The Department of Justice has indicted three men for allegedly abusing the Lifeline program, which provides low-income Americans with subsidized landline or prepaid wireless phone service. Thomas Biddix, Kevin Brian Cox, and Leonard Solt were charged on April 9th with 15 counts of wire fraud, false claims, and money laundering, as well as one count of conspiracy to commit wire fraud, all of which allegedly resulted in $32 million in improper reimbursements over the course of two years.
Regulators looking into the burgeoning federal program to provide subsidized phone service for the poor are finding growing cause for concern. Last year, the government spent an estimated $2.2 billion on the Lifeline program, up from $819 million four years earlier, as dozens of small companies were authorized to start providing the service. Now, inquiries in states from Alaska to Florida are raising questions about the source of that growth, according to a review of documents in federal and state investigations. Investigators say they have turned up some unorthodox tactics by companies participating in the program, such as signing up customers in hospital rooms and enrolling subscribers by mailing them unsolicited phones. In other cases they have uncovered more straightforward attempts to sign up ineligible customers, according to federal and state documents.
