An Edmond businessman and his associate face federal charges for money laundering and conspiracy to defraud the government.
The Department of Justice released a 20-page indictment, Wednesday, detailing the allegations Wesley Chew, Icon Telecom Inc. and a Mexican national, Oscar Enrique Perez-Zumaeta, all were charged in federal court in Oklahoma City.
As 9 Investigates first uncovered in 2013, Oklahoma-based cell phone company, Icon Telecom or Icon Wireless, is accused of abusing the government-subsidized cell phone program, Lifeline.
The program is designed to provide free cell phones to low-income customers. The federal government reimburses approved cell phone companies up to $34.25 a month for every person it signs up for the program.
In a two-year time span, Icon allegedly reported to the feds an unprecedented amount of customers, 135,364 subscribers.
In exchange, Icon received more than $58 million in government subsidies.
The federal indictment outlines the alleged scheme by Chew and Perez-Zumaeta, where Chew allegedly paid Perez-Zumaeta more than a million dollars to recruit new customers for Icon.
"They exploited the program by signing up fictitious people, literally pulled names out of the phone book to present to the FCC [Federal Communications Commission]," United States Attorney for the Western District of Oklahoma Sanford Coats said.
For every bogus customer, Icon allegedly collected unwarranted reimbursements from the government and then sold the phones on the street for $5 each.
Coats said it was a conspiracy to defraud the government. He said the investigation alleges the two men did everything they could to hide the illegal activities.
"Chew, Icon and employees created fictitious documents and submitted them to the Lifeline program to cover their tracks," Coats said.
Chew has been federally charged with money laundering. Icon Telecom, Inc. is charged with making false statements to USAC auditors.
"Mr. Chew and his company voluntarily refunded over $5.7 million to the Lifeline program and have been cooperating with the investigation for almost a year," Dan Webber, counsel for Chew and Icon Telecom, Inc., broke a year of silence in responding to the allegation. "He wants to make appropriate amends and put this matter behind him."
If convicted, Chew could face up to 10 years in prison and be fined $250,000.
Also, Perez-Zumaeta was charged in a 10-count indictment with conspiracy, wire fraud and money laundering.
Perez-Zumaeta could face up to 20 years in prison and nearly $2 million in fines.