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Telecom Will Pay $13.4 Million to Settle False Claims Act Allegations

TracFone Wireless Inc., a Miami-based telecommunications carrier, will pay $13.4 million to settle allegations of False Claims Act violations.

The case was originally brought by a whistleblower, Farrell Gordon, who will receive $462,500 in compensation for his services in bringing the case forward. Whistleblowers in False Claims Act cases are eligible to receive 15 to 30 percent of the government’s recovery.

Case background

According to a press release issued by the government. TracFone signed up more than 175,000 subscribers between 2012 and 2015 who were not eligible for the Federal Communications Commission’s (FCC) Lifeline Program.

Every year, Lifeline provides almost $2 billion to help low-income consumers with telecommunication needs, including free cell phones and monthly cell phone service. To qualify, an individual must be at or below 135% of the federal poverty guidelines established by the government, or must receive benefits from certain federal assistance programs.

TracFone was alleged to have worked with third-party sales providers to get customers signed up who were ineligible for the Lifeline service. TracFone’s computer software also featured a glitch that would allow people to enroll in Lifeline even if not eligible, which allowed some agents to exploit the glitch to increase their own enrollments and commissions.

TracFone did not meet its responsibility to review applications adequately and did not properly investigate reports of these ineligible subscribers–reports that would have revealed the aforementioned software glitch.

By the time TracFone discovered the glitch in August 2015, it had to repay nearly $11 million to Lifeline, an amount credited as part of this settlement figure.

The whistleblower had been a Lifeline sales representative.

For more information about False Claims Act lawsuits, contact an experienced whistleblower lawyer at Kardell Law Group.

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