FBI Charges Three With Defrauding $32M From FCC

Three individuals have been indicted for their alleged roles in an approximately $32 million fraud against a Federal Communications Commission (FCC) program designed to provide discounted telephone services to low-income customers.

The charges were announced Thursday.

Thomas E. Biddix, 44, of Melbourne, Florida; Kevin Brian Cox, 38, of Arlington, Tennessee; and Leonard I. Solt, 49, of Land O’Lakes, Florida, were charged by a criminal indictment returned on April 9, 2014, and unsealed Thursday in federal court in Tampa, Florida. The indictment charges the three defendants with one count of conspiracy to commit wire fraud and 15 substantive counts of wire fraud, false claims, and money laundering. The court also authorized a seizure warrant seeking the defendants’ ill-gotten gains, including the contents of multiple bank accounts, a yacht, and several luxury automobiles.

As alleged in the indictment, the defendants engaged in a scheme to submit false claims with the federal Lifeline Program administered by the Universal Service Administrative Company, a not-for-profit corporation designated and authorized by the FCC. The program aims to provide affordable, nationwide telephone service to all Americans through discounted phone service for qualifying low-income customers.

The indictment alleges that the defendants owned and operated Associated Telecommunications Management Services LLC (ATMS), a holding company that owned and operated multiple subsidiary telephone companies that participated in the Lifeline Program. Biddix, chairman of the board at ATMS, and Cox and Solt allegedly caused the submission of falsely inflated claims to the Lifeline Program between September 2009 and March 2011 that resulted in ATMS fraudulently receiving more than $32 million.