June 27, 2006 AT&T Communications-East Inc.

AT&T Communications-East Inc., a subsidiary of AT&T Corp, has agreed to pay $2.9 Million to settle a qui tam action filed by a private relator, J.A. Russo Associates Inc.

The allegations of the case were that AT&T defrauded the United States by passing through to government customers, certain costs and fees known as Presubscribed Interchange Carrier Charges.  The charges are a fee that long distance companies pay to local telephone companies to recover part of the costs of providing facilities that link each telephone customer to the telephone network.  Under the terms of a contract which the government had entered with AT&T, AT&T was prohibited from passing those charges on to the governments customers.

The relator is expected to receive an award of up to $750,000 for having filed the
qui tam case

See U.S. Dept of Justice Press Release 6/27/06

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