￼Obama Phone fraud is one of our pet peeves. Longtime readers of FreeGovernmentCellPhones.net may think we rant and rave about the subject too often, but we firmly believe that fraud must be rooted out of Lifeline Assistance is the program is to survive and continue to help cash-strapped Americans.
With that in mind, we applaud the announcement that the United States Department of Justice has busted three men for defrauding the free government cell phone program of a mind- boggling $32 million.
According to politico.com, Florida residents Thomas Biddix, Kevin Brian Cox and Leonard Solt have been charged with one count of conspiracy to commit wire fraud. But that’s just the beginning of their problems. They were also charged with another 15 counts of wire fraud, false claims and money laundering in a scam that defrauded the free government cell phone program.
Three government entities — the Federal Bureau of Investigation (FBI), the Internal Revenue Service (IRS) and the Federal Communications Commission (FCC) — worked together on the investigation and to bring the charges against the three men.
“Lifeline helps ensure that all Americans can afford phone service, providing connections to jobs, family and 9-1-1,” FCC Chairman Tom Wheeler commented. “But we will not tolerate abuse of this program and are gratified to see the results of our hard work to battle fraud.”
Here’s how the government says alleged scam worked: Biddix, Cox and Solt knowingly submitted wildly inflated claims to Lifeline during an 18-month period from September 2009 to March 2011. In total, $32 million in fraudulent claims were submitted on behalf of a company named Associated Telecommunications Management Services. According to the indictment, Biddix also serves as the chairman of ATMS.
The indictment accuses the three men of using the fraudulently-obtained funds, and we quote, to “finance their personal business ventures and lavish lifestyles, including personal living expenses, luxury automobiles, yachts and private jet airplanes.”
This is just the latest step the government has taken to reign in fraud and abuse in the free government cell phone program. Last year the FCC began a series of sweeping reforms that include:
- Creation of a national databases to track consumers’ Lifeline eligibility
- Changing the one-phone-per-household rule to permit separate low-income families who reside in the same house or apartment to participate in the program
- Setting specific methods of measuring the program’s performance and effectiveness
￼As a result of these changes the FCC says Lifeline slahed $200 million in fraud and abuse last year and hopes to save as much as $3 billion in just three years.
Lifeline, which is also known as the Obama Phone or simply the free government cell phone program got off the ground during the Reagan administration in the 1980s. It was conceived as a program to help low-income Americans pay for their home landline telephones. President Bush expanded the program in 2005 to cover cell phones, too.
Despite the clear history of the program, and the involvement of Presidents Reagan and Bush, the program has become known as the Obama Phone. Who knows? Perhaps that’s the reason the Obama administration seems so intent on cleaning up the program.
Whatever the reason, we heartily endorse any and all efforts to keep the free government cell phone program as fraud-free as possible.