United States Attorney's Office District of Connecticut
Press Release

NORTH HAVEN MAN PLEADS GUILTY TO SUBMITTING $2 MILLION IN FALSE CLAIMS TO FEDERAL FUND FOR DEAF

Kevin J. O'Connor, United States Attorney for the District of Connecticut, today announced that RAANAN LIEBERMANN, age 64, of 79 Bayard Avenue, North Haven, Connecticut, has pleaded guilty to a two-count Information charging him with making false statements to the Federal Communication Commission ("FCC"), and engaging in unlawful monetary transactions. In addition, PUBLIX NETWORK CORPORATION ("PUBLIX"), formerly located at 116 Washington Avenue, North Haven, also pleaded guilty to identical charges. The guilty pleas were entered yesterday, September 30, in New Haven federal court.

According to court documents, from approximately January 1999 through March 2001, LIEBERMANN and PUBLIX operated a telephone call center in North Haven that was supposed to provide TRS (or telecommunications relay services) to the deaf and speech-impaired. In general, TRS call centers (such as those operated by AT&T, Sprint, or MCI) would employ relay operators who are responsible for transliterating or "interpreting" conversations between a deaf person and a non-deaf person. The deaf person uses a text telephone (also known as a "TTY" machine) to communicate with the call center and request the relay operator to complete the call to a regular telephone being used by a non-disabled person. The deaf person then uses his or her TTY machine to transmit text communications to the relay operator. On the other end, the relay operator reads out loud those text communications through a standard telephone line for the non-deaf person to hear. In response, the non-disabled person uses a standard telephone to speak verbally to the relay operator; and the relay operator then types that response back to the deaf person to be read on his or her TTY machine.

In order to subsidize the costs of providing TRS services to the deaf, the FCC established the TRS Fund. To be reimbursed from the TRS Fund, a TRS provider must submit monthly reports of the total minutes of use ("MOUs") spent providing TRS on interstate telephone calls. The TRS provider is then reimbursed on a per-minute basis, which was approximately $1.18 to $1.32 per minute during the relevant time period.

In pleading guilty, LIEBERMANN and PUBLIX admitted that the TRS call center operated by PUBLIX was significantly different from the norm in several respects. First, nearly all of the TRS calls that were handled by PUBLIX were made by the same individuals, all of whom were employed by LIEBERMANN, PUBLIX, or an affiliated company controlled by LIEBERMANN. In other words, nearly all of the MOUs being submitted for reimbursement were generated by having employees of one Liebermann-controlled entity place TRS calls to employees of another Liebermann-controlled entity. Second, LIEBERMANN wrote various "scripts," which were distributed to his employees, and he directed his employees to read those "scripts" as part of their TRS calls.

LIEBERMANN admitted that he permitted and occasionally encouraged his employees to engage in a practice known as "dotting." "Dotting" occurs when participants on a TRS call have no meaningful communication, but simply strike the "period" or "dot" key on their text telephones on a regular basis in order to prevent the call from being automatically disconnected. Call participants who "dotted" were able to maintain their connection on a call, thereby extending its duration, without conducting any actual communication. In pleading guilty, LIEBERMANN and PUBLIX admitted that approximately 25 percent of the MOUs submitted for reimbursement were artificially generated through the practice of "dotting," and that the resultant fraudulent loss to the TRS Fund was approximately $2 million.

Eventually, the false statements made by LIEBERMANN and PUBLIX on their reimbursement requests were discovered in March 2001 after an audit conducted by the TRS Fund Administrator and the FCC. In conjunction with their guilty pleas, LIEBERMANN and PUBLIX will also be entering into a civil settlement with the FCC for over $7.9 million.

"The TRS Fund is a important federal program that exists to allow deaf persons to communicate over the telephone," U.S. Attorney O'Connor stated. "This was a substantial and reprehensible fraud, and this Office will vigorously prosecute all individuals and companies that unlawfully take advantage of vital federal programs."

When sentenced by Senior United States District Judge Ellen B. Burns on December 16, 2004, LIEBERMANN faces a maximum term of imprisonment of 15 years. In addition, both LIEBERMANN and PUBLIX face fines of up to $4 million.

This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Shawn J. Chen.

CONTACT:

U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
thomas.carson@usdoj.gov