Three individuals have been indicted for their alleged roles in an approximately $32 million fraud against the Federal Communications Commission (FCC) Lifeline telephone service program designed to provide discounted telephone services to low-income customers.
It does not appear that fraud and abuse in the Lifeline program are unusual.
About two million fraudulent accounts were uncovered by the Federal Communications Commission in 2013 alone.
In 2013, the Federal Communications Commission levied $32.6 million in fines against three companies that apparently violated program rules.
Investigations by the FCC’s Enforcement Bureau found that the companies apparently violated the FCC’s rules limiting Lifeline subscriptions to one subscriber per household, and received payments for thousands of consumers that already were obtaining Lifeline service from the same company.
Those three firms included Conexions Wireless, fined $18.4 million for apparent violations over the course of eight months in Arkansas, Maryland, and West Virginia.
Also charged was i-wireless, fined $8.8 million for apparent violations over seven months in Ohio, Illinois, North Carolina, Tennessee, West Virginia, New York, Indiana, and South Carolina.
True Wireless was fined $5.5 million for apparent violations over eight months in Arkansas, Maryland, Oklahoma, and Texas.
Representing more than $2 billion in annual disbursements, the Lifeline program has other problems, especially documentation.
A review by the Wall Street Journal in 2013 of Lifeline subscribers served by AT&T, Verizon, Telrite Corp., Tag Mobile USA and Virgin Mobile USA served 34 percent of total Lifeline subscribers in May 2013.
The study showed that 41 percent of the more than six million subscribers served by those carriers either couldn't demonstrate their eligibility or didn't respond to requests for certification.
The Lifeline program has been in operation since 1985, and provides access to fixed or mobile telephone service, as part of the Universal Service Fund.
Thomas E. Biddix, 44, of Melbourne, Fla., Kevin Brian Cox, 38, of Arlington, Tenn., and Leonard I. Solt, 49, of Land O’Lakes, Fla., were charged with one count of conspiracy to commit wire fraud and 15 substantive counts of wire fraud, false claims and money laundering.
The defendants owned and operated Associated Telecommunications Management Services LLC (ATMS), a holding company that owned and operated multiple subsidiary telephone companies that participated in the Lifeline Program.
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