AT&T Drops Lawsuit Over Fraudulent $1 Million Phone Bill

IPSWICH, Mass. (CBS/AP) — AT&T Inc. has dropped its lawsuit against a Massachusetts businessman over a million-dollar phone bill he says resulted from a hacker's fraud.

But Michael Smith of Ipswich, owner of Todd Tool & Abrasive Systems, said Tuesday he's not dropping a counterclaim for the costs to defend himself in the legal battle his lawyers say was unfair.

The telecommunications company said in a statement Tuesday it has dismissed all claims, but is "sympathetic to Mr. Smith's situation and remain open to resolving his concerns."

Smith says someone hacked into his small manufacturing company's phone system in 2009 and made nearly $900,000 in calls to Somalia. AT&T sued Smith for $1.15 million for the calls plus interest.

His lawyers say the company failed to notify him about the suspicious calls before billing him.

Smith says he still plans to sue AT&T to recover the $30,000 in legal expenses he has spent defending himself against the lawsuit.

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