Wednesday, January 26, 2005

Mail/Wire Fraud Charges Involving Federal Rural Telephone Subsidies

The U.S Attorney's Office for the Western District of Missouri (Kansas City) announced the indictment of Richard and Daniel Martino, the controlling shareholders Cass Country Telephone Co., a rural communications provider that is eligible to receive subsidies from the federal government for providing service (it's the Universal Service Fee on your telephone bill).  The eleven-count indictment (here) charges conspiracy, mail and wire fraud related to inflated billings.  A press release by the USAO states:

Count One of the federal indictment alleges that the Martinos participated in a conspiracy from January 1998 to July 2004 to defraud the Universal Service Administrative Company (USAC), which disperses federal subsidies to rural telephone companies, and the National Exchange Carriers Association (NECA), which handles tariff filings and revenue distribution among carriers. The Martinos, along with Kenneth M. Matzdorff, 48, of Belton, Mo., allegedly inflated expenses of the Cass County Telephone Comany, LP (known as CassTel) in order to qualify for $8.9 million in unwarranted subsidies and disbursements.

(ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2005/01/mailwire_fraud_.html

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