Company Accused Of Defrauding U.S. Government Through Services For The Deaf

Last Updated Jan 7, 2010 6:10 AM EST

The U.S. Government spends billions on health care each year. The majority of this is through the large insurance programs Medicare and Medicaid. They also pay for services to many different sick and disabled groups. With any large spending programs like these there is always opportunity for fraud and corruption. In Medicare and Medicaid it often is caused by false billing or made up services that receive payment. A similar case has occurred with the Telecommunications Relay Service where a company in Maryland has been accused of fraudulent billing.

The Relay Service is a system where a deaf person is able to utilize a sign interpreter to complete phone calls to anyone anywhere without that person needing a special phone with a digital text readout. The U.S. Government contracts with companies to provide the interpreters and conduct the calls. They are paid on a by minute basis starting at about $6 and then going down on a sliding scale based on the number of minutes used.

The program started off in 1993 with about $30 million in funding. In 2007 over $400 million were billed to the Government. A company called Viable Communications was one of the major providers and had large billings to the government. Now its founder and owner John T.C. Yeh has been accused by the Department of Justice of padding his billings by having false calls conducted. The company and Mr. Yeh deny the charges and a trial awaits.

If the charges are true then this is a classic example of a company or person defrauding the government. Many programs have had issues like these and contracts that pay for a discrete delivery unit or time or materials are often involved. The problem is unless the billings look completely awry it is hard for the agencies to detect the fraud. In this case Mr. Yeh and others supposedly coached employees and others how to conduct the false calls in such a way as not to arouse suspicion. Viable and some of its sub-contractors made false calls with Viable even paying people to make them.

Since they were paid by the minute the more calls and the larger the amount of total minutes accumulated the more the company would earn. The situation is similar as if a defense contractor delivered faulty parts or billed for work not carried out. The charges being faced by Yeh and his accused accomplices are fairly standard mail fraud, false claims and conspiracy. The False Claims Act allows the U.S. and State Governments the ability to punish companies not delivering contracted goods or services.

The underlying issue is that the Government has so much money and spends it for such a variety of things that it provides opportunity for this kind of fraud. It is hard sometimes for auditors to have the necessary time to do the detailed analysis of billing necessary to always detect something like this. In this case the fraud has been alleged to go on since 2006 but there have been cases in the past of years of similar behavior. As long as there is this great pool of money available for services and goods these crimes will continue.

  • Matthew Potter

    Matthew Potter is a resident of Huntsville, Ala., where he works supporting U.S. Army aviation programs. After serving in the U.S. Navy, he began work as a defense contractor in Washington D.C. specializing in program management and budget development and execution. In the last 15 years Matthew has worked for several companies, large and small, involved in all aspects of government contracting and procurement. He holds two degrees in history as well as studying at the Defense Acquisition University. He has written for Seeking Alpha and at his own website, DefenseProcurementNews.com.