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TheStreet Open House

Fraudulent Signatures Discovered On Lifeline Phone Applications

Stocks in this article: SSP

WASHINGTON, Sept. 16, 2013 /PRNewswire/ -- For millions of low-income families, the federal government's Lifeline program offers affordable phone service. But a Scripps News investigation has uncovered people across the country whose signatures appeared on applications for phones and phone service without their knowledge. The fraudulent applications were for two phone companies participating in Lifeline: Oklahoma City-based TerraCom Inc. and its affiliate, YourTel America Inc.

Darryl Nelson of San Antonio, Texas, has never even heard of TerraCom. But there was his home address, his Social Security number and his signature on the bottom of a TerraCom Lifeline application-- misspelled and in someone else's handwriting.

"This is crazy," said Nelson, 51. "This is wrong."

Nelson was among 50 people in four states discovered by Scripps who had applications submitted in their names without their knowledge.

Former contract agents who worked for TerraCom and Yourtel told Scripps they forged application signatures, manufactured addresses and retained legitimate applicants' Social Security numbers and other personal information.

"It's about speed, quickness, money," said Reginald Strode, a former YourTel contract agent in suburban St. Louis. Strode said he questioned a team leader about having to sign others' names. "I was told, 'Don't worry about it. Just do it so it can get done.'"

Questions about TerraCom-YourTel's business practices have led to investigations in Illinois, Indiana, Oklahoma and Texas. And in July, TerraCom began terminating all 700 Lifeline sales staffers out of concern that rogue agents were breaking program rules.

Dale Schmick, chief operating officer for both companies, said he was unfamiliar with the forged applications. TerraCom and YourTel didn't conduct criminal background checks on sales agents, and Schmick said he didn't know if they were forbidden from simultaneously working for competing Lifeline providers.

Federal regulations do not specify how participating companies must vet and oversee Lifeline agents.

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