DOJ announces $1.5 million settlement with Alaska company in FCC qui tam

by Ben Vernia | February 22nd, 2011

In an announcement on February 22, the Department of Justice stated that it had reached a settlement for more than $1.5 million with General Communication, Inc., over claims that the company defrauded the FCC’s Low Income Support Program. According to DOJ’s press release:

General Communication Inc. (GCI) has paid $1,556,075 to settle allegations that Alaska DigiTel LLC, a former Alaska limited liability company now owned by GCI, submitted false claims to the Federal Communications Commission’s (FCC) Low Income Support Program, the Justice Department announced today.

The Low Income Support Program of the Universal Service Fund, which includes the Lifeline, LinkUp and Toll Limitation Services, was created by Congress in the Telecommunications Act of 1996 and is administered by the Universal Service Administrative Company for the FCC. Under the Low Income Support Program, eligible individuals may apply for free or discounted phone or wireless services. Reimbursement is paid directly to Eligible Telecommunications Carriers, such as Alaska DigiTel.

Today’s settlement resolves allegations that Alaska DigiTel violated the False Claims Act by submitting claims to the Low Income Support Program for improperly substantiated, duplicative, or otherwise ineligible subscribers for the period from Jan. 1, 2004, though Aug. 31, 2008.

The case was brought by a whistleblower as a qui tam action. The whistleblower – known as a relator – will receive $260,274 (a 16.7% share) of the settlement.

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