The Federal Communications Commission intends to fine a Reno, Nev.-based reseller of telecommunications services and its founder/CEO $21.7 million for alleged violations involving the Universal Service Fund’s Rural Health Care Program.

According to the FCC, Network Services Solutions is being “charged with violating the program’s competitive bidding rules, using forged and false documents to seek funding from the program, and violating the federal wire fraud statute.”

The FCC alleges that the company violated the federal wire fraud statute and the commission’s rules by engaging in “systematic and egregious misconduct.”

As a result, the agency said it expects to order Network Services Solutions to refund $3.5 million in “improper payments that the company has received through the program, which provides discounts for telecommunications services to rural health care providers to help pay for modern telecommunications services.”

The USF Rural Health Care Program provides funding to eligible healthcare providers for telecommunications and broadband services. Congress in 1996 mandated that the FCC use the USF to provide support for both telecommunications and advanced telecom/information services for eligible providers in rural communities to enable telemedicine, transmit health records, and conduct other telehealth activities.

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The FCC noted that this is the agency’s first enforcement action involving the Rural Health Care Program, and the first time the commission has proposed a fine for wire fraud in connection with a Universal Service Fund Program.

Network Services Solutions has operations nationwide serving more than 500 clients in 39 states, according to the company’s website. In its announcement, the FCC said the alleged violations “occurred throughout the country, but were concentrated in the southeastern United States.”

“Forgery, bribery, bid rigging and fraud are absolutely unacceptable in any federal program,” said FCC’s Enforcement Bureau Chief Travis LeBlanc. “The commission calls on Network Services Solutions and its CEO to account for any misuse of federal funds in this vital program that assists rural communities with access to critical services for healthcare.”

Aimee McCarty, associate vice president of operations at Network Services Solutions, declined to comment on the FCC’s announcement. In response to a query, McCarty referred Health Data Management to the McLean, Va.-based law firm Lukas, Nace, Gutierrez & Sachs, which is representing the company.

“NSS has cooperated with the FCC in this investigation and looks forward to a full and complete review of the facts underlying the allegations,” said Russell D. Lukas, a partner in the law firm.

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