TracFone, the parent company of Safelink Phones is suing three marketing companies and the software company hired to provide free government phones to Florida residents under the federal Lifeline program.
The lawsuits allege at least 350,000 ineligible state residents received free phones because of a verification application” design flaw that the companies allegedly used to trick the system and charge fees for the completed applications.
TracFone claims the so called “Street Team App” was updated to meet FCC protocol changes in 2012.
The applications were taken using tablets.
The new standards “required that an applicant either submit written proof of eligibility or to match eligibility with applicable state data bases.”
TracFone says that software update created a glitch that allowed the companies to walk away with
anywhere from $1 million to $350 million.
According to the lawsuit the new software was installed by VMBC, Voice and Mobile Broadcast Corp.
The company says it became aware of the issue July 2015 the same month News 6 broke the story.
The lawsuits come following a series of News 6 investigations that found free phones had been issued to Central Florida veterans and law enforcement officers who were never eligible to receive the phones in the first place.
An email obtained by News 6, directed “Street Team” members of Elite marketing to offer the phones to veterans with little in the way of explanation.
The email read in part: “Do not over talk. The more words that come out of your mouth the greater the chance that they will ask even more questions.”
TracFone is seeking jury trials against Elite Marketing, Urge, U.S. Connection and VMBC Voice and Mobile Broadcast Corp.
In each action TracFone is seeking damages “in excess of $75 thousand dollars” but sources familiar with the case say we may be looking at millions of dollars.
The lawsuit against Elite Marketing claims employees completed 80,000 “ineligible” applications that were approved because of the software flaw.
Washington attorney Barry Boss considered one of the top white-collar crime attorneys in the country, is representing Elite in this case. In an email to News 6 Boss writes:
"We are still investigating the allegations made by TracFone, but it should be noted that at no point was Elite responsible for approving applications or for the software used to approve applications."
The lawsuits filed Feb. 26, suggest TracFone believed the approved applications had gone through the proper screening process.
The FBI interviewed former Elite employees following the News 6 investigation last summer.
It is believed the government may be preparing some sort of action in the case but it’s not clear who will be linked to the alleged scheme or how far up it really goes.