Jeffrey A. Newman
The United States Supreme Judicial Court has issued a decision this morning which says that the Federal Communications Commissio’s E-rate program reimbursements are “claims” under the False Claims Act. Whistleblower Todd Heath alleged that Wisconsin Bell overcharged schools and libraries for services under E-Rate, resulting in a false reimbursement claim against the $9 billion Universal Services Fund. The fund was set up to help expand telecommunications services to rural and low-income communities.
Wisconsin Bell tried to argue that the entity set up to administer the fund—the Universal Service Administrative Company—is a private, not-for-profit corporation and not a government agency. However, the Court disagreed. Here is a quote from the Court in this case:
“Wisconsin Bell argues that even the $100 million was provided only
by the carriers, with the Government playing no more than an intermediary role. But to start with, Wisconsin Bell mischaracterizes theGovernment’s role. Rather than acting as a passive throughway for
the transmission of the $100 million, it generated that money itself by
extracting it from carriers and by prosecuting wrongdoing in the ERate program. And anyway, a simple intermediary can sometimes also“provide” things to a recipient—and the Government, even if viewed
only in that light, would do so here. For example, a proctor for an exam
“provides” blue books and pencils to students, even if she has not purchased them herself and has instead gotten them from the school. The same is true here: The Government “provided” the relevant $100 million to the Fund by collecting it and routing it through Treasury accounts…”
The case is Wisconsin Bell, Inc. v. United States, ex rel. Todd Heath, U.S., No. 23-1127. Here is the case decision: https://www.supremecourt.gov/opinions/24pdf/23-1127_k53l.pdf
Jeff Newman JD MBA, represents whistleblowers nationwide relating to customs and tariff fraud concerning imported Chinese goods as well as corporate whistleblowers in major claims under the False Claims Act (Qui Tam), and SEC, IRS and FINCEN whistleblower programs. He can be reached at Jeff@JeffNewmanLaw.com or at 617-823-3217
