Butler County internet company to pay $6.5M to settle False Claims Act allegations

An internet company based in Butler County has agreed to pay $6.5 million to resolve allegations that it violated the False Claims Act by knowingly violating Federal Communications Commission (FCC) rules.

Armstrong Group was accused of violating the rules governing the agency’s High-Cost Program and submitting improper costs in order to inflate the subsidies it received from the federal Universal Service Fund (USF).

“Telecommunications providers that seek to participate in important FCC programs like the High-Cost Program must comply with applicable rules, including those governing how they report the costs used to calculate their subsidies,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement demonstrates our continuing commitment to protect the integrity of the FCC’s operations and services.”

The FCC established the USF to help ensure that all people in the United States have access to rapid, efficient, nationwide communications service with adequate facilities at reasonable charges.

“In the digital age, it is critical for everyone, everywhere to have access to reliable, high-speed broadband, including in rural and underserved areas. That is why we are laser-focused on pursuing waste, fraud, and abuse in these critical programs and ensuring that available funds flow to companies that play by the rules,” said General Counsel Michele Ellison for the FCC. “I applaud the continuing collaboration among the Office of General Counsel, the Office of the Inspector General, and the U.S. Department of Justice toward this important objective.”

Between 2008 and 2023, Armstrong Group allegedly failed to comply with FCC regulations that governed what costs they were allowed to report for purposes of claiming subsidy payments from the government, and as a result received greater subsidy payments than those to which they were entitled, the Department of Justice said.

“When providers like the Armstrong Group fail to follow federal law and FCC regulations, they jeopardize not only critical government programs but also consumers’ ability to access a modern lifeline — rapid, reliable, and efficient telecommunications services,” said U.S.  Attorney Eric G. Olshan for the Western District of Pennsylvania. “Today’s settlement demonstrates our office’s dedication to ensuring the business community plays fairly, particularly with respect to public funds, and further assures our rural neighbors throughout the district that we will work vigorously to protect their access to essential services that many people take for granted.”

In addition to the civil settlement, Armstrong Group has entered into a robust corporate compliance agreement with the FCC, requiring Armstrong to adopt concrete changes in the company’s internal controls and implement comprehensive oversight and monitoring mechanisms.

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