FCC Announces $21.7 Million Fine for Defrauding USF Health Program

improper payments received through the program, the agency said in a Friday news release announcing the notice of apparent liability. Network Services and CEO Scott Madison allegedly used forged and false documents to seek funding from the program, violating the federal wire fraud statute and the program’s competitive bidding rules, the FCC said. Never before has the agency issued an enforcement action involving the RHC program or proposed a fine for wire fraud related to a USF program, the commission said. “Forgery, bribery, bid rigging, and fraud are absolutely unacceptable in any federal program,” said Enforcement Bureau Chief Travis LeBlanc. “The Commission calls on Network Services Solutions and its CEO to account for any misuse of federal funds in this vital program that assists rural communities with access to critical services for health care.” Commissioners Ajit Pai and Mike O’Rielly approved in part and dissented in part. In a statement, Pai agreed that the FCC should recover the unlawfully taken funds, bar the company from getting any further USF subsidies and levy a “hefty fine.” But he questioned the legal reasoning supporting the amount. The NAL “fatally compromises our ability to impose a lawful forfeiture of more than $189,361 upon the carrier,” the Republican commissioner said. Lukas Nace's Russell Lukas, lead attorney for Network Services Solutions, said the company "has cooperated with the FCC in this investigation and looks forward to a full and complete review of the facts underlying the allegations."