Feds Sue AT&T for Aiding and Abetting Nigerian Scammers

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From the National Law Journal:

AT&T Corp. is accused of wrongly collecting millions of dollars from a government fund intended to bankroll telephone service for hearing and speech-impaired people, but was instead overwhelmingly used by Nigerian scammers, the Department of Justice alleged in a False Claims Act suit announced March 22.

Say what? Did AT&T get scammed itself? If DOJ — and the whistleblower who exposed AT&T’s involvement — are to be believed, no. They were making lots of money from a program that was designed to help the hearing-impaired make phone calls by typing text that was then relayed as voice communication by an AT&T operator. But it turns out that because the service is anonymous, it became a favorite for Nigerian scammers too. What’s more, AT&T knew it:

On April 6, 2010, an AT&T Inc. manager pondered a drop in volume in the company’s government-subsidized service for hearing-impaired callers. Reassuring a colleague in an email, the manager said she was “not ready to throw up flags” because “it was Easter Monday yesterday, which is celebrated in Nigeria.”

….The government alleges that scammers operating out of Nigeria used the service to defraud U.S. merchants by ordering goods with stolen credit cards and counterfeit checks. In essence, the government alleges, AT&T’s operators became mouthpieces for the scam artists.

AT&T got reimbursed $1.30 per minute for these calls, and the government says as many as 95% of them originated with scammers outside the U.S. A new registration program was put in place in 2008, but DOJ says AT&T did its best to undermine it. Bloomberg summarizes:

“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, a manager of AT&T’s technical team, said to other managers on Sept. 22, 2009, according to the complaint.

The following month, AT&T changed its registration system from a postcard one to an Internet one where users’ addresses are compared to those on a database called DASH to determine whether the address provided exists. Registrations immediately increased to 40 to 100 a day, the government alleges.

By the end of October 2009, AT&T managers were aware that credit card scams were being conducted by new users, the lawsuit alleges. “This is a consequence of easing registration restrictions,” Dave Claus, a technical manager, said in an e- mail to colleagues cited in the complaint.

Needless to say, AT&T says it did nothing wrong. I expect a settlement soon.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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