DOJ, FCC Target Deaf Translation Service in National Fraud Case

[Miss-Delectable]

DOJ, FCC Target Deaf Translation Service in National Fraud Case - The BLT: The Blog of Legal Times

Twenty-six employees of seven companies that provide translation services to the deaf and hearing impaired have been charged in a nationwide scheme to defraud the government of millions of dollars, the Justice Department announced today.

Indictments against owners and employees of the companies, including businesses in Maryland, Texas, California and New Jersey, were unsealed today. Prosecutors say the defendants were part of a scheme in which fraudulent video relay service (VRS) bills were submitted to the Federal Communications Commission for reimbursement.

VRS providers help deaf and hearing impaired individuals to communicate with others through the use of Web cameras and interpreters. The service, which is free for the user, is funded by fees assessed on telephone customers. In 2008, the FCC paid $540 million to VRS providers. An hour-long call is billed at nearly $400. FCC officials said billing irregularities prompted the investigation.

“That people would prey upon the program for their own greed is just absolutely inexcusable,” Assistant Attorney General Lanny Breuer said today at a news conference.

Authorities said the investigation is ongoing. But an FBI supervisor declined to say whether any other companies will be charged. “As this investigation moves forward, we plan to leave no stone unturned, and we will investigate the propriety of all other funds paid,” said Joseph Persichini Jr., assistant director of the FBI’s Washington field office.

FCC chief of staff Edward Lazarus said the FCC is implementing stricter oversight of the VRS program. There will be enhanced auditing and stepped-up scrutiny to identify and act on irregularities.

Prosecutors Hank Walther and Brigham Cannon from the Justice Department’s Fraud Section are handling the case. Charges were filed in the U.S. District Court for the District of New Jersey.

 

[Miss-Delectable]

Feds indict 26 in alleged scheme to defraud FCC program for the deaf

Feds indict 26 in alleged scheme to defraud FCC program for the deaf - CNN.com

Federal authorities on Thursday indicted 26 suspects in nine states in a wide-ranging scheme to defraud a program intended to help the deaf.

Officials said they arrested conspirators in New York, New Jersey, Florida, Texas, Pennsylvania, Arizona, Nevada, Oregon and Maryland.

"The individuals charged in connection with today's operation are alleged to have stolen tens of millions of dollars from an important government program that is intended to help deaf and hard-of-hearing Americans communicate with hearing persons," said Lanny Breuer, assistant attorney general for the Justice Department's Criminal Division.

Breuer told reporters the defendants allegedly generated fraudulent call minutes by making it appear that deaf Americans were engaging in legitimate calls with hearing persons. "In reality, the defendants were simply attempting to steal money from an FCC program that is funded by every single American who pays their telephone bills," he said.

The Federal Communications Commission began the investigation and called in the FBI and Postal Inspection Service to help.

Joseph Persichini Jr. assistant director of the FBI's Washington field office, called it a "unique" investigation that required 20 sign-language interpreters working with federal agents.

"Unfortunately, this remarkable service designed to help those in need also provided a growth opportunity for criminal activity that we believe has cost American consumers tens of millions of dollars," he said.

An FCC official said the total billing last year for calls both legitimate and fraudulent was $55 million. Some unknown portion of that -- believed to be "tens of millions" -- will prove to be fraudulent, according to officials who briefed reporters.

Officials said the 26 indicted individuals falsely billed the government at a rate of $390 per hour for using what is known as a Video Relay Service system. The seven contractors represent about 15 percent of the business for the system.

The indictments say owners and employees of seven companies were engaged in the scheme. The firms are located in Rockville, Maryland; Las Vegas, Nevada; Phoenix, Arizona; Austin, Texas; Miami Lakes, Florida; and Huntington Beach, California; and one firm operated in both New York and New Jersey.

In addition to seeking forfeiture from those indicted for the allegedly phony billing, Breuer vowed prosecutors will seek unspecified jail time.

 

[Miss-Delectable]

US charges firms defrauded deaf phone fund

The Associated Press: US charges firms defrauded deaf phone fund

Federal prosecutors on Thursday announced criminal charges against more than two dozen people accused of stealing tens of millions of dollars from a telephone service for the deaf.

Authorities said owners and employees at seven companies schemed to create bogus calls to a video service that allows the deaf to converse over phone lines to hearing people. Together, the companies represent about 15 percent of the market for such services, according to Justice Department officials.

Arrests have been made in Arizona, Florida, Maryland, Nevada, New Jersey, New York, Oregon, Pennsylvania, and Texas.

The service is paid for by funds raised through charges on telephone bills, and the fund is overseen by the Federal Communications Commission. It allows deaf Americans to connect to a video service with a sign language translator, who can then relay information between a deaf person and a hearing person.

"With growth in technology came a crime of opportunity," said Joseph Persichini, head of the FBI's Washington field office.

The fund pays about $6 a minute to companies that provide the service, and the indictments charge the suspect firms struck deals with call centers around the country to make long calls to the service for about $2 a minute.

While the investigation continues, the FCC has stopped payment for about 2 million minutes, worth more than $12 million in charges.

The FCC also plans to put in new safeguards to prevent such rampant abuse in the future, officials said.

Persichini did not rule out more charges, and urged anyone with information about such fraud to come forward.

"I suggest they call us before we call them," Persichini said.