Florida CEO gets 5 years for stealing from Obama phone

A South Florida telecommunications CEO and his company have been ordered to pay more than $128 million in penalties after a years-long scheme to defraud a federal program, once unofficially dubbed “Obama phone,” that was intended to provide affordable phone service to low-income households. Knewz.com has learned that 51-year-old Issa Asad, CEO of Q Link Wireless, pleaded guilty to defrauding the Federal Communications Commission’s Lifeline program and laundering money from a separate COVID-19 relief fraud.

Scope of the Florida CEO’s fraudulent activities

Between 2012 and 2021, Q Link Wireless and Asad submitted false claims to the Federal Communications Commission’s Lifeline program to receive reimbursement for non-existent or inactive users, according to court records. The Lifeline program offers discounts on monthly cellphone and broadband services to eligible low-income consumers. To maintain these fraudulent claims, the company manufactured call data and initiated coercive robocalls including messages falsely warning customers that they would lose Medicaid, food stamps and Lifeline benefits unless they stayed enrolled. The scheme resulted in more than $109 million in restitution and forfeiture payments to the FCC, making it the largest criminal enforcement action in FCC history. According to prosecutors, when federal regulators began investigating, Asad and Q Link created and submitted false records to conceal the fraud. They never returned funds for inactive accounts and moved more than $50 million of Lifeline money to bank accounts in Jordan controlled by Asad and a family member, reports have mentioned.

The largest FCC fraud case in history

The case represents the largest criminal matter involving the FCC and the largest criminal plea deal ever secured in the Southern District of Florida. “Q Link and Asad stole funds from a key FCC program meant to serve low-income households. … This sentencing sends an important message that egregious criminal misconduct against FCC programs will not go unanswered,” said FCC Inspector General Fara Damelin. Acting Inspector in Charge Bladismir Rojo of the U.S. Postal Inspection Service added, “Issa Asad used the cover of a legitimate business to line his pockets at the expense of taxpayers and vulnerable communities.”

CEO also defrauded the Paycheck Protection Program

In addition to the Lifeline scheme, Asad defrauded the Paycheck Protection Program (PPP), which was created during the COVID-19 pandemic to help small businesses retain employees. Prosecutors said he falsely claimed Q Link’s revenue had been significantly reduced by the pandemic in order to secure forgivable loans. Instead of using the funds as intended, he used them for personal expenses including a Land Rover, credit card bills, property taxes, jewelry and home construction.

Asad was sentenced to five years in prison

The Florida CEO was sentenced to five years in federal prison for his crimes. Q Link agreed to pay more than $109 million in forfeiture, and both Asad and the company will pay more than $109.6 million in restitution to the FCC. Asad also paid $1.75 million in restitution to the U.S. Small Business Administration for the Paycheck Protection Program fraud, along with an additional $17.48 million forfeiture judgment. “This was a brazen scheme of staggering proportions. Mr. Asad prioritized his own greed, stealing $100 million from taxpayers. Today’s sentencing sends a clear message that our Global Illicit Financial Team and our law enforcement partners remain vigilant and will vigorously pursue those who attempt to enrich themselves through fraudulent means,” said Kareem Carter, Executive Special Agent in Charge of IRS Criminal Investigation. U.S. Attorney Hayden P. O’Byrne for the Southern District of Florida said the case shows that “those who mastermind corporate fraud schemes face personal consequences.”

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