More than 40 California government entities have joined a whistleblower lawsuit against wireless companies Verizon, AT&T, Sprint, and T-Mobile, alleging the companies collectively overcharged government customers more than $100 million.

The whistleblower lawsuit, filed in Sacramento County Superior Court under the California False Claims Act, alleges that the wireless carriers ignored cost-saving requirements included in master contracts under which their services were purchased by various government entities.

Whistleblower Allegations

Plaintiffs in the wireless lawsuit allege that the companies ignored two cost-saving requirements included in the master contracts under which California state and local government customers purchased wireless services.

Specifically, the master contracts required the carriers to determine and report to the government customers which rate plan selections would result in the lowest cost – referred to as “rate plan optimization” – and to provide wireless services at “the lowest available cost.”

Although the master contracts with the government required it, the wireless carriers did not prepare or provide rate plan optimization reports, the lawsuit alleges.  Further, as the carriers did not bill government customers utilizing the most cost effective rate plans, the defendants are also alleged to have failed to provide service at the “lowest available cost.”

The carriers’ failure to live up to their contractual promises, the whistleblower lawsuit alleges, resulted in overcharges to the government of more than $100 million.

The whistleblower action was brought by OnTheGo Wireless, a pioneer in the field of rate-plan optimization, which analyses usage patterns to determine the least expensive service or rate plan for each user.

The company alleges that the master contracts required the carriers to determine and report to the government customers which rate plan selections would result in the lowest cost through rate-plan optimization, and to charge them according to the lowest available cost.

What is the False Claims Act?

The False Claims Act is a federal law that imposes liability on individuals and companies who defraud the government.

This law contains a “qui tam” provision that allows individuals who have knowledge that a corporation or organization is defrauding the government to “blow the whistle” on the illegal activity.

The person who files a qui tam lawsuit is often referred to as the “relator” or “whistleblower.”

Qui tam lawsuits are a powerful way for whistleblowers to help the government stop many kinds of fraud including:

• Medicare/Medicaid Fraud
• Pharmaceutical Company Fraud
• Department of Defense Fraud
• Government Contractor Fraud

Qui tam lawsuits are a type of civil lawsuit whistleblowers may bring under the False Claims Act, a law that rewards whistleblowers if their lawsuit recovers funds for the government. The False Claims Act also provides job protection to whistleblowers because of the professional and personal risks they take to expose and stop fraud against the government.

The Wireless Whistleblower Lawsuit is State of California et al. ex rel. OntheGo Wireless, LLC v. Cellco Partnership et al., Case No. 34-2012-00127517  in the Superior Court of California, Sacramento County.