WorldCom was brought down by an $11 billion US accounting scandal that caused it to file for bankruptcy protection last year. Only last month a deal was approved between the company and the Securities and Exchange Commission (SEC) in terms of which the troubled telecoms giant is to pay $750 million to investors who lost money as a result of the fraud. The deal opened the door to WorldCom's emergence from bankruptcy.
But the company's troubles are far from over. On Tuesday, AT&T lodged a suit accusing WorldCom of diverting US telephone calls to Canada in order to avoid having to pay connection fees to rival networks, while hiding the origin of the call.
The legitimate version of this practice is known as 'least cost routing', and means that the company uses the most efficient network available to route calls. So, for example, if some networks are less busy at certain times, then these will be used in preference to busy ones. It is when the origin of the rerouted call is hidden that the practice can be unlawful. And the allegation is that when WorldCom transmitted calls through intermediaries it stripped software codes to disguise the origin of the calls.
The lawsuit accuses WorldCom and another telecoms company called Onvoy of orchestrating a scheme called the "Canadian Gateway Project". This scheme allegedly involved working with other telecommunications companies to reroute WorldCom customers' domestic phone calls through Canada. This practice caused AT&T to pay hefty termination fees for terminating calls to high-cost independent telephone companies in the US, such as Verizon.
In addition, the suit alleges that WorldCom carried out fraudulent operations that made AT&T pay access fees to WorldCom itself.
For good measure, the lawsuit also alleges fraud, civil conspiracy, unjust enrichment, racketeering conspiracy and substantive racketeering through a pattern of multiple acts of mail fraud and wire fraud.
AT&T maintains that the scheme is ongoing and that WorldCom and Onvoy continue to engage in the misconduct. As a result, the lawsuit also claims damages for any fraudulent activity carried out after the lodging of the action.
AT&T first raised the question of fraudulent rerouting of calls in early August. At the time, WorldCom denied the charges, and it did so again on Tuesday. In a statement, WorldCom spokesman Brad Burns said: "This is nothing more than AT&T trying to make headlines from something that is at best a commercial dispute that started weeks ago".
Onvoy chief executive Janice Aune told the BBC, "Onvoy anticipated that in the weeks prior to the September bankruptcy hearings that AT&T and the other players would make a move such as this."