WASHINGTON, D.C. -- Federal Communications Commission members voted recently to create a Fraud Division within its Enforcement Bureau. The action codifies and reiterates the importance of ongoing work by FCC enforcement staff to combat misuse of taxpayer funds.
The new Fraud Division will be dedicated to investigating and prosecuting fraud in the Universal Service Fund (USF). The team will work closely with the FCC's Office of Inspector General, the U.S. Department of Justice (DOJ) and other law enforcement agencies to prosecute unlawful conduct. The Fraud Division will be established following review and approval by the Office of Management and Budget and the House and Senate Appropriations Committees, as well as publication of the Order in the Federal Register. The FCC released the news on Feb. 5.
USF features four programs: (1) the High Cost program, which provides financial support to eligible telecommunications carriers serving high cost areas; (2) the Schools and Libraries Program (also known as E-Rate), which delivers discounted communications services to eligible schools and libraries; (3) the low-income program (aka Lifeline), designed to help low-income consumers pay for telephone and broadband services; and (4) the Rural Health Care Program, which gives discounted telecommunications and broadband services to rural healthcare providers.
The Commission is responsible for implementing and overseeing the USF.
The FCC has strong rules against the misuse of funds in these programs. The Enforcement Bureau is tasked with pursuing those that fail to abide by those rules. Among its recent USF-related enforcement actions, the Commission proposed a fine of more than $63 million against American Broadband for apparent large-scale violations in the Lifeline program, including apparently creating fake accounts by enrolling deceased individuals and manipulating the personal information of existing Lifeline subscribers. The Commission also recently proposed an $18.7 million fine against DataConnex for apparently defrauding the Rural Health Care Program, including apparent use of forged, false, misleading, and unsubstantiated documents to improperly seek funding from the Fund.
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