KANSAS CITY, Kan. — A former independent contractor for Sprint Nextel Corp. pleaded guilty in what federal prosecutors say was a conspiracy to defraud the telecommunications company.
William Collum pleaded guilty Thursday to concealment of a felony.
He admitted he had learned that two now-former Sprint employees had passed along inside information to a software consulting firm, Four Corners Telecommunications Corp., known as Four C.
He then went along with Four C's decision to continue discussions with one of the employees, now-former Sprint long-distance manager Mary Elizabeth Drew, who was demanding additional money for her help.
Collum faces up to three years in prison and a $250,000 fine.
His guilty plea in federal court in Kansas City, Kan., came 15 months after Drew pleaded guilty to conspiracy to commit wire fraud. Drew is scheduled to be sentenced in January. She faces up to five years in prison and a $250,000 fine.
Drew, while working for Overland Park-based Sprint, was paid to assist Four C in contract negotiations.
Drew admitted that, in return for passing along inside information to Four C, the consulting firm paid $37,500 to her and another Sprint employee, patent lawyer Leslie Ann Genova.
Prosecutors said Four C was hired by Sprint in 2000 to work on Sprint's Integrated On-Demand Network, or ION, project, which sought to provide data, video and voice services through a single telephone line.
Drew offered to assist Four C, prosecutors said, and later brought in Genova.
The ION project was later written off by Sprint — now Sprint Nextel Corp. — at a cost of $2 million.
The fraud conspiracy resulted in amended contracts that benefited the consulting company, prosecutors said.
Sprint paid Four C $941,512 for testing Four C's software, prosecutors said, and the scheme added almost $1.5 million to Sprint's project costs through higher support and maintenance rates.
According to Collum's plea agreement, in early 2001, Four C founder Daniel Coffey III and two Four C employees sought to negotiate changes to the contract worth $4 million to $6 million.
In March 2002, Collum, who had managed hourly contractors Four C had employed on Sprint projects, took over the role of negotiating additional changes to the Sprint contract.
Shortly afterward, Drew sought additional payments for her help.
Four C's principals, who informed Collum of the previous payments to Drew, instructed him not to make an outright refusal.
Collum continued discussions with her, according to his plea agreement, but Four C did not pay her any more money.