Nov 7 AT&T Inc will pay $3.5 million to
settle federal charges that it had overbilled a U.S. government
fund meant to help customers with hearing and speech
impairments, an activity that officials said enabled people in
Nigeria and other countries to pursue credit card fraud.
AT&T was not implicated in the frauds.
Thursday's settlement resolves allegations concerning the
Telecommunications Relay Services Fund, which is intended to
compensate carriers for the extra costs of placing calls on
behalf of people who have difficulty hearing and speaking.
The U.S. Department of Justice said that from December 2009
to December 2011, as many as 80 percent of calls for which AT&T
sought reimbursement were ineligible because the callers were
not impaired, or because the calls were placed outside the
Investigators said it was common knowledge among AT&T
communication assistants that many callers were from Nigeria and
other foreign countries, and that these callers used the system
to defraud U.S. merchants by ordering goods with stolen credit
cards and counterfeit checks.
AT&T, the largest U.S. phone company, in May had agreed to
pay $18.25 million to settle related charges by the Federal
The additional $3.5 million settles claims from a case under
the federal False Claims Act that Constance Lyttle, a
Pennsylvania whistleblower, first brought in 2010. Lyttle will
receive $525,000, or 15 percent, of the settlement amount.
"While we continue to deny the allegations, we concluded
that the most productive course was to resolve what was left of
the litigation," an AT&T spokesman said.
Dallas-based AT&T no longer offers the service that was the
subject of the lawsuit.
The company's shares were down 0.9 percent at $35.50 in
The case is U.S. ex rel. Lyttle v. AT&T Corp, U.S. District
Court, Western District of Pennsylvania, No. 10-01376.