California’s Massive Ghost Fraud

FCC uncovers nearly $5 million in taxpayer funds wasted on phone subsidies for over 116,000 dead people, with California responsible for 80% of the fraud due to its rejected federal safeguards.

Story Highlights

FCC OIG reveals $5 million paid to 117,000 deceased subscribers from 2020-2025, plus $5.5 million in duplicates, mostly in opt-out states like California.
California’s state-run verification failed spectacularly, hosting 80-81% of fraud despite claims of oversight, until federal override in November 2025.
Chairman Brendan Carr drives reforms via NPRM to limit Lifeline to living, lawful U.S. citizens or qualified aliens, ending state opt-outs and probing providers.
Taxpayers foot the bill through mandatory phone surcharges on a $1 billion annual program meant for low-income Americans, not ghosts or non-citizens.

FCC Exposes Massive Lifeline Fraud

FCC Office of Inspector General released a January 26, 2026, advisory detailing $5 million disbursed to over 116,000 deceased individuals in the Lifeline program from 2020 to 2025. An additional $5.5 million went to duplicate enrollments. The program, funded by phone bill surcharges, totals $1 billion annually for low-income subsidies. Over 80% of this fraud occurred in California, Texas, and Oregon, states that opted out of federal death verification processes. This waste demands immediate federal intervention to protect taxpayer dollars.

California’s Failed Oversight at the Center

California Public Utilities Commission administered its own Lifeline verification, opting out of federal “death checks” implemented after a 2017 OIG report. Despite this, 80-81% of fraudulent payments to dead subscribers happened there, including 16,774 enrolled after death. Federal action forced California to adopt national processes in November 2025, with full opt-out revocation by early February 2026. FCC launched investigations into suspect providers on February 16-17, highlighting state mismanagement that burdened all Americans with higher surcharges.

Chairman Carr’s Reforms Target Waste and Abuse

FCC Chairman Brendan Carr proposed a Notice of Proposed Rulemaking adopted February 17-18, 2026, to define Lifeline as a federal benefit for living, lawful U.S. citizens or qualified aliens. Measures include ending all state opt-outs, mandatory SSN and DHS database checks, secondary verification, and de-enrolling all 117,000 identified dead subscribers. Carr stated government should not spend on dead people, prioritizing cleanup before any expansions. This aligns with fiscal responsibility, ensuring funds reach intended low-income Americans.

Universal Service Administrative Company administers Lifeline, serving 8.1 million subscribers as of June 2025, down from 8.8 million end-2024. Subscriber base represents 21% of eligibles, with $9.25 monthly discounts, up to $34.25 on Tribal lands. Reforms promise short-term savings of $5-10.5 million and long-term surcharge relief, though Commissioner Anna Gomez dissented, claiming overreach that erects barriers for legitimate users.

Taxpayer Victory Amid Political Pushback

Americans for Tax Reform praised the reforms for upholding rule-of-law and securing $5 million savings. CPUC insists its California LifeLine remains unaffected by federal changes. Provider probes continue, with NPRM now in public comment phase. This episode underscores dangers of state opt-outs and lax verification, echoing past USF waste like the Affordable Connectivity Program collapse. Under President Trump’s administration, such accountability restores trust in government programs.

New bill targets CA's 'Obamaphone Fraud' after state collected millions for dead people's phone, internet service https://t.co/yJXgbvj6yM pic.twitter.com/GUhIFxC7b5

— New York Post (@nypost) February 27, 2026

Broader impacts include enhanced compliance for telecom providers and precedents for USF integrity. Low-income households may face verification hurdles, but targeting fraud protects resources for citizens. Political divides persist, with Carr’s fiscal conservatism countering equity-focused critiques. Taxpayers gain from curbed abuse tied to non-citizen SSN fraud concerns.