AT&T Files Federal Civil-Racketeering Lawsuit Against MCI/Worldcom

AT&T filed a lawsuit in federal district court against MCI/WorldCom and ONVOY seeking damages for, among other things, violations of the civil provisions of the federal Racketeering Influenced and Corrupt Organization (RICO) Act and other laws. AT&T accuses MCI/WorldCom and ONVOY of orchestrating a scheme called the "Canadian Gateway Project," in which they worked with other telecommunications companies to reroute MCI customers' domestic phone calls through Canada to deceive and defraud AT&T into paying hefty termination fees for terminating calls to high-cost independent telephone companies in the U.S. AT&T said MCI/WorldCom should have properly kept the telephone traffic on its own network and been responsible for terminating access fees, if any, via intra-company transfers.


Separately, AT&T filed an objection to the MCI/WorldCom Official Committee of Unsecured Creditors' request for discovery in the bankruptcy court proceeding. AT&T called the Committee's request "to produce millions of pages of documents" an "effort to punish" AT&T for asserting its legitimate fraud claims.
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