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MCI Accused of Long-Distance Call Accounting Fraud
drcobb writes "According to the New York Times, MCI is under investigation again. This time for spoofing SS7 point codes to avoid paying access tariffs.
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."
I think it goes without saying that MCI has a terrible history of high level executive decisions to commit fraud, undermine various regulatory agencies and now stealing service from various other carriers. What's of more concern, however, is how many corporations engage in this sort of activity and evade detection.
:-)
On a lighter note, perhaps MCI will change their name again after this is all behind them?
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.
Accounting? Looks like just lying to me.
Justice Department officials have evidence that MCI may, in effect, have "laundered" calls through small telephone companies, and even redirected domestic calls through Canada, to avoid paying access fees or shift them to rival long-distance carriers, according to people involved in the investigation.
Remember, though, that MCI was Worldcom. (Worldcom changed their name to MCI).
"We were told that Project Invader was an exploitation of a tariff loophole, a trick. We kept the project a secret. The traffic was ramped up slowly to avoid detection."
Seriously, 'Project Invader'? Who comes up with these project names? Are you just asking to be caught?
How do the honest companies ever stay in business, much less turn a profit?
Let's hope they don't pull an Enron and start all of the sudden shredding all their old logs.
At first glance, it seems that way. But upon examining the scheme a bit closer, I noticed the caller-ID flaw in the scheme. By exploiting contracts with other local companies to avoid paying their competitors, it looked like local traffic in many cases. The modified ones that made competitors pay, though, were likely slowly increased as time went on. It's definitely a case of severe forgery or fraud of some sort, but it's hard to detect that on a packet. How is one to tell whether a packet was really sent from 214.123.44.53 and not from 23.45.54.138 when on the internet if the packet header was modified? the records of this alone would take up incredible amounts of space per day, not to mention the resources matching up each call daily would take. That'd be like checking the route of every IP packet sent through a point on the backbone each day. Sheer volume gave them enough obfuscation for a long time.
In SOVIET RUSSIA... erm...NSA AMERICA, the Internet logs onto YOU!
If they were not billing customers per minute, the cost would be negligible. Internet traffic costs less than a dollar per GB, to any destination in the world. 1GB is roughly 18 hours at excellent quality (ISDN 2x64kBit/s) or about 5 days at cellphone quality (2x9.6kBit/s) -- as long distance as you like. If the subscription fee pays for the last mile (which is the only difference compared to internet traffic), then the long distance price should be well below 0.001 $/minute. The only reason for billing per minute is per minute billing.
and upper management jailed for 20+ year sentences after corporate misgivings are proven.
Let's face it. We, the working people, have been screwed for years under the "we're doing this for the shareholder" mantra. We've been asked to take pay cuts, work longer shifts, work weekends unpaid. Meanwhile, this is done not for the shareholders, which see no real increase, but for the top executives who use that extra productivity to support their continued bonus plan.
This has always been about bonuses for execs. This story proves that even more.
The only difference between organized crime and corporate America is where they get their suits tailored.
Let's face it, fraud is a hard job. It's much easier and more profitable to be honest. It's more expensive to hire the lawyers, accountants and MBAs needed for fraud rather than the engineers, programmers and technicians a company needs to do an honest job.
Those tariffs are the largest single source of MCI's costs for carrying calls and data transmissions.
Does anyone else find this really irritating? That a tax is the single largest cost they face? It seems to me that the government is the real problem here: IMO, good for MCI for trying to keep more of its hard-earned money away from the gaping maw of Uncle Sam.
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Just how many major crimes do you have to commit before it ceases to be a civil matter in this country ? Just how many people do you have to harm before its considered criminal or is that just reserved for people that download songs ?
Hmmm, no indication of who was President when this started and who is President when it's found and cleaned up?
If any company ever deserved the death penalty, it's this gang of thieves. Do NOT let WorldCom/MCI/UUNet emerge from bankruptcy. Liquidate the company instead.
There is one rule here: telecom == fraud.
The monolithic monopoly of the Bell System was just as bad. You are just too young to remember. It was worse, in fact, because their was no other big fraudulant corporate facist to scream and thus uncover it. It was much more hidden, and the effects were more prevasive. Now at least you can pick one warlord over another.
The old situation was akin to being a peasant in medieval China. The new situation is akin to being a peasant on the borderlands of Scotland. It still sucks, but now there is hope.