AT&T improperly received millions of dollars from a government reimbursement fund by ignoring fraudulent use of the IP Relay call system provided free of charge to hearing- and speech-impaired US residents, the US government alleged this week.

"The United States brings this action to recover millions of dollars that have been paid to Defendant AT&T for its improper handling and billing of thousands of Internet Protocol Relay calls made by Nigerian and other international users seeking to defraud merchants in the United States," the US said in a complaint filed yesterday in US District Court in Western Pennsylvania.

The US government reimburses IP Relay providers $1.30 per minute, but calls originating outside the US and calls made by people without a hearing impairment are ineligible for reimbursement. IP Relay allows hearing-impaired users to place phone calls by typing messages into an Internet-based system. The messages are relayed to the intended recipient by assistants employed by AT&T and other providers. The FCC started requiring providers to verify the accuracy of each user's name and mailing address in 2009, but AT&T found a way to skirt the rules, the Justice Department said.

"The complaint alleges that, out of fears that fraudulent call volume would drop after the registration deadline, AT&T knowingly adopted a non-compliant registration system that did not verify whether the user was located within the United States," Justice officials said in a press release. "The complaint further contends that AT&T continued to employ this system even with the knowledge that it facilitated use of IP Relay by fraudulent foreign callers, which accounted for up to 95 percent of AT&T’s call volume. The government’s complaint alleges that AT&T improperly billed the TRS (Telecommunications Relay Services) Fund for reimbursement of these calls and received millions of dollars in federal payments as a result."

In a statement e-mailed to Ars, AT&T said it follows the FCC's rules. "AT&T has followed the FCC's rules for providing IP Relay services for disabled customers and for seeking reimbursement for those services," AT&T spokesperson Marty Richter said. "As the FCC is aware, it is always possible for an individual to misuse IP Relay services, just as someone can misuse the postal system or an email account, but FCC rules require that we complete all calls by customers who identify themselves as disabled." AT&T's statement did not say whether it verified the location of users as required by the government.

UPDATE: Bloomberg reports that the amount AT&T is accused of improperly charging to the federal government is $16 million. The government is seeking triple damages.