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The Federal Communications Commission (FCC) today came down hard on Sandwich Isles Communications, Waimana Enterprises and Albert S.N. Hee, issuing a $49,598,488 fine for violations of Universal Service Fund program rules.

Telecompetitor first reported about the FCC’s warning about proper usage of the Universal Service Fund several years ago.

According to today’s complaint, Sandwich Isles, Waimana and Hee received more than $27 million in USF funds due to falsified reporting of costs.

According to the complaint, Hee, who controlled Sandwich Isles — the designated carrier receiving support to deploy and maintain communications networks serving Americans living on the Hawaiian Homelands, Waimana and other affiliated companies, used more than $4 million in corporate funds as his personal piggy bank. He used the funds for personal expenses for himself and his family, including:

  • Personal massages
  • Personal travel and meals
  • Tuition payments for his children,
  • A vehicle and home for his children
  • Salaries and benefits paid to his wife and children, though they didn’t do any work for Waimana.

The complaint also accused Sandwich Isles of using Universal Service Fund money to pay inflated rent and management fees to Waimana along with unjustified bonuses to Hee.

Though the fine was announced today, the case has been going on for several years. According to a press release about the FCC Sandwich Isles fines, Hee was convicted of criminal tax fraud and sentenced to nearly five years in federal prison in 2015. In December of the next year, the FCC eliminated Sandwich Isles’ ability to receive additional support from the Fund, took action to recover $27 million in improper payments Sandwich Isles had received, and proposed the $49,598,448 fine against Sandwich Isles, Waimana Enterprises and Hee.

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