The proprietor of a telecommunications firm in Florida has been sentenced to five years in prison after admitting guilt in a case involving the embezzlement of 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.
The program was expanded by Obama in 1985 to provide 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 matter, 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 offerings.
The Department of Justice indicated that this fine represents one of the largest financial penalties ever levied by the FCC.
Furthermore, Asad paid around $1.7 million in restitution to the Small Business Administration for laundering profits from loans obtained through the Paycheck Protection Program (PPP) during the pandemic.
The DOJ reported that he admitted to utilizing PPP funds for various personal expenses, including home construction, a Land Rover payment, charges on his personal American Express card, property taxes, jewelry purchases, and gifts for a university.
In court, Asad and Q Link acknowledged their involvement in defrauding the FCC’s Lifeline program.
Asad has a criminal record and was accused of murder in 2014 after he ran over a groundskeeper at his business due to a disagreement regarding a $65 payment for lawn services.
He ultimately entered a plea of not guilty to the charge of misdemeanor culpable negligence, resulting in a one-year probation sentence and a $225 fine.
“Issa Asad and his company, Q Link Wireless, intentionally defrauded two essential government programs designed to assist individuals and businesses facing economic hardship, unlawfully redirecting hundreds of millions of dollars for their personal gain, while obstructing the government’s ability to aid those who truly needed assistance,” remarked 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.”
“Special agents from IRS Criminal Investigation are uniquely trained to trace the intricate financial paths left by criminals, and we are committed to holding accountable those who commit such 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 an audacious scheme of immense scale. Mr. Asad prioritized his own avarice, embezzling $100 million from taxpayers. Today’s sentencing conveys a strong message that our Global Illicit Financial Team and our law enforcement partners remain alert and will vigorously pursue individuals who seek to profit through fraudulent activities.”
“Q Link and Asad misappropriated funds from a crucial FCC program intended to assist low-income families,” commented Inspector General Fara Damelin of the FCC, Office of Inspector General (FCC-OIG).
“This sentencing conveys a significant message that severe criminal misconduct targeting FCC programs will not be overlooked. The FCC OIG investigators, along with their law enforcement collaborators at DOJ, IRS, SIGPR, and USPIS, conducted an exemplary investigation, and we express our gratitude to the FCC for its support. The FCC OIG is committed to eliminating waste, fraud, and abuse, and will persist in rigorously pursuing investigations against those who defraud FCC programs and exploit our most vulnerable communities,” Damelin remarked.