FCC Proposes $63 Million Fine for Alleged Lifeline Fraud


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The FCC proposed a $63 million fine Tuesday against a company officials say apparently committed fraud against the government and taxpayers, by padding its subscriber base for the agency’s Lifeline subsidies, for mobile phone support.

The Enforcement Bureau alleges American Broadband and Telecommunications Company, an Ohio wireless reseller, through its sales agents, created fake accounts by enrolling more than 12,000 dead people, and by manipulating the personal information of existing Lifeline subscribers. In its Notice of Apparent Liability, the Commission based the proposed penalty on more than 42,000 allegedly improper Lifeline claims made in August 2016, after the company previously told the Commission it fixed its systems and processes to ensure compliance with FCC rules.

The $63.5 million proposed fine is the largest-ever proposed for violations of rules governing carriers seeking to receive support from the Universal Service Fund, which pays for Lifeline and three other support programs, according to the agency. The Lifeline program provides a $9.25 discount on broadband and phone services for low-income consumers. Carriers participating in the program receive funds for each eligible Lifeline subscriber and must pass the savings on to those subscribers.

The agency also found the company’s owner, Jeffrey Ansted, liable for the proposed penalty. The agency says he apparently used over $10 million in Lifeline funds to pay for a Ferrari convertible, a $1.3 million Florida condo condominium, yacht club and country club memberships, and an $8 million Cessna jet.

The company and Ansted will be given a chance to respond to the allegations. The Enforcement Bureau will consider that response before making a final decision.

October 25, 2018