Sales Reps Allegedly Signed Up Ineligible Customers
Carrier Failed To Supervise Compliance
$462,500 Reward To Former Sales Rep
Each year, individuals bring more enforcement efforts against companies defrauding the government than the government itself brings. These cases brought by private citizens are actions under the False Claims Act, (“FCA”), 31 U.S.C. § 3729 et seq. and are known as “qui tam actions.” Qui tam actions recover billions for the government every year. The FCA authorizes substantial awards to the plaintiffs, known as qui tam relators (whistleblowers), for bringing and prosecuting these and other cases concerning fraud on the government. 31 U.S.C. §3730 (d). Frequently, relators are current or former employees, representatives or agents of the businesses committing the alleged fraud. If you have credible information of fraud against the government in violation of the FCA and live in Los Angeles or elsewhere in California, call us today at (415)441-8669 and we can help. Our toll-free number is 1-888-50EVANS (888-503-8267).
Recent FCA Whistleblower Reward
The U.S. Department of Justice (DOJ) recently announced that a wireless phone carrier has agreed to pay $13.4 million as part of a civil settlement to resolve allegations that it violated the FCA by signing up more than 175,000 ineligible customers in connection with the Federal Communications Commission’s (FCC) Lifeline Program (Lifeline). Lifeline, created by Congress in the Telecommunications Act of 1996, provides nearly $2 billion each year to assist low-income consumers with their telecommunications needs. In many cases, this consists of a free cell phone (provided by the carrier) and free monthly cell phone service (provided by the government). In order to qualify for Lifeline, a consumer’s income must be at or below 135% of the Federal Poverty Guidelines or the consumer must receive benefits from certain specified federal assistance programs.
The government alleged that between 2012 and 2015, the telecommunications carrier impermissibly signed up more than 175,000 subscribers who were ineligible for the Lifeline program. According to the government, the carrier’s computer software contained a glitch that allowed ineligible persons to enroll in Lifeline, which certain sales agents purportedly exploited to increase enrollments and commission payments. The government alleged that the carrier failed to adequately review the applications and did not properly investigate reports of clearly ineligible subscribers enrolled in the program that would have revealed the glitch. After the carrier eventually discovered the software glitch, it repaid more than $10.9 million to Lifeline, an amount that was credited as part of the $13.4 million settlement. A former sales agent blew the whistle on the fraudulent claims and he is receiving $462,500 as a reward for his whistleblowing efforts.
How A Qui Tam Action Begins
Individuals with original and credible information of false claims, like the sales agent in the reported case, begin FCA qui tam cases by filing a complaint under seal in the federal court. At the same time, the relator submits a disclosure to the DOJ outlining the material evidence the relator has of the alleged false claims. 31 U.S.C. § 3730(b). The seal period of the complaint lasts 60 days during which the DOJ investigates the claims. 31 U.S.C. § 3730(b)(2). (If necessary, the government can, and often does, extend the 60-day period during which the allegations are kept under seal.) If the government decides to intervene in the case, the government essentially takes over the litigation. 31 U.S.C. § 3730(c)(1). If the government declines to intervene, the relator may proceed with the litigation on his or her own. 31 U.S.C. § 3730(c)(3).
If you have credible information of government fraud in Los Angeles or elsewhere in California, call Ingrid M. Evans at (415) 441-8669, or toll-free at 1-888-50EVANS (888-503-8267) or by email at <a href=”mailto:email@example.com”>firstname.lastname@example.org</a>. In addition to FCA and CFCA whistleblower cases, Ingrid and Evans Law Firm, Inc. also handle bank fraud whistleblower cases under FIRREA/FIAFEA, commodity trading and securities fraud under the Commodities Futures Trading Commission Whistleblower Program and the Securities and Exchange Commission Whistleblower Program, and tax fraud under the Internal Revenue Service Whistleblower Program.
 Evans Law Firm, Inc. was not involved in the case in any way. The reported case is captioned United States ex rel. Gordon v. TracFone Wireless, Inc., et al., No. 6:15-cv-1457 (M.D. Fla.).