Phony Claims of|$27 Million = 4 Years

OKLAHOMA CITY (CN) – An Oklahoma man was sentenced Thursday to four years in federal prison for making $27 million in phony claims under the federal Lifeline wireless subsidy program.
     Wes Yui Chew, of Edmond, was also fined $117,000.
     Chew and his company, Icon Telecom, will not contest the forfeiture of $27 million seized from their accounts during the federal investigation.
     Chew pleaded guilty to money laundering in June 2014 relating to a $20 million transfer from Icon. He pleaded guilty on behalf of Icon to knowingly making a false statement to the Federal Communications Commission.
     Chew faced up to 10 years in federal prison and $250,000 in fines.
     Icon participated in the Lifeline program from July 2011 until September 2013. It provides subsidies for telephone service for low-income people.
     Wireless telephone companies usually receive a subsidy of $9.25 per month per qualifying customer, unless they live on tribal land. In that case, they receive $34.25 per month for each customer. Prosecutors said much of Oklahoma qualifies for the higher subsidy.
     “An information filed on June 3, 2014, alleged that in September 2011, Icon reported fewer than 2,200 wireless customers who qualified for the Lifeline program,” prosecutors said in a statement Thursday. “By November 2012, that number had grown to 135,364 . The information explains that although it had fewer than 10 full-time employees, Icon received a total of $58,283,329 through the Lifeline Program during 2011, 2012, and 2013.”
     Oscar Perez-Zumaeta, of Cancun, Mexico, is awaiting sentencing for defrauding the Universal Service Administrative Co., the independent administrator of Lifeline. He pleaded guilty to money laundering in November 2014.
     Prosecutors said Icon paid more than $1 million to Perez-Zumaeta’s company, PSPS Sales, from December 2011 through April 2013.
     “Perez-Zumaeta is charged with directing PSPS Sales workers to enroll fictitious customers for Icon by using phone book listings and forging Lifeline application forms,” prosecutors said. “He also allegedly directed workers in Mexico to falsify approximately 40,000 Lifeline recertification forms for use in Icon’s fraudulent scheme.”
     According to his indictment, Perez-Zumaeta told employees to go through phone books to come up with names and addresses for bogus Lifeline customers, then get rid of the phones by selling them on the street for $5 each.
     Perez-Zumaeta faces up to 10 years in prison and a fine of up to $250,000.

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