Private Jets, Ferraris, and False Claims: Inside An Obscure Federal Program Rife With Fraud
Meet the Universal Service Fund, which doles out billions on behalf of the FCCAaron Sibarium
April 4, 2025
On March 26, 2017, Jeffrey Ansted herded his family into a private plane bound for the Cayman Islands. The owner of an Ohio-based telecommunications company, Ansted had purchased the Cessna 525C jet one year earlier for $8 million. It had since become his go-to method of commuting to Florida, where he owned a condo and belonged to yacht and country clubs, as well as to his son’s lacrosse games in Towson, Maryland. For local travel, he drove a $250,000 Ferrari.
The trip to the Caymans was the last junket Ansted took before he was busted for fraud in 2018 by the Federal Communications Commission, which found that he had paid for his lavish lifestyle, including the jet and Ferrari, by embezzling millions from the agency’s Universal Service Fund (USF), a little-known program that subsidizes phone and internet access for low-income customers.
Ansted had signed up dead people for service and even fabricated social security numbers in order to obtain subsidies from the program. Then he’d transferred those subsidies from his company, American Broadband, into a personal account, according to a public notice from the FCC.
"It would be hard to describe a more brazen or textbook example of fraud, particularly when the entire purpose of the … program is to benefit low-income individuals," then-FCC commissioner Brendan Carr, who is now the chairman, said in a statement at the time. American Broadband was fined more than $63 million, the largest such penalty in agency history.
For a government that loses hundreds of billions each year to fraud, according to some estimates, Ansted’s caper, funded by a program most Americans have never heard of, was just a drop in the bucket. But it was also a symptom of what critics say is a structural defect at the heart of USF, which has for decades faced allegations of fraud and mismanagement from the Government Accountability Office (GAO).
Created in 1996 as part of the Telecommunications Act, the program is funded through a surcharge on consumers’ telephone bills. But the size of that charge isn’t set by the FCC itself.
Instead, the agency uses the calculations of a private corporation, the Universal Service Administrative Company (USAC), which is run by representatives of the very companies that receive subsidies from the program. The companies estimate how much money they will need to expand service to high-cost areas and in nearly all cases, the FCC has miraculously set the surcharge equal to that amount, creating a system in which the beneficiaries of a government program decide how much the taxpayer spends on it.
That conflict of interest, critics say, is one reason why the surcharge has skyrocketed since the program’s inception, from just 5.7 percent in 2000 to 36.6 percent in the second quarter of 2025.
As the program has grown, so have the cases of reported fraud. And the body charged with preventing that fraud just so happens to be USAC—the same consortium of insiders that relies on the program for easy money.
The perverse incentives were noted by the Fifth Circuit Court of Appeals last year, when it ruled that the FCC’s funding structure was unconstitutional.
"The entity most responsible for snuffing out wasteful or fraudulent disbursements—USAC—is run almost entirely by stakeholders who stand to benefit financially when universal service subsidies grow," Judge Andrew Oldham wrote for a nine-judge panel.https://freebeacon.com/politics/private-jets-ferraris-and-false-claims-inside-an-obscure-federal-program-rife-with-fraud/
