Florida CEO gets 5 years in prison, $128M fine in 'Obama phone' scam
The owner of a Florida telecommunications firm was sentenced to five years in prison after pleading guilty to stealing from the federal program once unoffcially dubbed "Obama phone" that provides discounted phone services to low-income customers.
Q Link Wireless LLC and its 51-year-old CEO Issa Asad both pleaded guilty last year to conspiring to commit wire fraud and to steal government money from the Lifeline program, the Department of Justice announced. The program, begun in 1985 and expanded under Obama, provides subsidized cellphone services to the poor. It was heavily criticized during the 2012 election, when a viral video emerged featuring a woman in Cleveland claiming she and all her friends were given "Obama phones." Some telecommunications companies with LIfeline contracts embraced the term, although the government did not.
Asad was sentenced to five years in prison and both he and the company were ordered to pay financial penalties and restitution totaling more than $128 million, according to the agency.
Separately, Asad pleaded guilty to laundering from a government loan program meant to support struggling businesses during the COVID-19 pandemic.
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Under the plea deals, Asad and Q Link agreed to pay nearly $110 million in restitution to the Federal Communications Commission. Asad also paid a criminal penalty of nearly $17.5 million for income received from Q Link’s phone services scheme.
This was one of the largest financial penalties in the FCC's history, according to the DOJ.
Asad also paid more than $1.7 million in restitution to the Small Business Administration for laundering loan proceeds that his company received from the Paycheck Protection Program (PPP) during the pandemic.
The DOJ said he admitted to using PPP money for construction on his home, a Land Rover payment, his personal American Express card, property taxes, jewelry and donations to a university.
Asad and Q Link admitted in court to a scheme to defraud the FCC’s Lifeline program.
The scheme involving Asad took place between 2012 and 2021 when Asad and Q Link provided false information about their Lifeline customers and made repeated false claims for government reimbursement. They also confessed to retaining Lifeline funds that they were not entitled to receive and deceiving the FCC about the company’s compliance with program rules.
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Asad has a criminal history and was charged with murder in 2014 in connection with driving over a groundskeeper at his business after a dispute over paying $65 for lawn services, according to the Miami Herald.
He later pleaded no contest to misdemeanor culpable negligence and was slapped with one year of probation and ordered to pay a $225 fine.