More problems with free cell phone program

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by Chris Nagus

KMOV.com

Posted on December 13, 2011 at 11:15 PM

Updated Wednesday, Oct 23 at 11:38 AM

(KMOV) -- News 4 has been investigating problems with a government funded cell phone program for months. The program is aimed at providing free telephone service for low-income Americans who also qualify for programs like Section 8, welfare, and food stamps.

The Federal Communications Commission oversees the Lifeline program. The agency confirms they are currently involved in multiple investigations that could result in civil penalties and criminal charges related to abuse of the program.

After airing stories about unwanted government funded cell phones showing up in mailboxes across St. Louis, News 4 received a call from Dean Stanley. Stanley told News 4 he was subcontracted to distribute free phones from Georgia based Life Wireless. A spokesperson for Life Wireless confirmed they were assisting St. Louis police in the prosecution of a rogue sales agent during a previous story. The company determined that agent signed up 917 unwilling cell phone recipients across St. Louis, but all government funds were refunded back to the program. Stanley told News 4 "Life Wireless seemed to get beat up in it, when we know they aren't the only ones doing stuff wrong." Stanley wanted to make it clear that he was not pulling names out of a phonebook to sign up customers, instead he was meeting them face to face.

Stanley allowed News 4 to watch as he and a partner distributed phones outside Missouri Workforce Development. Customers lined up at the window of his car, and many of them openly admitted they already had multiple government-funded phones. When asked one man told News 4, "this is to supplement my income." Another person on the street who wanted to remain anonymous said he had 4 phones from 4 different companies. According to the FCC this is a clear violation of the program rules. In many cases News 4 cameras observed people standing in line talking on cell phones as they signed up for the free phone. Stanley said he was just following the rules when he distributed the phones.

In Missouri, customers are not required to show a photo ID to receive a phone, instead they must show proof that they receive government assistance. In Illinois customers are not required to provide a photo id, and they are not required to show any proof that they are receiving government assistance.

The Federal Communications Commission responded with a written statement:

"Fraud or abuse in the Lifeline program is simply unacceptable, and we are moving aggressively to identify and stop bad actors. Recent actions include active, ongoing investigations into Lifeline fraud; a review of over 3.6 million Lifeline subscriptions to identify and eliminate duplicative support; a $1.5 million settlement earlier this year to resolve fraud allegations against a Lifeline provider; and coordination with state commissions to strengthen program oversight.  Moreover, the FCC will soon comprehensively reform Lifeline to further bolster protections against waste, fraud, and abuse and to preserve the integrity of a program that is essential to enabling low-income households to afford basic phone service, which can mean the difference in finding a job or reaching 9-1-1 during emergencies."

Missouri Senator Claire McCaskill told News 4 she's asking the FCC to review the program after she received an offer for a free phone at her Washington D.C. condo. McCaskill's U.S. Senate salary precludes her from receiving any form of government assistance. She says she was troubled when she noticed the written offer required no proof of eligibility in order to qualify for the program. On Wednesday night at ten News 4 will go in depth with Senator McCaskill at ten about her concerns with the program, and what she's asking the FCC to do to eliminate fraud and abuse.

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