The FCC proposed a more than $200,000 fine against Kyle Traxler, CEO of Cleo Communications, for apparent violations of the federal wire fraud law and FCC rules stemming from its participation in the Emergency Broadband Benefit Program. Following an Enforcement Bureau investigation, the agency concluded Traxler apparently “repeatedly” committed wire fraud by misrepresenting its authorization to participate in the EBB and using that authorization to defraud consumers via interstate wires.
The FCC said in its decision “numerous” complaints were filed against the company with the Commission, the Universal Service Administrative Company, and the Better Business Bureau for its alleged conduct. The FCC said Cleo represented itself as an EBB provider on its website and told consumers they would receive EBB program discounted broadband services and devices in exchange for online electronic payments to Cleo. “[B]ut the company never delivered the broadband services or devices,” said the FCC.
The FCC established the EBB program in February 2021, at the direction of Congress. The point was to provide broadband services and devices to help eligible low-income households stay connected during the COVID pandemic. The program ended in December 2021, but its objectives remain served through the FCCs Affordable Connectivity Program.
Though Cleo applied for and received expedited Commission approval to take part in the EBB, it never filed for or received disbursements from the program.
Consumers ordered connected devices, such as laptops and tablets or broadband services, through Cleo online and made payments by credit card, PayPal, or Venmo.
According to the decision, “A consumer complaint against Cleo dated July 26, 2021, alleges, ‘I got in contact with them, after providing proof of my eligibility I ordered a hotspot router and laptop from them at a discount for EBB. I paid for the items but never received [sic] I was told they would arrive in 10 days and now it’s been a month. And after I asked where the items were that I ordered they stopped responding to my emails.’”
Because of what the FCC said were “untruthful and inaccurate” statements and “lack of candor,” it proposed the largest fine available, a total of $220,210. Cleo’s Traxler has 30 days to either pay in full, or seek a reduction or cancellation of the penalty.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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