Three Former Owners and Employees of Two Video Relay Service Companies Plead Guilty to Defrauding FCC Program

WASHINGTON—Three former owners and employees of two different video relay service companies pleaded guilty today to conspiring to defraud the Federal Communications Commission’s (FCC) Video Relay Service (VRS) program of more than $2.5 million, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.

The following defendants each pleaded guilty before U.S. District Court Judge Joel A. Pisano in Trenton, N.J., to one count of conspiracy to commit mail fraud:

• Yosbel Buscaron, 25, a co-owner of Florida-based Innovative Communication Services for the Deaf (ICSD);
• Lazaro Fernandez, 35, a co-owner of ICSD; and
• Natan Zfati, 32, a former video interpreter (VI) for New York and New Jersey-based Deaf and Hard of Hearing Interpreting Services, Inc. (DHIS).

Buscaron, Fernandez, and Zfati were charged with engaging in schemes to steal millions of dollars from the FCC’s VRS program, along with 23 other people and one company, in six indictments unsealed on Nov. 19, 2009. According to the indictments, VRS is an online video translation service that allows people with hearing disabilities to communicate with hearing individuals through the use of interpreters and web cameras. A person with a hearing disability who wants to communicate with a hearing person can do so by contacting a VRS provider through an audio and video Internet connection. The VRS provider, in turn, employs a video interpreter to view and interpret the hearing disabled person’s signed conversation and relay the signed conversation orally to a hearing person.

VRS is funded by fees assessed by telecommunications providers to telephone customers, and is provided at no cost to VRS users. The FCC reimburses VRS providers at a rate of approximately $6.50 per minute, which amounts to approximately $390 per hour.

In pleading guilty, the three defendants admitted that they conspired with others to pay individuals to make fraudulent VRS phone calls and to process fraudulent VRS phone calls that were billed to the FCC through VRS provider Viable Communications Inc. Each defendant admitted to generating or processing thousands of illegitimate VRS hours that were billed to the FCC. According to information contained in the plea documents, Buscaron, Fernandez and Zfati each admitted that their role in defrauding the FCC’s VRS program led to a total loss of between $2.5 and $7 million.

At sentencing, the defendants each face a maximum sentence of 20 years in prison, a fine of $250,000, as well as mandatory restitution and forfeiture. Sentencing is scheduled for June 29, 2010.

To date, 11 individuals have pleaded guilty to their roles in defrauding the FCC. Co-defendants Joshua Finkle and Irma Azrelyant, co-owners of DHIS, pleaded guilty on Feb. 18, 2010, to their roles in the scheme and are scheduled to be sentenced on June 29, 2010. Co-defendant Alfia Iskandarova, a DHIS VI, pleaded guilty on March 4, 2010, and is scheduled to be sentenced on June 28, 2010.

The indictments charge owners and employees of the following six companies with engaging in a scheme to defraud the FCC’s VRS program:

• Viable Communications Inc., of Rockville, Md.;
• Master Communications LLC of Las Vegas;
• KL Communications LLC of Phoenix;
• Mascom LLC of Austin, Texas;
• Innovative Communication Services for the Deaf Corp. (ICSD) of Miami Lakes, Fla.; and
• Deaf Studio 29 of Huntington Beach, Calif.

An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.

These cases are being prosecuted by Assistant Chief Hank Bond Walther and Trial Attorney Brigham Cannon of the Criminal Division’s Fraud Section. The cases are being investigated by FBI’s Washington Field Office, the U.S. Postal Inspection Service, and the FCC Office of Inspector General.