The Federal Communications Commission (FCC) has announced plans to issue a $51 million fine to California-based Total Call Mobile.
The agency claims that Total Call Mobile was defrauding the subsidized Lifeline program, which subsidizes wireless service for low-income Americans.
The FCC accused California-based Total Call Mobile of fraudulently enrolling tens of thousands of duplicate and ineligible consumers in the Lifeline program.
The company received an estimated $9.7 million in improper payments since 2014, the FCC claims.
In the fourth quarter of that year, 99.8% of the company’s enrollments allegedly involved overriding a system designed to stop the registration of duplicate customers.
FCC enforcement bureau chief Travis LeBlanc said the agency reserves its toughest penalties for those who “defraud or abuse federal programs.”
“Any waste, fraud, or abuse in the Lifeline program diverts scarce funds from the consumers they are meant to serve and undermines the public’s trust in the program and its stewardship,” he said in a statement.
Total Call, which operates in at least 19 states or territories, is not responding to requests for more information at this time.
Roughly 18 million people eligible for food stamps and Medicaid receive cell phone subsidies through the 31-year-old Lifeline program.
When accepted into the program wireless carriers receive a $9.25-per-month subsidy for every person enrolled in the program and are supposed to pass the discount on to customers.
The Lifeline program has come under fire from conservatives who do not believe Americans should be footing the bill for the program that costs $2 billion annually.
The FCC voted in March to expand the Lifeline program to broadband services.