Justice Says FCC Video Service For Deaf Defrauded Out Of $60M

Service allows deaf to communicate with hearing people over video phones

The Justice Department said Thursday it has taken action against a scheme to defraud the FCC's video relay service for the deaf out of millions of dollars.

The service allows the deaf and hard of hearing to communicate with hearing people over video phones, or more frequently via computers with cameras in real time using American Sign Language and interpreters.

Making the announcement in a briefing with reporters at the Justice Department Thursday were Assistant Attorney General of the Criminal Division Lanny Breuer; Joseph Persichini, Jr., assistant director of the FBI's Washington Field Office; Deputy Chief Postal Inspector Zane Hill; and Ed Lazarus, Chief of Staff at the FCC.

Breuer said 26 individuals had been indicted in a wide-ranging scheme.

Consumers pay into the Telecommunications Relay Service (TRS) fund, some $540 million in 2008, for the service, with calls costing hundreds of dollars per hour to cover the cost of translators.

Twenty-six people have been charged for allegedly bilking the fund out of $60 million in bogus calls made in order to bill them at the several-hundred-dollar rate the FCC reimburses for VRS calls out of the TRS fund.

Lazarus said the event was both a tragedy and an opportunity. Tragedy for the fraud, but an opportunity to safeguard the program and improve service delivery. He said the FCC has increased scrutiny of records, resulting in withholding payment on some 2 million minutes worth of submitted calls. It will also put stricter controls on the program's administrator.

He also said the FCC would undertake a comprehensive review of the program.

Seven companies were involved, representing 15% of the total payout. The FCC launched the investigation, said Lazarus, after receiving anecdotal evidence of fraud.