Last week, the Commission released a Notice of Apparent Liability for Forfeiture and Order finding Total Call Mobile (“TCM”) apparently liable for overbilling the Lifeline program by enrolling tens of thousands of duplicate and ineligible consumers into the program.  The Commission proposes a $51,070,322 forfeiture penalty, which reflects the seriousness, duration, and scope of TCM’s multiple apparent violations.  The categories of TCM’s apparent violations involve:

  • the filing of and failure to correct improper Form 497s;
  • the lack of policies and procedures to ensure consumer eligibility; and
  • the enrollment of 2,587 duplicate consumers for several months after USAC specifically alerted TCM to these improper enrollments.

Specifically, the Enforcement Bureau’s Universal Service Fund Strike Force’s investigation of TCM found that the company apparently engaged in systematic and egregious misconduct, involving over 800 TCM employees, including:

  • sales agents enrolled tens of thousands of duplicate consumers;
  • the company was aware of a systematic problem of duplicate enrollments as early as November 2013;
  • during the fourth quarter of 2014, 99.8 percent of TCM’s enrollments nationwide involved overriding the third-party verification system designed to catch duplicate enrollments;
  • sales agents shared eligibility documents, such as Supplemental Nutrition Assistance Program (SNAP) cards, in order to use the documents to conduct multiple enrollments;
  • employees staffing an internal sales agent help line advised agents on how to get around or disguise defective identification or eligibility documentation for applicants;
  • as early as May 2014, employees told TCM management that they were aware of increasing instances of eligibility fraud, but no meaningful changes to employee training or verification procedures were made; and
  • one sales agent used the identification from a stolen wallet to register 10 Lifeline cell phones in the name of the wallet’s owner without his/her permission.

From January 2014 through March 2016, TCM received a total of $60,865,254 in reimbursements from the Fund.  The Commission finds that the Fund has been harmed by an amount equal to at least 16 percent of TCM’s requests for reimbursement from the Fund during this time ($9,738,440.64).  In developing the forfeiture amount, the Commission relies on Section 503(b)(2)(B) of the Act, which authorizes the Commission to assess a forfeiture of up to $160,000 for each violation or each day of a continuing violation, up to a statutory maximum of $1,575,000 for a single act or failure to act.  In addition to base forfeitures for TCM’s apparent violations, the Commission also proposes several upwards adjustments for TCM’s egregious violations, notably, an upwards adjustment of $29,215,322, which is three times the amount of the loss to the Fund due to TCM’s actions.

TCM must pay the proposed forfeiture or file a written statement seeking reduction or cancellation of the proposed forfeiture.  TCM is also ordered to submit a report and explain why the Commission should not (1) order USAC to suspend all Lifeline reimbursements to TCM; (2) revoke approval of TCM’s ETC compliance plan; and (3) initiate proceedings against TCM to revoke its Commission authorizations.  TCM must respond within 30 days from the April 7th release of the NAL to this request.

The FCC has also released a News Alert concerning the NAL.

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