Saturday, April 12, 2014

Florida Men Charged With $32 Million 'Obama Phone' Fraud


 
TAMPA, Florida —Three men 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 F.B.I., U.S. Department of Justice, I.R.S., and F.C.C.  announced last 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 on April 10 in federal court in Tampa, Florida.


The indictment charges the three men 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.


The indictment also 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.


Federal authorities allege in the indictment that the men 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.
 


Another Black Eye for Brevard County

Biddix is also alleged to have used the Lifeline government subsidy to pay a portion of salaries for employees of another company, Telecom Sevice Center (TSC) of Rockledge, Florida, that temporarily had over 90% of those wages paid by Brevard Workforce through an Obama administration federal grant known as "Florida Back To Work" at the height of the recession. 


Allegedly, Biddix was prohibited from using federal money from the Lifeline program for TSC's remaining portion of those salaries subsidized by another government program.


Although publicly available information in early 2010 showed that ATMS was already under investigation for "atypical monthly growth in the amount of Lifeline disbursements received by ATMS companies" by the Florida Public Service Commission, the Economic Development Commission of Florida's Space Coast (EDC) and Brevard Workforce pushed through the "Florida Back To Work" grant money for TSC later that year.  EDC records show that Biddix was an EDC Board Member during that time and also belonged to the EDC Executive Committee.


"This is just one more great example of how collective efforts can bring employment prospects and economic diversity to the Space Coast through the partnership of our community leaders and the Economic Development Commission,”  said Brevard County Commissioner Mary Bolin in a September 2010 EDC press release about the TSC taxpayer subsidy.


Brevard Workforce, the organization that administered the grant to TSC, remains under investigation since 2011 by the U.S. Department of Labor for possible cronyism involving the award of federal grant contracts to companies connected with Brevard Workforce board members.  EDC President and CEO Lynda Weatherman, Brevard County Deputy Manager Stockton Whitten,  and Brevard Public School Superintendent Dr. Brian Bingelli are among Brevard Workforce's Board of Directors.


Biddix is the second corporate officer in less than a year that has been brought up on criminal charges related to a company lured to Brevard County by the EDC with taxpayer dollars.  Last August, BlueWare CEO Rose Harr turned herself in on an outstanding warrant in connection with bribery charges related to a multimillion dollar scanning contract involving former Brevard County Clerk of Court Mitch Needelman.


Brevard Times sought statements from both the EDC and Brevard Workforce regarding their involvement with the companies named in the federal criminal case.  Neither have responded as of the time of this publication.


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