'Obamaphone' Provider Shells Out a Pretty Penny Over Fraud Claims

AP Photo/Carolyn Kaster

It stands to reason that big government programs are rife with fraud and corruption. Remember “Obamaphones”? The Condescender in Chief decided that Americans had a right to prepaid cell phones, so the federal government expanded a program that gave low-income households access to landline phone service to include cell phones.


“Officially known as the Lifeline program, it became known as the Obamaphone after news reports showed recipients thanking then-President Barack Obama for giving them phones,” reports Benjamin Leo at Times News Express. “That sparked a debate about the generosity of the American welfare system.”

“Under the program, the Federal Communications Commission paid companies to sign people up and provide service for the subsidized phones,” Leo continues. “The philosophy was that a phone was critical to connecting with family and friends or applying for jobs, and should be available to those on welfare.”

Between the Obama administration’s penchant for being too generous with other people’s money and the ever-present allure of “free stuff,” it shouldn’t be a surprise that the “Obamaphone” program was a perfect storm for abuse of a government program.

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The Department of Justice has ordered TracFone Wireless, the company the federal government contracted to provide the Obamaphones, to pay a fine of $13.5 million for signing up over 175,000 customers for Obamaphones who were actually ineligible for the program. The fraud took place between 2012 and 2015.

Over at Law Street, Christina Tabacco writes that “an investigation by the FCC Office of Inspector General showed that Miami, Florida-based TracFone’s sales agents exploited a loophole in the company’s process for verifying Lifeline eligibility. In so doing, the company signed up ‘non-low income veterans, Medicare patients, law enforcement, and other people who did not qualify for the Lifeline program,’ fraudulently drawing money from federal funds intended to serve those truly in need.”


The fines break down like this: about $10.9 million of the money TracFone must pay goes back into the Universal Service Fund, which we phone and internet users pay into to fund programs like these, while the rest will cover damages. Tracfone must also undergo a “comprehensive three-year compliance plan to prevent further transgression of the Lifeline program.”

Raise your hand if you’re surprised at this. I suppose we all should have come to expect this type of waste and abuse from a bloated federal government, especially when free-wheeling Democrats are at the helm.

Anybody want to place bets on which Biden-era programs we’ll be reporting on like this in a few years?


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