Frontier Communications has grown from a sleepy rural telecommunications carrier to the 4th largest provider of digital subscriber services. Now offering traditional phone service, Internet and digital TV, the company has a presence all over the United States. In West Virginia, a competitor has brought a federal whistleblower lawsuit claiming that a Frontier subsidiary has ripped off taxpayers and the government. Competitor Citynet claims that Frontier West Virginia LLC has defrauded the government’s Broadband Technology Opportunity Program (also known as “BTOP”).
BTOP was part of President Obama’s economic stimulus program in 2010. Administered by the U.S. Department of Commerce, the program set $4.7 billion in federal funds to expand broadband service within the United States. Much of the money was earmarked for rural areas such as West Virginia.
The official goal of the program is to create local jobs and expand broadband access in rural areas of the country. Rather than use government employees to build fiber networks, the Commerce Department works with states and local governments and provides grant monies to build the nation’s broadband network.
In West Virginia, the complaint claims that Frontier worked with the West Virginia Executive Office to receive a federal grant of $126.3 million. Much of that grant money then went to Frontier West Virginia.
According to the grant applications, Frontier was to build hundreds of miles of so-called “middle mile” fiber. Middle mile means that the lines were designed to link “anchor institutions” such as schools and hospitals. Local companies and competitors could then access the middle mile lines and build “last mile” lines to rural customers.
Instead of building the middle mile lines as promised, the whistleblower lawsuit claims that Frontier used the grant money to build more lucrative last mile lines. The complaint also claims that the company build less than half the lines it had promised.
If that isn’t enough, the complaint also says that Frontier’s fraud included “the payment of 365 Frontier invoices that included prohibited Indirect Costs and 327 invoices that included unlawful facility build out fees.” The company is also accused of lying about the number of miles and fiber strands used.*
False Claims Act, Whistleblower Awards and Grant Monies
Defrauding the government is a huge problem in the United States. Since the U.S. first became a country in 1776, Congress has grappled with how to combat fraud. One of the most successful tools in the government’s arsenal is the federal False Claims Act, a law that dates back to the U.S. Civil War.
Under the False Claims Act (also called a Qui Tam lawsuit), a whistleblower can file a lawsuit in the name of the United States. If either the whistleblower’s lawyer or the government succeeds in collecting any money, the whistleblower can earn an award of up to 30% of what the government collects. The law allows triple damages and huge penalties making it possible for awards to quickly become huge.
To qualify for an award, one must have original source or “inside” information.
The information possessed by the whistleblower must also go to fraud involving federal funds or a federal program. Because the West Virginia grant monies came from the Department of Commerce, information about misuse of those monies qualifies for an award.
Anyone having information about misuse of government grants may have a good claim and could be eligible for an award. It is best to act quickly, however, since the awards generally goes to the first to file.
Much of the $4.7 billion of BTOP monies went to private companies. Some of it was paid directly while other monies were paid to a state or university and later offered as subgrants to private companies. A full list of the awards is available on the BTOP awards page.
The False Claims Act covers far more than BTOP grants. Any federal grant program or any expenditure of tax dollars is probably covered. Over half the states have their own False Claims Act laws that often cover state and local grants as well. (Many state laws are limited to Medicaid but if a state grant relies on federal money, such as the case in West Virginia involving Frontier, it is often possible to still get an award.)
We believe that whistleblowers are the new American heroes. They save taxpayers billions of dollars each year. In recognition of the courage they exhibit by standing up and reporting fraud, the federal government paid out over $435 million in awards in 2014. This doesn’t include the millions more paid out by the states.
If you are interested in becoming a whistleblower, call us. We love whistleblowers and helping them stand up and fight back against greed, corruption and waste. Our mission is simple, we help you put an end to the fraud, we protect you from retaliation and we help you collect the maximum award possible. Any you never have to pay us unless we are successful. No money up front, no money if we aren’t successful.
Want more information? Give us a call or download our 11 step guide to blowing the whistle. To talk with a whistleblower lawyer directly, contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct). All inquiries are protected by the attorney – client privilege and kept completely confidential.
MahanyLaw – America’s Whistleblower Lawyers
*As of the date of publication, the lawsuit has just been unsealed and Frontier has not been found guilty of any wrongdoing.