by Ben Vernia | March 22nd, 2012
On March 22, the Department of Justice announced that it was intervening in a qui tam relator’s suit against AT&T over the company’s federally-finances IP Relay program:
The United States has filed a complaint against AT&T Corporation under the False Claims Act for conduct related to its provision of Internet Protocol (IP) Relay services, the Justice Department announced today. AT&T is a global conglomerate that provides a wide variety of telecommunications services, including Telecommunications Relay Services (TRS) for the deaf and hard-of-hearing.
IP Relay is a text-based communications service designed to allow hearing-impaired individuals to place telephone calls to hearing persons by typing messages over the Internet that are relayed by communications assistants (CAs) employed by an IP Relay provider. IP Relay is funded by fees assessed by telecommunications providers to telephone customers, and is provided at no cost to IP Relay users. The FCC, through the TRS Fund, reimburses IP Relay providers at a rate of approximately $1.30 per minute. In an effort to reduce the abuse of IP Relay by foreign scammers using the system to defraud American merchants with stolen credit cards and by other means, the FCC in 2009 required providers to verify the accuracy of each registered user’s name and mailing address.
The United States alleges that AT&T violated the False Claims Act by facilitating and seeking federal payment for IP Relay calls by international callers who were ineligible for the service and sought to use it for fraudulent purposes. The complaint alleges that, out of fears that fraudulent call volume would drop after the registration deadline, AT&T knowingly adopted a non-compliant registration system that did not verify whether the user was located within the United States. The complaint further contends that AT&T continued to employ this system even with the knowledge that it facilitated use of IP Relay by fraudulent foreign callers, which accounted for up to 95 percent of AT&T’s call volume. The government’s complaint alleges that AT&T improperly billed the TRS Fund for reimbursement of these calls and received millions of dollars in federal payments as a result.