The U.S. Department of Justice is suing AT&T for fraud over government payments for services provided by the company’s Internet Protocol (IP) Relay Service. The government claims that AT&T improperly demanded reimbursement from the Federal Communications Commission (FCC) for IP Relay Service provided to international callers who were not eligible for reimbursement. The government alleged that payments to AT&T from the FCC for these illicit IP Relay Service users totaled millions of dollars and that some of the users employed the service in fraudulent schemes, including thousands of calls originating from Nigeria – a notorious epicenter of Internet-based scams – that sought to defraud U.S. businesses.

The DOJ charges stem from a lawsuit brought by Constance Lyttle, a former communications assistant in one of AT&T's Internet Protocol Relay call centers who sued AT&T on behalf of the federal government under provisions of the False Claims Act.

“Federal funding for Telecommunications Relay Services is intended to help the hearing- and speech-impaired in the United States,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice, said in a department statement. “We will pursue those who seek to gain by knowingly allowing others to abuse this program.”

AT&T provides Telecommunications Relay Services (TRS) for the deaf and hard-of-hearing over its IP Relay Service. The service allows deaf and hearing-impaired individuals to communicate with others over the telephone by typing messages. The messages are transmitted over the Internet to communications assistants (CAs) used by an IP Relay provider. The entire system is financed through service fees paid by telephone customers in the monthly bills. IP Relay users pay nothing. Telecommunications providers who offer IP Relay are reimbursed for the cost of the service by the FCC at $1.30 per minute. After realizing that the IP Relay Service had become a tool for scammers, the FCC issued a requirement for telecommunications providers to confirm each registered user’s name and mailing address in 2009. 

The government argues that AT&T deliberately deployed a registration system unable confirm if IP Relay Service users were, in fact, based in the United States because it feared a steep drop off in FCC reimbursements.  According to the government, AT&T knew that as much as 95 percent of its IP Relay Service call volume originated from outside the U.S., but continued to bill the TRS Fund for reimbursement for these calls.

AT&T disputes the government’s charges. "AT&T has followed the FCC's rules for providing IP Relay services for disabled customers and for seeking reimbursement for those services," AT&T spokesman Marty Richter said in a statement. "As the FCC is aware, it is always possible for an individual to misuse IP Relay services, just as someone can misuse the postal system or an email account, but FCC rules require that we complete all calls by customers who identify themselves as disabled."

 “Taxpayers must not bear the cost of abuses of the Telecommunications Relay system,” said David J. Hickton, United States Attorney for the Western District of Pennsylvania, in the DOJ statement. “Those who misuse funds intended to benefit the hearing- and speech-impaired must be held accountable.”