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. While several fines have been levied since the FCC started tightening standards two years ago, this is the first time the federal government has brought a criminal case.
Biddix, Cox, and Solt allegedly operated Associated Telecommunications Management Services (ATMS), a holding company that ran at least five subsidiary mobile operators. Between 2009 and 2011, the company received millions of dollars in subsidies through the Lifeline program, but its rapid growth drew the attention of investigators. A probe in Florida revealed that it had received around $37 million in 2010 alone but had misrepresented its enrollments to the government. Ultimately, ATMS agreed to a $4 million settlement with the Florida Public Service Commission but failed to pay it. Along with the indictment, the court authorized seizure of the men’s “ill-gotten gains,” including multiple bank accounts, a yacht, and “several luxury automobiles.”
Sorry this doesn’t involve food stamps at ATMs or flat-screen TVs.