The FCC issued a Notice of Apparent Liability for Forfeiture in the amount of $51,070,322.00 to Total Call Mobile (TCM) for apparently enrolling tens of thousands of duplicate and ineligible consumers into the Lifeline program. The FCC alleges that since 2014, Total Call has requested and received an estimated $9.7 million in improper payments despite repeated and explicit warnings from its own employees, in some cases compliance specialists, that company sales agents were engaged in widespread enrollment fraud. The investigation was conducted by the Enforcement Bureau’s Universal Service Fund Strike Force.
The Task Force found, among other things, that Total Call’s sales agents enrolled tens of thousands of duplicate customers and that:
- Total Call was aware of a systematic problem of duplicate enrollments as early as November 2013, a full year before the Universal Service Fund administrator raised the issue with the company.
- During the fourth quarter of 2014, 99.8% of Total Call’s enrollments nationwide involved overriding the third-party verification system designed to catch duplicate enrollments.
- Sales agents shared eligibility documents 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 Total Call management that they were aware of increasing instances of eligibility fraud but the company failed to make meaningful changes to employee training or verification procedures.
Charges include enrolling phantom consumers, failing to ensure that consumers certified their applications and having sales sign the certification in place of the consumer; failing to train sales agents; and filing Form 497s that included ineligible or duplicate consumers in the line count. The fine was calculated as follows:
- $20,000 for each of the 126 Form 497s that sought reimbursement for duplicate or ineligible consumers ($2,520,000.00);
- $5,000 for each of the 2,584 duplicate consumer TCM failed to de-enroll as of April 26, 2015, for an additional forfeiture of $12,935,000;
- An upward adjustment totaling three times the harm suffered by the Fund. The FCC calculated the harm suffered by the fund to be $9,738,440.64, so the total upward adjustment was $29,215,322, which is three times that amount.
- A further upward adjustment of: (1) $100,000 for TCM’s failure to meet the terms of its FCC compliance plan; and (2) $6,300,000 in light of TCM’s egregious conduct.
TCM was given 30 days to submit a report and explain why the FCC 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.