AT&T is one of the world’s leading telecommunications corporations, with customers and users on nearly every continent. Unfortunately, it is also in the crosshairs of the Department of Justice after allegations surfaced detailing its fraudulent dealings with the Federal Communications Commission. Under the False Claims Act, which is an Act dedicated to eliminating loss of taxpayer dollars to fraud and dishonesty, is it considered a violation for any company holding a government contract to knowingly pad invoices or bill the government for services it did not render. The FCA provides for a whistleblower provision allowing a private citizen with firsthand, original knowledge of the misconduct the opportunity to come forward and report the fraud through a private cause of action. Thereafter, the U.S. and state governments may choose to intervene and continue the investigation, which is common in larger, more expansive instances of fraud. Nonetheless, a private plaintiff may continue his cause of action with or without the government’s intervention – and may receive an award of up to 30 percent of any money recouped by the government.
Details of the FCA Case Against AT&T
The fraud case involving AT&T pertains to certain services offered to the hearing or speech impaired population of the United States. When a person is in need of assistance in communicating, a technology known as IP Relay services is implemented to effectuate a textual “phone call.” Basically, the caller, through his internet connection, can communicate with others by way of typing the conversation on the computer, much like an instant messaging conversation. IP Relay services are offered by third-party providers who are, in turn, compensated by the Telecommunications Relay Services Fund. The TRS Fund was set up to ensure those with disabilities are able to make emergency calls, as well as regular calls, without significant difficulty. IP Relay services provides are expected to routinely submit an invoice for their services, which is then reimbursed by the TRS Fund.
AT&T is a provider of IP Relay services and is entitled to per-minute reimbursement for every call it handles. According to allegations, AT&T was engaged in a scheme wherein it submitted invoices for reimbursement that were not eligible under current TRS Fund guidelines. Ranging from 2009 through 2011, nearly 80 percent of calls submitted for reimbursement were for calls that either originated in a foreign nation or were placed by individuals who were not hearing or speech impaired, both of which are violations of reimbursement eligibility requirements.
The alarming allegations further detail that AT&T knew a majority of its IP Relay reimbursements originated from Nigeria and involved calls to unsuspecting Americans for purposes of perpetuating a credit card fraud scheme. In essence, the scheme was fraud begetting fraud.
Evidence uncovered an extremely lax, unregulated scheme in registering users for the IP Relay services. Upon inspection, investigators revealed AT&T’s registration cards contained falsified or missing information, including entries like “nbdk” or “jhgfajhs” where a street address should have been. In general, the FCC requires users to enter their name, street address, email address, phone number, last four digits of their Social Security number and several questions to verify identity.
It Takes all Kinds
Fraud can arise anywhere. While true that the majority of claims under the FCA arise under health care or defense contracting misdeeds, it is not uncommon for technology fraud appear, particularly involving schemes that are presumably easily undetected. If you believe something is amiss involving conduct at your place of employment or elsewhere, you are encouraged to speak with a whistleblower attorney right away.