Florida CEO Gets 5 Years in Prison, $128M Fine In ‘Obama Phone’ Scam
The proprietor of a telecommunications firm in Florida has been sentenced to five years in prison after admitting to embezzling funds from a government initiative commonly referred to as the “Obama phone,” which offers affordable phone services to low-income individuals.
Q Link Wireless LLC, along with its 51-year-old Chief Executive Officer, Issa Asad, pleaded guilty last year to charges of conspiracy to commit wire fraud and misappropriate federal funds from the Lifeline program, as reported by the Department of Justice.
Initiated in 1985 and expanded during the Obama administration, the program provides subsidized mobile services to disadvantaged populations. It faced significant criticism during the 2012 election cycle when a viral video emerged featuring a woman in Cleveland claiming that she and her friends were given “Obama phones.”
According to Fox Business, some telecommunications companies with Lifeline contracts embraced the nickname, although the government did not share this sentiment.
Asad received a five-year prison sentence, and both he and the company were ordered to pay fines and restitution exceeding $128 million, as stated by the agency.
In a separate case, Asad admitted to money laundering related to a government credit program intended to assist struggling businesses during the COVID-19 pandemic.
Under the terms of the plea agreements, Asad and Q Link consented to pay approximately $110 million in restitution to the Federal Communications Commission. Additionally, Asad paid a criminal fine of nearly $17.5 million for profits obtained from Q Link’s phone service plan.
The Department of Justice indicated that this represents one of the largest financial penalties ever levied by the FCC in its history.
Furthermore, Asad remitted about $1.7 million to the Small Business Administration as restitution for laundering profits from loans obtained through the Paycheck Protection Program (PPP) during the pandemic.
According to the Department of Justice, he admitted to utilizing Paycheck Protection Program funds for constructing a house, making a payment for a Land Rover, covering expenses on his personal American Express card, paying property taxes, purchasing jewelry, and providing gifts for university purposes.
Asad and Q Link conceded in court to committing fraud against the Federal Communications Commission’s Lifeline program.
From 2012 to 2021, Asad and Q Link submitted false information regarding their Lifeline clients and filed numerous fraudulent claims for government reimbursement. They also acknowledged retaining Lifeline funds that they were not entitled to and deceived the FCC regarding the company’s adherence to program regulations.
As reported by the Miami Herald, Asad has a criminal record and was charged with murder in 2014 after he ran over a groundskeeper at his business due to a dispute over a $65 payment for lawn services.
He ultimately pleaded not guilty to the charge of misdemeanor culpable negligence and was sentenced to one year of probation along with a $225 fine.
“Issa Asad and his company, Q Link Wireless, intentionally defrauded two essential government programs designed to assist individuals and businesses in financial distress, unlawfully redirecting hundreds of millions of dollars for their personal gain, all while obstructing the government’s ability to support those who truly needed assistance,” stated U.S. Attorney Hayden P. O’Byrne for the Southern District of Florida. “These results highlight our commitment to ensuring that those who orchestrate corporate fraud schemes face personal repercussions.
“IRS Criminal Investigation special agents possess the unique capabilities required to trace the intricate financial paths left by criminals, and we are committed to ensuring accountability for those who commit crimes,” stated Executive Special Agent in Charge Kareem Carter of the Internal Revenue Service – Criminal Investigation (IRS-CI), Washington, D.C. Field Office. “This was a bold scheme of immense scale. Mr. Asad placed his own greed above all else, embezzling $100 million from taxpayers. The sentencing today conveys a strong message that our Global Illicit Financial Team, along with our law enforcement partners, remains alert and will actively pursue individuals who seek to profit through fraudulent activities.”
“Q Link and Asad misappropriated funds from a vital FCC program designed to assist low-income households,” remarked Inspector General Fara Damelin of the FCC, Office of Inspector General (FCC-OIG).
“This sentencing delivers a significant message that severe criminal misconduct against FCC programs will not be overlooked. The FCC OIG investigators, along with their law enforcement partners at DOJ, IRS, SIGPR, and USPIS, conducted an exemplary investigation, and we appreciate the support from the FCC. The FCC OIG is committed to eliminating waste, fraud, and abuse, and will persist in vigorously pursuing investigations against those who defraud FCC programs and exploit our most vulnerable communities,” Damelin concluded.