FCC Proposes a $220,000 Fine for Apparent Wire Fraud in the Emergency Broadband Benefit Program

The FCC proposes a forfeiture of $220,210 against Kyle Traxler and Cleo Communications for apparently willfully and repeatedly engaging in conduct that violated the federal wire fraud statute and the FCC’s rules between on or about May 14, 2021 and on or about August 11, 2021. Cleo made apparent misrepresentations to gain FCC authorization to be a participating provider in the Emergency Broadband Benefit (EBB) Program and then apparently used that authorization to defraud consumers using interstate wires. While Cleo never filed for or received disbursements from the EBB Program, Cleo promised consumers that they would receive EBB Program-discounted broadband services and devices in exchange for online electronic payments to Cleo, but the company never delivered the broadband services or devices. Cleo’s schemes to defraud consumers under the pretense of participating in the EBB Program caused severe harm not only in monetary terms to the low-income consumers it preyed upon, but also to the trust and goodwill this or any program needs to achieve its purposes effectively. We find that the proposed $220,210 forfeiture penalty, the statutory maximum we can impose, reflects the scope, duration, seriousness, and egregiousness of Cleo’s apparent violations. We also find that Kyle Traxler and Cleo Communications are, for legal purposes, one and the same entity, and are therefore jointly and severally liable for the proposed penalty.