitted under federal law to bill agencies for “reasonable” expenses incurred in accomplishing a court ordered wiretap.

Under the Communications Assistance in Law Enforcement Act (CALEA), however, telecom companies are required to cover the finance of upgrading their equipment and facilities to ensure that they’re “capable of enabling the government … to intercept and deliver communications and call-identifying information,” according to the U.S. Attorney.

Sprint allegedly defrauded federal law enforcement agencies by billing them for those expenses while recovering the otherwise legitimate costs of carrying out court-ordered wiretaps, which was prohibited by a 2006 ruling from the Federal Communications Commission, according to the U.S. Attorney.

Back in March, Sprint spokesman John Taylor denied the allegations and said Sprint would “defend this matter vigorously.”

“Under the law, the government is required to reimburse Sprint for its reasonable costs incurred when assisting law enforcement agencies with electronic surveillance. The invoices Sprint has submitted to the government fully comply with the law,” Taylor said.

Sprint did not admit to any wrongdoing or liability, according to a statement from Haag’s office, but this week’s agreement resolves the allegations of the complaint.

Sprint provides wireless service to 54 million customers in the United States, according to its financial statements. Sprint could not immediately be reached for comment.

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