26 accused of defrauding program for deaf

Twenty-six people in nine states, including a Philadelphia man and the mother of a former Miss Deaf New Jersey, were charged with defrauding a federal program for the deaf of $50 million, the government says.

The video-relay program helps people who are deaf or hard of hearing talk on the phone. The Federal Communications Commission regulates the program, which is funded by surcharges of 7 cents to 20 cents a month on consumer phone bills.

The scheme racked up millions of phony reimbursable minutes to the program between 2006 and this year, according to the Justice Department. The government unsealed six indictments in the case in Washington on Nov. 19.

With video-relay services, a deaf person places a call to a sign-language interpreter over a video phone. The sign interpreter then relays the deaf person's conversation to a hearing person. The government, from a special fund, reimburses the employer of the sign-language interpreters for each minute they are on the phone.

Investigators said the defendants developed schemes to generate fraudulent minutes by hiring deaf people and others to dial phone numbers with the sole intent of billing the special fund. Some calls were to prerecorded messages or people reading novels that could last more than two hours, thus establishing records that calls had been made.

The interpreters submit call logs to get paid for their services. The government reimbursed the defendants at a rate of about $390 an hour, the Justice Department said.

"The defendants are alleged to have generated fraudulent call minutes by making it appear that deaf Americans were engaging in legitimate calls with hearing persons," Assistant U.S. Attorney Lanny A. Breuer said in a statement. "In reality, the defendants were simply attempting to steal money from an FCC program that is funded by every single American who pays their telephone bills."

Hennadii Holovkin, of Philadelphia, was identified in court documents as a Russian sign-language interpreter. He could not be reached for comment yesterday.

Irma Azrelyant, of Basking Ridge, N.J., also was named in the indictments. She is the mother of Raymonda Azrelyant, Miss Deaf New Jersey from 2005 to 2007. Irma, who was identified as the co-owner of Deaf and Hard of Hearing Interpreting Services Inc., did not return a phone call to her answering service or home phone or answer an e-mail.

Justice Department spokeswoman Laura Sweeney said yesterday that Holovkin was scheduled to be arraigned in Trenton on Dec. 15. He was arrested and released on bail, she said. She did not provide the information on Azrelyant.

The indictments also named companies or individuals in New York, Florida, Texas, Arizona, Nevada, Oregon, and Maryland.

Evidence for the indictments was presented to a grand jury in Camden. The case was investigated by the FBI, the U.S. Postal Service, and the FCC. It was the largest investigation ever undertaken by the FCC inspector general, the agency said.

Video-relay service has exploded to almost $1 billion a year from less than $50 million in the late 1990s. Many companies entered the business when the FCC loosened rules on the program and reimbursed companies for start-up business costs, marketing, training, and executive pay.

The service allows the deaf and hard-of-hearing to interact with mainstream society, experts say. But others warned of abuse.

Thomas Chandler, chief of the FCC's disability-rights office, said in an internal agency e-mail in 2007 that the program was a "classic fleecing of America." The e-mail was contained in a congressional report, which was released in December 2008.

The FCC said on Nov. 19 that it had tightened rules in the program and opened a hotline for reporting fraud.