Taxpayers May Be Paying Half A Billion A Year For Fake Obamaphones

Guest Post by Thomas Phippen

Taxpayers may be paying half a billion dollars a year in fraudulent cell phone subsidies, according to a letter sent Wednesday by a senior Federal Communications Commission official.

Ajit Pai, the senior Republican commissioner at the FCC, says there may be as many as 4.2 million duplicate recipients of Lifeline Assistance subsidies, also known as the “Obamaphone” program. (RELATED: Dems Prepare To Ram ‘Obamaphone’ Expansion Through FCC)

In a letter to chief executive of Universal Services Administrative Company (USAC), Pai requests an audit of how carrier sub-contractors vet the applications for new subsidies. In the letter, first published by The Hill, Pai says that cell phone carriers may have bypassed a safeguard designed to prevent fraudulent claims.

The National Lifeline Assistance Database (NLAD) tracks recipients, allowing the USAC to limits payouts to one subsidy per household. The USAC has a exception, however, for families living as “Independent Economic Households” in group homes or homeless shelters.

“Unfortunately, this well-natured exception to the override process appears to be undermining the one-per-household rule,” Pai said.

Analysis of the data from NLAD reveals the “alarming” fact that 4,291,647 accounts, more 34.5 percent of all enrollees in the Lifeline program between October 2014 and April 2015 enrolled through the loophole.

“That’s more people than live in the state of Oregon,” Pai said.

Two years ago, the FCC discovered over 32,000 false accounts were receiving subsidies through carrier Total Call Mobile, signed up under duplicate addresses with fake social security numbers, leading to the creation of the NLAD.