AT&T Seeks to Dismiss U.S. Suit Over Con Men Using Deaf Service

AT&T Inc. (T) urged a judge to dismiss a lawsuit claiming it profited from government payments for a calling service for the deaf that the company knew was being used by Nigerian con men to steal from American merchants.

The U.S., which intervened in the whistle-blower lawsuit in federal court in Pittsburgh, claims AT&T allowed an Internet- based phone system to be overrun by criminals and then improperly billed the government to reimburse the calls in violation of the False Claims Act.

AT&T said the government’s case is an “improper and brazen attempt to use the False Claims Act to litigate a garden-variety regulatory claim,” according to the company’s filing yesterday.

Instead of arguing that AT&T submitted inflated reimbursement requests for a program that it didn’t carry, the government claims the company didn’t verify users’ information - - an argument that doesn’t support a False Claims Act case, AT&T said in yesterday’s filing.

The program in question, IP Relay, allows hearing-impaired people to type text messages that the operator reads to the recipients of their phone calls.

In its complaint, the U.S. said that as many as 95 percent of the calls in AT&T’s hearing-impaired program were made by people outside the U.S. attempting to defraud merchants through the use of stolen credit cards, counterfeit checks and money orders.

The case stems from services mandated under the Americans with Disabilities Act that require carriers to provide voice telephone services for hearing or speech-impaired callers. Carriers, including AT&T, employ intermediaries who relay real- time conversations for hearing-impaired callers.

Alisa Finelli, a Justice Department spokeswoman, had no immediate comment yesterday after regular business hours.

The case is Lyttle v. AT&T Communications of Pennsylvania, 10-01376, U.S. District Court, Western District of Pennsylvania (Pittsburgh).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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