‘Obama phone’ fraud targeted by Administration

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The Justice Department charged a trio of men with defrauding the so-called Obamaphone program of $32 million in a scam that allegedly featured a jet, a Lamborghini and a yacht called Knight Crew.

Thomas Biddix, Kevin Brian Cox and Leonard Solt were charged in a Florida court with one count of conspiracy to commit wire fraud and 15 counts of wire fraud, false claims and money laundering for bilking the phone subsidy program for the poor, which is officially known as Lifeline and managed by the Federal Communications Commission.

The indictment -- the result of an investigation by the FBI, the FCC inspector general and the Internal Revenue Service -- represents another effort by the Obama Administration to crack down on abuses of the controversial program. Republicans in Congress, as well as some Democrats, have criticized Lifeline for poor management and misuse. The program has been dubbed Obamaphone by critics, even though it dates back to Ronald Reagan’s presidency.

Biddix, Cox and Solt allegedly oversaw the submission of falsely inflated claims to Lifeline from September 2009 to March 2011 that diverted $32 million in fraudulent funds to a company called Associated Telecommunications Management Services. Biddix is the chairman of ATMS, according to DOJ.

‘Obama phone’ fraud targeted by Administration