FCC Proposes $4.4 Million Fine Against Boomerang Wireless Over Deceased Lifeline Subscribers

Key Takeaways

• $4.4 Million Proposed Fine: The FCC has proposed a $4,401,666 penalty against Boomerang Wireless for allegedly enrolling hundreds of deceased individuals in Lifeline, submitting reimbursement requests and committing apparent wire fraud violations.
• False California Addresses: Investigators allege that Boomerang manipulated deceased individuals' enrollment records using addresses unrelated to where they lived before their deaths.
• Nearly $5 Million in Federal Payments: A broader FCC Inspector General review identified nearly $5 million in payments associated with deceased Lifeline subscribers across three states, with California accounting for nearly 81% of the incidents.
• California Loses Verification Exemption: The FCC revoked California's exemption from the National Verifier, requiring applicants in the state to undergo the federal eligibility-verification process.
• Enforcement Action Remains Pending: Boomerang can contest the allegations, and the FCC must review its response before determining whether to impose a final penalty.

Deep Dive

The addresses were in California. The people assigned to them were dead, and according to federal investigators, none had lived at those addresses before their deaths. The Federal Communications Commission said that Boomerang Wireless apparently used the false addresses to enroll hundreds of deceased individuals in Lifeline, a federal program that subsidizes phone and internet service for low-income Americans. The agency proposed a $4,401,666 fine against the company, citing the enrollments, reimbursement requests and apparent wire fraud violations.

The allegations emerged from an investigation by the FCC's Enforcement Bureau following an advisory from the agency's Office of Inspector General. They form part of a wider examination of Lifeline payments that has identified nearly $5 million in federal funding associated with deceased subscribers across three states.

Lifeline spends nearly $1 billion annually through the Universal Service Fund. Its subsidies are intended for qualifying low-income households, but investigators have found that providers received payments associated with people who were no longer alive.

In Boomerang's case, the FCC alleges that the company went further than maintaining outdated subscriber records. Investigators found that it apparently manipulated the records of deceased individuals to enroll them in California, assigning addresses unrelated to where they had lived.

The Commission has not disclosed how much Boomerang received through the disputed enrollments or how long the alleged activity continued. Its October 29 announcement also does not identify the individuals responsible for altering the records.

The proposed fine is not a final determination of wrongdoing. Boomerang can contest the allegations before the FCC decides whether to impose a penalty.

California Accounts for Most Cases

The investigation grew out of concerns about how Lifeline eligibility was being verified in states that had opted out of the National Verifier, the federal system used to determine whether applicants qualify for the program.

The FCC's Inspector General examined three such states and found that Lifeline providers had received nearly $5 million in federal payments associated with hundreds of thousands of deceased subscribers. Nearly 81% of the incidents occurred in California. The FCC has since revoked California's exemption from the National Verifier, ending the state's ability to operate outside that federal verification system.

The findings raise separate concerns about the accuracy of subscriber records and the conduct of providers seeking reimbursement. The Inspector General's broader review identified payments associated with deceased people, while the allegations against Boomerang specifically involve the apparent manipulation of enrollment information.

The FCC has not attributed the full $5 million identified in the three-state review to Boomerang. Nor does its announcement establish that all the cases uncovered by the Inspector General involved deliberate fraud.

Earlier this year, the Commission adopted reforms intended to restrict Lifeline participation to living individuals who meet the program's eligibility requirements, including lawful-status requirements. The Enforcement Bureau has also investigated other providers following the Inspector General's advisory, producing another recently proposed fine.

The California findings have already led to a change in the state's verification arrangements. Whether the allegations against Boomerang will result in a financial penalty remains unresolved.

FCC Expands Oversight of Subsidy Programs

The Lifeline investigations are proceeding alongside a broader FCC review of federal telecommunications funding. The agency has launched an examination of E-Rate, which subsidizes telecommunications and internet connectivity for eligible schools and libraries. Its proposals include stronger oversight of consultants, changes to administrative procedures and the elimination of certain rules associated with the pandemic-era Emergency Connectivity Fund.

The FCC also recently barred seven convicted individuals from participating in E-Rate and adopted rules intended to improve its ability to remove disqualified participants from federal programs.

The agency's response to suspected misuse of subsidy funding extends across its investigative and policymaking offices. The Enforcement Bureau handles investigations, the Office of Inspector General examines suspected fraud and abuse, and the Wireline Competition Bureau develops rules governing program administration.

For Boomerang, the next stage is a formal response to the allegations. The FCC's Notice of Apparent Liability for Forfeiture sets out the alleged violations and the proposed financial penalty. It does not establish liability, and the Commission must consider the company's evidence and legal arguments before making a final decision.

The agency cannot impose a forfeiture greater than the $4,401,666 proposed in this case. California's exemption from the National Verifier has already been revoked, but the enforcement proceeding against Boomerang remains open. The Commission must now determine whether the evidence supports the violations alleged in its notice and what penalty, if any, should follow.

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