Owner agrees to forfeit funds.
Wes Yui Chew, of Edmond, , and his company, ICON TELECOM, INC., also of Edmond, has pleaded guilty to money laundering and making a false statement to the Federal Communications Commission, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. Chew and Icon have also agreed that the United States will keep more than $27 million seized during the investigation.
The current Lifeline Program, which was created in 1985, furthers the FCC’s mission to provide all Americans with access to a basic level of telephone service. Since 2005, Lifeline has provided subsidies to participating telephone companies not only for landline service, but also for wireless service for qualifying low-income customers. The Universal Service Administrative Company (“USAC”) administers the Lifeline Program on behalf of the FCC and under detailed federal regulations. To pay for the program, USAC collects fees from telephone companies, which often pass the fees on to customers as “universal service charges” on monthly telephone bills.
Most participating wireless telephone companies receive a subsidy of $9.25 per month for each qualifying low-income customer. If a qualifying customer lives on “Tribal Lands,” however, the company receives $34.25 per customer. Much of Oklahoma includes Tribal Lands that qualify for the higher monthly subsidy.
Before receiving reimbursement, participating telephone companies file forms with the FCC that report the number of Lifeline eligible customers they have served. Companies must also file annual reports by January 31 to certify that customers who received Lifeline service at an earlier date remain eligible for the program.
Icon Telecom, owned exclusively by Chew, participated in the wireless Lifeline Program from July 2011 until September 2013. An information filed on June 3, 2014, alleges that in September 2011, Icon reported fewer than 2,200 wireless customers who qualified for the Lifeline program. By November 2012, that number had grown to 135,364. The information explains that although it had fewer than ten full-time employees, Icon received a total of $58,283,329 through the Lifeline Program during 2011, 2012, and 2013.
Chew pled guilty to Count 1, which charges him with money laundering for his transfer of $20,455,829.10 on April 9, 2013, from an Icon account to a personal account. He admitted that when he made that transfer, he knew that Icon had tens of thousands fewer customers than it had reported to the FCC for the first three months of 2013.
As the sole owner of Icon, Chew also entered a guilty to plea on behalf of the company to Count 2, which charges that Icon knowingly made a false statement to the FCC on May 13, 2013. Chew admitted that in response to a USAC audit request, Icon intentionally fabricated 58 customer recertification forms, which included fictitious signatures.
The information seeks forfeiture of $20,542,740.73, which the United States seized on Oct. 4, 2013, from a personal account at Ally Bank that belonged to Chew. Both Chew and Icon have agreed not to contest the forfeiture of this money. They have also agreed not to contest the forfeiture of $6,485,933.82 seized on Oct. 7, 2013, from two Icon accounts at BancFirst.
In addition to the forfeiture, Chew faces up to 10 years in prison and a fine of $250,000 or twice the amount of the criminally derived property involved in the transfer, whichever is greater. Icon faces a potential fine of $500,000.
The case against Chew and Icon are related to charges against Oscar Enrique Perez-Zumaeta, who faces a ten-count indictment filed on June 3, 2014. According to that indictment, Perez-Zumaeta used his company, PSPS Sales, to assist Chew and Icon in defrauding the FCC. Perez-Zumaeta has entered a plea of not guilty to all counts. His trial is scheduled for August 12, 2014. The public is reminded that Perez-Zumaeta is presumed innocent unless and until proven guilty.
This case is the result of an investigation by the Office of Inspector General for the Federal Communications Commission; the Federal Bureau of Investigation; and the Internal Revenue Service Criminal Investigation. It is being prosecuted by Assistant U.S. Attorneys Chris M. Stephens and Scott E. Williams.