AT&T Allegedly Profited From Nigerian Scam Artists

Constance Lyttle reported to work at the AT&T office in New Castle, Pennsylvania, from 2002 to 2010. A major part of her job involved answering calls from Nigerian nationals, who claimed to be deaf, to help them order goods from U.S. stores with stolen credit cards, and have them sent to Nigeria.

Once Lyttle realized she had inadvertently become part of a scam, she reported her findings to her supervisor, Jean Ulica. But the managers at AT&T, the 20th largest telecommunications company in the world, were in a bind. The cost of the call - as much as $1.30 a minute - was borne by U.S. taxpayers to help deaf speakers communicate, under an agreement with the Federal Communications Commission (FCC).

The way the system worked was as follows: a person calls AT&T's Telecommunications Relay Service (TRS) using a device known as a teletypewriter (TTY) and asks a communications assistant to place a call on their behalf and read out typed messages. By law, the phone number and location of the assistant are blocked so the person being called has no idea who they are talking to.

In 2008, under pressure from the FCC, AT&T set up a system under which they mailed postcards to deaf users with a ten digit identifying number to use TRS to limit the fraudsters. New Castle managers soon realized that this would cut off the cash cow, because as many as 95 percent of the calls they were processing were suspect.

"We are expecting a serious decline in [internet relay] traffic because fraud will go to zero (at least temporarily) and we haven't registered nearly enough customers to pick up the slack," Burt Bossi, an AT&T manager, told other members of the technical team on September 22, 2009, according to the lawsuit. The slowdown threatened the existence of the New Castle office which employed as many as 150 communications assistants at the location at any given time.

Instead AT&T told the communications assistants to simply ask callers to provide a U.S. address. So long as the address was real, the calls were connected. The company billed the U.S. government $16 million for such services after December 2009.

When Lyttle refused to participate in the scheme, she was fired on February 25, 2010. She retaliated with a whistleblower lawsuit against the company on October 23, 2010 which the U.S. Department of Justice agreed to join last week.

"Federal funding for Telecommunications Relay Services is intended to help the hearing- and speech-impaired in the United States," Stuart Delery, acting assistant attorney general for the Justice Department's civil division, said in a statement. "We will pursue those who seek to gain by knowingly allowing others to abuse this program."

AT&T has a lot at stake - it is a major beneficiary of federal government contracts. The Project on Government Oversight's Federal Contractor Misconduct Database estimates that the company has $681 million in government contracts.

AT&T doesn't like to say no to Washington either - it has been more than willing to help the National Security Agency install software from Narus to spy on U.S. citizens. Mark Klein, a retired engineer provided evidence in support of the Electronic Frontier Foundation class action lawsuit against the company but the courts refused to hear the case.

This time AT&T is not likely to be so lucky. If the company settles - and it probably will - Constance Lyttle will get a big payout, (whistleblowers get as much as 20 percent of the money recovered) Nigerian scammers will lose out but AT&T will get to keep its lucrative deals with Washington.