Alaska-Based Company Pays U.S. More Than $1.5 Million
to Settle False Claims Allegations

WASHINGTON – General Communication Inc. (GCI) has paid $1,556,075 to settle allegations that Alaska DigiTel LLC, a former Alaska limited liability company now owned by GCI, submitted false claims to the Federal Communications Commission’s (FCC) Low Income Support Program, the Justice Department announced today.

The Low Income Support Program of the Universal Service Fund, which includes the Lifeline, LinkUp and Toll Limitation Services, was created by Congress in the Telecommunications Act of 1996 and is administered by the Universal Service Administrative Company for the FCC. Under the Low Income Support Program, eligible individuals may apply for free or discounted phone or wireless services. Reimbursement is paid directly to Eligible Telecommunications Carriers, such as Alaska DigiTel.

Today’s settlement resolves allegations that Alaska DigiTel violated the False Claims Act by submitting claims to the Low Income Support Program for improperly substantiated, duplicative, or otherwise ineligible subscribers for the period from Jan. 1, 2004, though Aug. 31, 2008.

“We simply won’t tolerate practices that misuse taxpayer dollars and undermine the integrity of important government programs aimed at helping the needy,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “By submitting false claims to the Low Income Support Program, Alaska DigiTel tried to take advantage of a program designed to help individuals who otherwise could not afford telephone service.”

The government’s investigation of Alaska DigiTel was initiated by a lawsuit filed under the False Claims Act’s qui tam or whistleblower provisions, which permit private parties to sue for false claims on behalf of the United States and to share in any recovery. The whistleblower in this case, who alleged that Alaska DigiTel was signing up subscribers who did not qualify for the program, will receive $260,274 from the settlement.

Assistant Attorney General West acknowledged the cooperation among the many government agencies participating in this ongoing matter, including the Justice Department’s Civil Division, the U.S. Attorney’s Office for Alaska, and the FCC’s Office of the Inspector General and Office of General Counsel. The case is United States ex rel. Napolean v. Alaska Digitel et al., No. 3:08CV66-JWS (D. Ak.)