Notice of Suspension and Commencement of Proposed Debarment Proceedings; Schools and Libraries Universal Service Support Mechanism, 48154-48156 [2012-19813]
Download as PDF
48154
Federal Register / Vol. 77, No. 156 / Monday, August 13, 2012 / Notices
FEDERAL COMMUNICATIONS
COMMISSION
[DA 12–1211]
Notice of Suspension and
Commencement of Proposed
Debarment Proceedings; Schools and
Libraries Universal Service Support
Mechanism
Federal Communications
Commission.
ACTION: Notice.
AGENCY:
The Enforcement Bureau (the
‘‘Bureau’’) gives notice of Mr. Willard
Ross Lanham’s suspension from the
schools and libraries universal service
support mechanism (or ‘‘E-Rate
Program’’). Additionally, the Bureau
gives notice that debarment proceedings
are commencing against him. Mr.
Lanham, or any person who has an
existing contract with or intends to
contract with him to provide or receive
services in matters arising out of
activities associated with or related to
the schools and libraries support, may
respond by filing an opposition request,
supported by documentation to Joy
Ragsdale, Federal Communications
Commission, Enforcement Bureau,
Investigations and Hearings Division,
Room 4–C330, 445 12th Street SW.,
Washington, DC 20554.
DATES: Opposition requests must be
received by 30 days from the receipt of
the suspension letter or September 12,
2012, whichever comes first. The
Bureau will decide any opposition
request for reversal or modification of
suspension or debarment within 90 days
of its receipt of such requests.
ADDRESSES: Federal Communications
Commission, Enforcement Bureau,
Investigations and Hearings Division,
Room 4–C330, 445 12th Street SW.,
Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: Joy
Ragsdale, Federal Communications
Commission, Enforcement Bureau,
Investigations and Hearings Division,
Room 4–C330, 445 12th Street SW.,
Washington, DC 20554. Joy Ragsdale
may be contacted by phone at (202)
418–1697 or email at
Joy.Ragsdale@fcc.gov. If Ms. Ragsdale is
unavailable, you may contact Ms.
Theresa Cavanaugh, Chief,
Investigations and Hearings Division, by
telephone at (202) 418–1420 and by
email at Terry.Cavanaugh@fcc.gov.
SUPPLEMENTARY INFORMATION: The
Bureau has suspension and debarment
authority pursuant to 47 CFR 54.8 and
47 CFR 0.111(a)(14). Suspension will
help to ensure that the party to be
suspended cannot continue to benefit
mstockstill on DSK4VPTVN1PROD with NOTICES
SUMMARY:
VerDate Mar<15>2010
16:29 Aug 10, 2012
Jkt 226001
from the schools and libraries
mechanism pending resolution of the
debarment process. Attached is the
suspension letter, DA 12–1211, which
was mailed to Mr. Lanham and released
on July 27, 2012. The complete text of
the notice of suspension and initiation
of debarment proceedings is available
for public inspection and copying
during regular business hours at the
FCC Reference Information Center,
Portal II, 445 12th Street SW., Room
CY–A257, Washington, DC 20554. In
addition, the complete text is available
on the FCC’s Web site at https://
www.fcc.gov. The text may also be
purchased from the Commission’s
duplicating inspection and copying
during regular business hours at the
contractor, Best Copy and Printing, Inc.,
Portal II, 445 12th Street SW., Room
CY–B420, Washington, DC 20554,
telephone (202) 488–5300 or (800) 378–
3160, facsimile (202) 488–5563, or via
email https://www.bcpiweb.com.
Dated: July 27, 2012.
Federal Communications Commission.
Theresa Z. Cavanaugh,
Chief, Investigations and Hearings Division,
Enforcement Bureau.
Sent Via Certified Mail, Return Receipt
Requested and Email
Mr. Willard Ross Lanham, c/o Stephen
N. Preziosi, Law Office of Stephen
N. Preziosi P.C., 570 Seventh
Avenue, Ninth Floor, New York,
NY 10018.
Re: Notice of Suspension and Initiation
of Debarment Proceeding File No.
EB–12–IH–0847
Dear Mr. Lanham: The Federal
Communications Commission
(Commission or FCC) has received
notice of your conviction for theft of
federal education funds in violation of
18 U.S.C. 666(a)(1), and mail fraud in
violation of 18 U.S.C. 1341, in
connection with the federal schools and
libraries universal service support
mechanism (E-Rate program).1
Consequently, pursuant to 47 CFR 54.8,
this letter constitutes official notice of
your suspension from participating in
activities associated with the E-Rate
program. In addition, the Enforcement
Bureau (Bureau) hereby notifies you that
1 Any further reference in this letter to ‘‘your
conviction’’ refers to the jury’s verdict finding you
guilty on one count of theft of federal funds and
three counts of mail fraud. Trial Transcript at 887,
United States v. Willard Lanham, Jury Trial, No. 11
CR 548 GBD (S.D.N.Y. 2012) (Trial Tr.); United
States v. Willard Lanham, No. 11 CR 548 GBD,
Order (S.D.N.Y. June 13) (order denying motions for
judgment of acquittal and for a new trial).
PO 00000
Frm 00032
Fmt 4703
Sfmt 4703
it will commence debarment
proceedings against you.2
I. Notice of Suspension
The Commission has established
procedures to prevent persons who have
‘‘defrauded the government or engaged
in similar acts through activities
associated with or related to the [E-Rate
program]’’ from receiving the benefits
associated with that program.3 The
statutory provisions and Commission
rules relating to the E-Rate program are
designed to ensure that all E-Rate funds
are used for their intended purpose.4
For example, section 254(h)(1)(B) of the
Communications Act of 1934, as
amended, requires E-Rate program
applicants to make bona fide requests
for services intended for educational
purposes in order to receive E-Rate
discounts.5 Further, the Commission
has stated that ‘‘[a] funding request may
not be bona fide where a service
provider has charged the beneficiary an
inflated price.’’ 6 The Commission also
2 See 47 CFR 0.111 (delegating authority to the
Bureau to resolve universal service suspension and
debarment proceedings). The Commission adopted
debarment rules for the E-Rate program in 2003. See
Schools and Libraries Universal Service Support
Mechanism, Second Report and Order and Further
Notice of Proposed Rulemaking, 18 FCC Rcd 9202
(2003) (Second Report and Order) (adopting
§ 54.521 to suspend and debar parties from the ERate program). In 2007 the Commission extended
the debarment rules to apply to all federal universal
service support mechanisms. Comprehensive
Review of the Universal Service Fund Management,
Administration, and Oversight; Federal-State Joint
Board on Universal Service; Schools and Libraries
Universal Service Support Mechanism; Rural
Health Care Support Mechanism; Lifeline and Link
Up; Changes to the Board of Directors for the
National Exchange Carrier Association, Inc., Report
and Order, 22 FCC Rcd 16372, app. C at 16410–12
(2007) (Program Management Order) (renumbering
§ 54.521 of the universal service debarment rules as
§ 54.8 and amending subsections (a)(1), (a)(5), (c),
(d), (e)(2)(i), (e)(3), (e)(4), and (g)).
3 Second Report and Order, 18 FCC Rcd at 9225,
para. 66; Program Management Order, 22 FCC Rcd
at 16387, para. 32. The Commission’s debarment
rules define a ‘‘person’’ as ‘‘[a]ny individual, group
of individuals, corporation, partnership,
association, unit of government or legal entity,
however organized.’’ 47 CFR 54.8(a)(6).
4 NEC–Business Network Solutions, Inc., Notice of
Debarment and Order Denying Waiver Petition, 21
FCC Rcd 7491, 7493, para. 7 (2006).
5 47 U.S.C. 245(h)(1)(B); Request for Review by
Ysleta Independent School District of the Decision
of the Universal Service Administrator, CC Docket
Nos. 96–45, 97–21, Order, 18 FCC Rcd 26407,
26409, para. 5 (2003), (citing Federal-State Joint
Board on Universal Service, CC Docket No. 96–45,
Report and Order, 12 FCC Rcd 8776, 9076, para. 570
(1997)).
6 Schools and Libraries Universal Service Support
Mechanism, Fifth Report and Order and Order, 19
FCC Rcd 15808, 15818, para. 30 (2004). The
Commission has taken enforcement action against
service providers who inflated their rates and
subsequently requested E-Rate funding for those
associated costs. See Letter from William H.
Davenport, Chief, Investigations and Hearings
Division, Enforcement Bureau, Federal
E:\FR\FM\13AUN1.SGM
13AUN1
Federal Register / Vol. 77, No. 156 / Monday, August 13, 2012 / Notices
mstockstill on DSK4VPTVN1PROD with NOTICES
limits E-Rate funding to certain eligible
services, which does not include
consulting services.7
On March 5, 2012, a jury rendered a
guilty verdict convicting you on one
count of theft of federal funds and three
counts of mail fraud in connection with
your activities as an E-Rate consultant
for the New York City Department of
Education (DOE).8 Your responsibilities
as a DOE consultant included
overseeing Project Connect, a project
designed to bring Internet connectivity
to New York City schools.9 On April 28,
2011, the Special Commissioner of
Investigation for the New York City
School District (SCI) released a report
alleging, among other matters, that you
had orchestrated a fraudulent invoicing
and billing scheme using DOE vendors
and subcontractors to overcharge DOE
for Project Connect.10
Testimony and documentary evidence
admitted during your trial corroborates
SCI’s allegations. Specifically, witnesses
testified that you: (1) Arranged for
employees of your company, Lanham
Enterprises, Inc., to work as consultants
for DOE,11 (2) inflated their hourly rates
far above their salaries,12 and (3)
arranged for Project Connect
subcontractors to bill those inflated
rates to a Project Connect contractor
using invoices that misstated the true
Communications Commission, to Steven G.
Mihaylo, Notice of Suspension and of Proposed
Debarment, 20 FCC Rcd 1372 (Enf. Bur. 2005); see
also Letter from Hillary S. DeNigro, Chief,
Investigations and Hearings Division, Enforcement
Bureau, Federal Communications Commission, to
Richard E. Brown, Notice of Debarment, 22 FCC
Rcd 20569 (Enf. Bur. 2007) (debarment of service
provider who inflated costs in an attempt to defraud
the E-Rate program).
7 Federal-State Joint Board on Universal Service,
Total Communications, Inc., Site Link
Communications, Inc., Requests for Review of
Decisions of the Universal Service Administrator,
Order, 16 FCC Rcd 14020, 14023–24, para. 9 & n.23
(Com. Car. Bur. 2001) (Site Link Order).
8 Trial Tr. at 887.
9 See Trial Testimony of Tom Kambouras; Trial
Tr. at 34–36; Testimony of Stephen Vigilante, Trial
Tr. at 274–75.
10 Special Commissioner of Investigation Report
to Hon. Dennis M. Walcott, Chancellor New York
City Public Schools, Dep’t of Education from
Richard J. Condon, Special Commissioner of
Investigation for the New York City School District,
SCI Case No. 2008–4446, at 1 (Apr. 28, 2011), at
https://www.nycsci.org/reports/0411%20Lanham%20Rpt.pdf (SCI Report).
11 Testimony of Michael Pizza, Trial Tr. at 162–
66; Testimony of Stephen Vigilante, Trial Tr. at
289–96. These consultants also worked on a second
project that you managed for DOE that involved
reviewing, paying, and centralizing DOE’s
telephone bills. Testimony of Stephen Vigilante,
Trial Tr. at 282, 290.
12 Testimony of Tamika Stevenson, Trial Tr. at
218; see also SCI Report at 6 & n.18 (stating three
of the consultants who were paid $30 to $70 per
hour had their services billed to DOE at $290 an
hour or more).
VerDate Mar<15>2010
16:29 Aug 10, 2012
Jkt 226001
nature of the charges.13 Witnesses
further testified you directed employees
of that contractor to ‘‘bundle’’ the
consultant charges with services eligible
for E-Rate funding on invoices and
billing spreadsheets sent to DOE in
order to make it appear that the
consultants were doing work associated
with wiring the schools for Internet
access service.14 Your scheme resulted
in DOE being fraudulently billed more
than $3.6 million for Project Connect
between 2002 and 2008, of which you
profited approximately $1.7 million.15
The DOE included at least a portion of
these overcharges in its E-Rate funding
requests for Project Connect.16
Pursuant to § 54.8(b) of the
Commission’s rules,17 upon your
conviction the Bureau is required to
suspend you from participating in any
activities associated with or related to
the E-Rate program, including the
receipt of funds or discounted services
through the E-Rate program, or
consulting with, assisting, or advising
applicants or service providers
regarding the E-Rate program.18 Your
suspension becomes effective upon
receipt of this letter or its publication in
the Federal Register, whichever comes
first.19
In accordance with the Commission’s
suspension and debarment rules, you
may contest this suspension or the
scope of this suspension by filing
arguments, with any relevant
documents, within thirty (30) calendar
days of receipt of this letter or it’s
publication in the Federal Register
whichever comes first.20 Such requests,
however, will not ordinarily be
granted.21 The Bureau may reverse or
limit the scope of suspension only upon
a finding of extraordinary
circumstances.22 The Bureau will
decide any request to reverse or modify
a suspension within ninety (90)
calendar days of its receipt of such
request.23
II. Initiation of Debarment Proceedings
In addition to requiring your
immediate suspension from the E-Rate
program, your conviction is cause for
debarment as defined in § 54.8(c) of the
Commission’s rules.24 Therefore,
pursuant to § 54.8(b) of the rules, your
conviction requires the Bureau to
commence debarment proceedings
against you.25
As with the suspension process, you
may contest the proposed debarment or
the scope of the proposed debarment by
filing arguments and any relevant
documentation within thirty (30)
calendar days of receipt of this letter or
its publication in the Federal Register,
whichever comes first.26 The Bureau, in
the absence of extraordinary
circumstances, will notify you of its
decision to debar within ninety (90)
calendar days of receiving any
information you may have filed.27 If the
Bureau decides to debar you, its
decision will become effective upon
either your receipt of a debarment
notice or publication of the decision in
the Federal Register, whichever comes
first.28
If and when your debarment becomes
effective, you will be prohibited from
participating in activities associated
21 Id.
22 Id.
13 Testimony
of Christopher Louridas, Trial Tr. at
124–38; see also SCI Report at 7 & n.20.
14 Testimony of Christopher Louridas, Trial Tr. at
124–26; Testimony of Joseph Iacoviello, Trial Tr. at
81–82; Testimony of Stephen Vigilante, Trial Tr. at
294–96; Testimony of Willard Lanham, Trial Tr. at
613, 616–18, 636–38, 702–12, 735–38.
15 See Testimony of Valerie Batista, Trial Tr. at
453–54 (testifying that Verizon billed DOE $3.9
million for the telecommunications consultants’
work); SCI Report at 1 (stating that DOE paid Mr.
Lanham approximately $3.6 million for the
consultants’ work).
16 See Testimony of Stephen Vigilante, Trial Tr.
at 274–75; see also News Release, Representative
Charles B. Rangel, Ranking Democrat, Committee
on Ways and Means, Chancellor Harold O. Levy
and Congressman Charles Rangel Announce
Utilization of Federal Assistance for School
Modernization (Jan. 8, 2002), at https://
www.house.gov/apps/list/speech/ny15_rangel/
pr.wm.schoolsqzab.html (News Release) (stating
Project Connect would be ‘‘largely financed through
the federal E-[R]ate program’’).
17 47 CFR 54.8(b); see Second Report and Order,
18 FCC Rcd at 9225–27, paras. 67–74.
18 47 CFR 54.8(a)(1), (d).
19 Second Report and Order, 18 FCC Rcd at 9226,
para. 69; 47 CFR 54.8(e)(1).
20 47 CFR 54.8(e)(4).
PO 00000
Frm 00033
Fmt 4703
Sfmt 4703
48155
54.8(f).
Second Report and Order, 18 FCC Rcd at
9226, para. 70; 47 CFR 54.8(e)(5).
24 ‘‘Causes for suspension and debarment are
conviction of or civil judgment for attempt or
commission of criminal fraud, theft, embezzlement,
forgery, bribery, falsification or destruction of
records, making false statements, receiving stolen
property, making false claims, obstruction of justice
and other fraud or criminal offense arising out of
activities associated with or related to the schools
and libraries support mechanism, the high-cost
support mechanism, the rural healthcare support
mechanism, and the low-income support
mechanism.’’ 47 CFR. 54.8(c). Associated activities
‘‘include the receipt of funds or discounted services
through [the federal universal service] support
mechanisms, or consulting with, assisting, or
advising applicants or service providers regarding
[the federal universal service] support
mechanisms.’’ Id. 54.8(a)(1).
25 Id. 54.8(b).
26 Second Report and Order, 18 FCC Rcd at 9226,
para. 70; 47 CFR 54.8(e)(3).
27 Second Report and Order, 18 FCC Rcd at 9226,
para. 70; 47 CFR 54.8(e)(5).
28 47 CFR 54.8(e)(5). The Commission may
reverse a debarment, or may limit the scope or
period of debarment, upon a finding of
extraordinary circumstances, following the filing of
a petition by you or an interested party or upon
motion by the Commission. Id.54.8(f).
23 See
E:\FR\FM\13AUN1.SGM
13AUN1
48156
Federal Register / Vol. 77, No. 156 / Monday, August 13, 2012 / Notices
with or related to the E-Rate program for
three years from the date of
debarment.29 The Bureau may set a
longer debarment period or extend an
existing debarment period if necessary
to protect the public interest.30
Please direct any response, if sent by
messenger or hand delivery, to Marlene
H. Dortch, Secretary, Federal
Communications Commission, 445 12th
Street SW., Room TW–A325,
Washington, DC 20554, to the attention
of Joy M. Ragsdale, Attorney Advisor,
Investigations and Hearings Division,
Enforcement Bureau, Room 4–C330,
with a copy to Theresa Z. Cavanaugh,
Chief, Investigations and Hearings
Division, Enforcement Bureau, Room 4–
C330, Federal Communications
Commission. All messenger or hand
delivery filings must be submitted
without envelopes.31 If sent by
commercial overnight mail (other than
U.S. Postal Service (USPS) Express Mail
and Priority Mail), the response must be
sent to the Federal Communications
Commission, 9300 East Hampton Drive,
Capitol Heights, Maryland 20743. If sent
by USPS First Class, Express Mail, or
Priority Mail, the response should be
addressed to Joy Ragsdale, Attorney
Advisor, Investigations and Hearings
Division, Enforcement Bureau, Federal
Communications Commission, 445 12th
Street SW., Room 4–C330, Washington,
DC 20554, with a copy to Theresa Z.
Cavanaugh, Chief, Investigations and
Hearings Division, Enforcement Bureau,
Federal Communications Commission,
445 12th Street SW., Room 4–C330,
Washington, DC 20554. You shall also
transmit a copy of your response via
email to Joy M. Ragsdale,
Joy.Ragsdale@fcc.gov and to Theresa Z.
Cavanaugh, Terry.Cavanaugh@fcc.gov.
If you have any questions, please
contact Ms. Ragsdale via U.S. postal
mail, email, or by telephone at (202)
418–1697. You may contact me at (202)
418–1553 or at the email address noted
above if Ms. Ragsdale is unavailable.
Sincerely yours,
Theresa Z. Cavanaugh,
Chief, Investigations and Hearings Division,
Enforcement Bureau.
mstockstill on DSK4VPTVN1PROD with NOTICES
[FR Doc. 2012–19813 Filed 8–10–12; 8:45 am]
BILLING CODE 6712–01–P
29 Second Report and Order, 18 FCC Rcd at 9225,
para. 67; 47 CFR 54.8(d), (g).
30 47 CFR 54.8(g).
31 See FCC Announces Change in Filing Location
for Paper Documents, Public Notice, 24 FCC Rcd
14312 (2009) for further filing instructions.
VerDate Mar<15>2010
16:29 Aug 10, 2012
Jkt 226001
FEDERAL DEPOSIT INSURANCE
CORPORATION
Notice to All Interested Parties of the
Termination of the Receivership of
10385, Virginia Business Bank,
Richmond, VA
Notice is hereby given that the Federal
Deposit Insurance Corporation (‘‘FDIC’’)
as Receiver for Virginia Business Bank,
(‘‘the Receiver’’) intends to terminate its
receivership for said institution. The
FDIC was appointed receiver of Virginia
Business Bank on July 29, 2011. The
liquidation of the receivership assets
has been completed. To the extent
permitted by available funds and in
accordance with law, the Receiver will
be making a final dividend payment to
proven creditors.
Based upon the foregoing, the
Receiver has determined that the
continued existence of the receivership
will serve no useful purpose.
Consequently, notice is given that the
receivership shall be terminated, to be
effective no sooner than thirty days after
the date of this Notice. If any person
wishes to comment concerning the
termination of the receivership, such
comment must be made in writing and
sent within thirty days of the date of
this Notice to: Federal Deposit
Insurance Corporation, Division of
Resolutions and Receiverships,
Attention: Receivership Oversight
Department 8.1, 1601 Bryan Street,
Dallas, TX 75201.
No comments concerning the
termination of this receivership will be
considered which are not sent within
this time frame.
Dated: August 8, 2012.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2012–19799 Filed 8–10–12; 8:45 am]
BILLING CODE 6714–01–P
FEDERAL RESERVE SYSTEM
Change in Bank Control Notices;
Acquisitions of Shares of a Bank or
Bank Holding Company
The notificants listed below have
applied under the Change in Bank
Control Act (12 U.S.C. 1817(j)) and
§ 225.41 of the Board’s Regulation Y (12
CFR 225.41) to acquire shares of a bank
or bank holding company. The factors
that are considered in acting on the
notices are set forth in paragraph 7 of
the Act (12 U.S.C. 1817(j)(7)).
The notices are available for
immediate inspection at the Federal
Reserve Bank indicated. The notices
PO 00000
Frm 00034
Fmt 4703
Sfmt 4703
also will be available for inspection at
the offices of the Board of Governors.
Interested persons may express their
views in writing to the Reserve Bank
indicated for that notice or to the offices
of the Board of Governors. Comments
must be received not later than August
28, 2012.
A. Federal Reserve Bank of Atlanta
(Chapelle Davis, Assistant Vice
President) 1000 Peachtree Street NE.,
Atlanta, Georgia 30309:
1. Guice Slawson, Jr., Joe Stinson
Slawson, and William Edgar Slawson,
all of Montgomery, Alabama; to
collectively acquire voting shares of FEB
Bancshares, Inc., and thereby indirectly
acquire voting shares of Farmers
Exchange Bank, both in Louisville,
Alabama.
B. Federal Reserve Bank of
Minneapolis (Jacqueline G. King,
Community Affairs Officer) 90
Hennepin Avenue, Minneapolis,
Minnesota 55480–0291:
1. MVC Private Equity Fund, LP,
Purchase, NY; MVC GP II, LLC; MVC
Financial Services, Inc.; MVC Partners
LLC; MVC Capital, Inc.; The Tokarz
Group Advisors LLC; Michael Tokarz,
all of Purchase, New York; and James
Pinto, Greenwich, Connecticut
(collectively ‘‘MVC’’); to acquire voting
shares of BNCCORP, Inc., Bismarck,
North Dakota, and thereby indirectly
acquire voting shares of BNC National
Bank, Glendale, Arizona.
2. MVC; Prairie Petroleum Inc., and
William Coleman, both of Denver,
Colorado; Eugene Nicholas, Cando,
North Dakota; Timothy Dodd and
Bradley Fey, both of Bismarck, North
Dakota; Jeffrey Topp, Grace City, North
Dakota; Janet Topp, Grace City, North
Dakota; and Roger Kenner, Leeds, North
Dakota; as a group acting in concert, to
collectively acquire voting shares of
BNCCORP, Inc., Bismarck, North
Dakota, and thereby indirectly acquire
voting shares of BNC National Bank,
Glendale, Arizona.
Board of Governors of the Federal Reserve
System, August 8, 2012.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2012–19772 Filed 8–10–12; 8:45 am]
BILLING CODE 6210–01–P
FEDERAL RESERVE SYSTEM
Formations of, Acquisitions by, and
Mergers of Bank Holding Companies
The companies listed in this notice
have applied to the Board for approval,
pursuant to the Bank Holding Company
Act of 1956 (12 U.S.C. 1841 et seq.)
(BHC Act), Regulation Y (12 CFR part
E:\FR\FM\13AUN1.SGM
13AUN1
Agencies
[Federal Register Volume 77, Number 156 (Monday, August 13, 2012)]
[Notices]
[Pages 48154-48156]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-19813]
[[Page 48154]]
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
[DA 12-1211]
Notice of Suspension and Commencement of Proposed Debarment
Proceedings; Schools and Libraries Universal Service Support Mechanism
AGENCY: Federal Communications Commission.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Enforcement Bureau (the ``Bureau'') gives notice of Mr.
Willard Ross Lanham's suspension from the schools and libraries
universal service support mechanism (or ``E-Rate Program'').
Additionally, the Bureau gives notice that debarment proceedings are
commencing against him. Mr. Lanham, or any person who has an existing
contract with or intends to contract with him to provide or receive
services in matters arising out of activities associated with or
related to the schools and libraries support, may respond by filing an
opposition request, supported by documentation to Joy Ragsdale, Federal
Communications Commission, Enforcement Bureau, Investigations and
Hearings Division, Room 4-C330, 445 12th Street SW., Washington, DC
20554.
DATES: Opposition requests must be received by 30 days from the receipt
of the suspension letter or September 12, 2012, whichever comes first.
The Bureau will decide any opposition request for reversal or
modification of suspension or debarment within 90 days of its receipt
of such requests.
ADDRESSES: Federal Communications Commission, Enforcement Bureau,
Investigations and Hearings Division, Room 4-C330, 445 12th Street SW.,
Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: Joy Ragsdale, Federal Communications
Commission, Enforcement Bureau, Investigations and Hearings Division,
Room 4-C330, 445 12th Street SW., Washington, DC 20554. Joy Ragsdale
may be contacted by phone at (202) 418-1697 or email at
Joy.Ragsdale@fcc.gov. If Ms. Ragsdale is unavailable, you may contact
Ms. Theresa Cavanaugh, Chief, Investigations and Hearings Division, by
telephone at (202) 418-1420 and by email at Terry.Cavanaugh@fcc.gov.
SUPPLEMENTARY INFORMATION: The Bureau has suspension and debarment
authority pursuant to 47 CFR 54.8 and 47 CFR 0.111(a)(14). Suspension
will help to ensure that the party to be suspended cannot continue to
benefit from the schools and libraries mechanism pending resolution of
the debarment process. Attached is the suspension letter, DA 12-1211,
which was mailed to Mr. Lanham and released on July 27, 2012. The
complete text of the notice of suspension and initiation of debarment
proceedings is available for public inspection and copying during
regular business hours at the FCC Reference Information Center, Portal
II, 445 12th Street SW., Room CY-A257, Washington, DC 20554. In
addition, the complete text is available on the FCC's Web site at
https://www.fcc.gov. The text may also be purchased from the
Commission's duplicating inspection and copying during regular business
hours at the contractor, Best Copy and Printing, Inc., Portal II, 445
12th Street SW., Room CY-B420, Washington, DC 20554, telephone (202)
488-5300 or (800) 378-3160, facsimile (202) 488-5563, or via email
https://www.bcpiweb.com.
Dated: July 27, 2012.
Federal Communications Commission.
Theresa Z. Cavanaugh,
Chief, Investigations and Hearings Division, Enforcement Bureau.
Sent Via Certified Mail, Return Receipt Requested and Email
Mr. Willard Ross Lanham, c/o Stephen N. Preziosi, Law Office of Stephen
N. Preziosi P.C., 570 Seventh Avenue, Ninth Floor, New York, NY 10018.
Re: Notice of Suspension and Initiation of Debarment Proceeding File
No. EB-12-IH-0847
Dear Mr. Lanham: The Federal Communications Commission (Commission
or FCC) has received notice of your conviction for theft of federal
education funds in violation of 18 U.S.C. 666(a)(1), and mail fraud in
violation of 18 U.S.C. 1341, in connection with the federal schools and
libraries universal service support mechanism (E-Rate program).\1\
Consequently, pursuant to 47 CFR 54.8, this letter constitutes official
notice of your suspension from participating in activities associated
with the E-Rate program. In addition, the Enforcement Bureau (Bureau)
hereby notifies you that it will commence debarment proceedings against
you.\2\
---------------------------------------------------------------------------
\1\ Any further reference in this letter to ``your conviction''
refers to the jury's verdict finding you guilty on one count of
theft of federal funds and three counts of mail fraud. Trial
Transcript at 887, United States v. Willard Lanham, Jury Trial, No.
11 CR 548 GBD (S.D.N.Y. 2012) (Trial Tr.); United States v. Willard
Lanham, No. 11 CR 548 GBD, Order (S.D.N.Y. June 13) (order denying
motions for judgment of acquittal and for a new trial).
\2\ See 47 CFR 0.111 (delegating authority to the Bureau to
resolve universal service suspension and debarment proceedings). The
Commission adopted debarment rules for the E-Rate program in 2003.
See Schools and Libraries Universal Service Support Mechanism,
Second Report and Order and Further Notice of Proposed Rulemaking,
18 FCC Rcd 9202 (2003) (Second Report and Order) (adopting Sec.
54.521 to suspend and debar parties from the E-Rate program). In
2007 the Commission extended the debarment rules to apply to all
federal universal service support mechanisms. Comprehensive Review
of the Universal Service Fund Management, Administration, and
Oversight; Federal-State Joint Board on Universal Service; Schools
and Libraries Universal Service Support Mechanism; Rural Health Care
Support Mechanism; Lifeline and Link Up; Changes to the Board of
Directors for the National Exchange Carrier Association, Inc.,
Report and Order, 22 FCC Rcd 16372, app. C at 16410-12 (2007)
(Program Management Order) (renumbering Sec. 54.521 of the
universal service debarment rules as Sec. 54.8 and amending
subsections (a)(1), (a)(5), (c), (d), (e)(2)(i), (e)(3), (e)(4), and
(g)).
---------------------------------------------------------------------------
I. Notice of Suspension
The Commission has established procedures to prevent persons who
have ``defrauded the government or engaged in similar acts through
activities associated with or related to the [E-Rate program]'' from
receiving the benefits associated with that program.\3\ The statutory
provisions and Commission rules relating to the E-Rate program are
designed to ensure that all E-Rate funds are used for their intended
purpose.\4\ For example, section 254(h)(1)(B) of the Communications Act
of 1934, as amended, requires E-Rate program applicants to make bona
fide requests for services intended for educational purposes in order
to receive E-Rate discounts.\5\ Further, the Commission has stated that
``[a] funding request may not be bona fide where a service provider has
charged the beneficiary an inflated price.'' \6\ The Commission also
[[Page 48155]]
limits E-Rate funding to certain eligible services, which does not
include consulting services.\7\
---------------------------------------------------------------------------
\3\ Second Report and Order, 18 FCC Rcd at 9225, para. 66;
Program Management Order, 22 FCC Rcd at 16387, para. 32. The
Commission's debarment rules define a ``person'' as ``[a]ny
individual, group of individuals, corporation, partnership,
association, unit of government or legal entity, however
organized.'' 47 CFR 54.8(a)(6).
\4\ NEC-Business Network Solutions, Inc., Notice of Debarment
and Order Denying Waiver Petition, 21 FCC Rcd 7491, 7493, para. 7
(2006).
\5\ 47 U.S.C. 245(h)(1)(B); Request for Review by Ysleta
Independent School District of the Decision of the Universal Service
Administrator, CC Docket Nos. 96-45, 97-21, Order, 18 FCC Rcd 26407,
26409, para. 5 (2003), (citing Federal-State Joint Board on
Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Rcd
8776, 9076, para. 570 (1997)).
\6\ Schools and Libraries Universal Service Support Mechanism,
Fifth Report and Order and Order, 19 FCC Rcd 15808, 15818, para. 30
(2004). The Commission has taken enforcement action against service
providers who inflated their rates and subsequently requested E-Rate
funding for those associated costs. See Letter from William H.
Davenport, Chief, Investigations and Hearings Division, Enforcement
Bureau, Federal Communications Commission, to Steven G. Mihaylo,
Notice of Suspension and of Proposed Debarment, 20 FCC Rcd 1372
(Enf. Bur. 2005); see also Letter from Hillary S. DeNigro, Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, to Richard E. Brown, Notice of Debarment,
22 FCC Rcd 20569 (Enf. Bur. 2007) (debarment of service provider who
inflated costs in an attempt to defraud the E-Rate program).
\7\ Federal-State Joint Board on Universal Service, Total
Communications, Inc., Site Link Communications, Inc., Requests for
Review of Decisions of the Universal Service Administrator, Order,
16 FCC Rcd 14020, 14023-24, para. 9 & n.23 (Com. Car. Bur. 2001)
(Site Link Order).
---------------------------------------------------------------------------
On March 5, 2012, a jury rendered a guilty verdict convicting you
on one count of theft of federal funds and three counts of mail fraud
in connection with your activities as an E-Rate consultant for the New
York City Department of Education (DOE).\8\ Your responsibilities as a
DOE consultant included overseeing Project Connect, a project designed
to bring Internet connectivity to New York City schools.\9\ On April
28, 2011, the Special Commissioner of Investigation for the New York
City School District (SCI) released a report alleging, among other
matters, that you had orchestrated a fraudulent invoicing and billing
scheme using DOE vendors and subcontractors to overcharge DOE for
Project Connect.\10\
---------------------------------------------------------------------------
\8\ Trial Tr. at 887.
\9\ See Trial Testimony of Tom Kambouras; Trial Tr. at 34-36;
Testimony of Stephen Vigilante, Trial Tr. at 274-75.
\10\ Special Commissioner of Investigation Report to Hon. Dennis
M. Walcott, Chancellor New York City Public Schools, Dep't of
Education from Richard J. Condon, Special Commissioner of
Investigation for the New York City School District, SCI Case No.
2008-4446, at 1 (Apr. 28, 2011), at https://www.nycsci.org/reports/04-11%20Lanham%20Rpt.pdf (SCI Report).
---------------------------------------------------------------------------
Testimony and documentary evidence admitted during your trial
corroborates SCI's allegations. Specifically, witnesses testified that
you: (1) Arranged for employees of your company, Lanham Enterprises,
Inc., to work as consultants for DOE,\11\ (2) inflated their hourly
rates far above their salaries,\12\ and (3) arranged for Project
Connect subcontractors to bill those inflated rates to a Project
Connect contractor using invoices that misstated the true nature of the
charges.\13\ Witnesses further testified you directed employees of that
contractor to ``bundle'' the consultant charges with services eligible
for E-Rate funding on invoices and billing spreadsheets sent to DOE in
order to make it appear that the consultants were doing work associated
with wiring the schools for Internet access service.\14\ Your scheme
resulted in DOE being fraudulently billed more than $3.6 million for
Project Connect between 2002 and 2008, of which you profited
approximately $1.7 million.\15\ The DOE included at least a portion of
these overcharges in its E-Rate funding requests for Project
Connect.\16\
---------------------------------------------------------------------------
\11\ Testimony of Michael Pizza, Trial Tr. at 162-66; Testimony
of Stephen Vigilante, Trial Tr. at 289-96. These consultants also
worked on a second project that you managed for DOE that involved
reviewing, paying, and centralizing DOE's telephone bills. Testimony
of Stephen Vigilante, Trial Tr. at 282, 290.
\12\ Testimony of Tamika Stevenson, Trial Tr. at 218; see also
SCI Report at 6 & n.18 (stating three of the consultants who were
paid $30 to $70 per hour had their services billed to DOE at $290 an
hour or more).
\13\ Testimony of Christopher Louridas, Trial Tr. at 124-38; see
also SCI Report at 7 & n.20.
\14\ Testimony of Christopher Louridas, Trial Tr. at 124-26;
Testimony of Joseph Iacoviello, Trial Tr. at 81-82; Testimony of
Stephen Vigilante, Trial Tr. at 294-96; Testimony of Willard Lanham,
Trial Tr. at 613, 616-18, 636-38, 702-12, 735-38.
\15\ See Testimony of Valerie Batista, Trial Tr. at 453-54
(testifying that Verizon billed DOE $3.9 million for the
telecommunications consultants' work); SCI Report at 1 (stating that
DOE paid Mr. Lanham approximately $3.6 million for the consultants'
work).
\16\ See Testimony of Stephen Vigilante, Trial Tr. at 274-75;
see also News Release, Representative Charles B. Rangel, Ranking
Democrat, Committee on Ways and Means, Chancellor Harold O. Levy and
Congressman Charles Rangel Announce Utilization of Federal
Assistance for School Modernization (Jan. 8, 2002), at https://www.house.gov/apps/list/speech/ny15_rangel/pr.wm.schoolsqzab.html
(News Release) (stating Project Connect would be ``largely financed
through the federal E-[R]ate program'').
---------------------------------------------------------------------------
Pursuant to Sec. 54.8(b) of the Commission's rules,\17\ upon your
conviction the Bureau is required to suspend you from participating in
any activities associated with or related to the E-Rate program,
including the receipt of funds or discounted services through the E-
Rate program, or consulting with, assisting, or advising applicants or
service providers regarding the E-Rate program.\18\ Your suspension
becomes effective upon receipt of this letter or its publication in the
Federal Register, whichever comes first.\19\
---------------------------------------------------------------------------
\17\ 47 CFR 54.8(b); see Second Report and Order, 18 FCC Rcd at
9225-27, paras. 67-74.
\18\ 47 CFR 54.8(a)(1), (d).
\19\ Second Report and Order, 18 FCC Rcd at 9226, para. 69; 47
CFR 54.8(e)(1).
---------------------------------------------------------------------------
In accordance with the Commission's suspension and debarment rules,
you may contest this suspension or the scope of this suspension by
filing arguments, with any relevant documents, within thirty (30)
calendar days of receipt of this letter or it's publication in the
Federal Register whichever comes first.\20\ Such requests, however,
will not ordinarily be granted.\21\ The Bureau may reverse or limit the
scope of suspension only upon a finding of extraordinary
circumstances.\22\ The Bureau will decide any request to reverse or
modify a suspension within ninety (90) calendar days of its receipt of
such request.\23\
---------------------------------------------------------------------------
\20\ 47 CFR 54.8(e)(4).
\21\ Id.
\22\ Id. 54.8(f).
\23\ See Second Report and Order, 18 FCC Rcd at 9226, para. 70;
47 CFR 54.8(e)(5).
---------------------------------------------------------------------------
II. Initiation of Debarment Proceedings
In addition to requiring your immediate suspension from the E-Rate
program, your conviction is cause for debarment as defined in Sec.
54.8(c) of the Commission's rules.\24\ Therefore, pursuant to Sec.
54.8(b) of the rules, your conviction requires the Bureau to commence
debarment proceedings against you.\25\
---------------------------------------------------------------------------
\24\ ``Causes for suspension and debarment are conviction of or
civil judgment for attempt or commission of criminal fraud, theft,
embezzlement, forgery, bribery, falsification or destruction of
records, making false statements, receiving stolen property, making
false claims, obstruction of justice and other fraud or criminal
offense arising out of activities associated with or related to the
schools and libraries support mechanism, the high-cost support
mechanism, the rural healthcare support mechanism, and the low-
income support mechanism.'' 47 CFR. 54.8(c). Associated activities
``include the receipt of funds or discounted services through [the
federal universal service] support mechanisms, or consulting with,
assisting, or advising applicants or service providers regarding
[the federal universal service] support mechanisms.'' Id.
54.8(a)(1).
\25\ Id. 54.8(b).
---------------------------------------------------------------------------
As with the suspension process, you may contest the proposed
debarment or the scope of the proposed debarment by filing arguments
and any relevant documentation within thirty (30) calendar days of
receipt of this letter or its publication in the Federal Register,
whichever comes first.\26\ The Bureau, in the absence of extraordinary
circumstances, will notify you of its decision to debar within ninety
(90) calendar days of receiving any information you may have filed.\27\
If the Bureau decides to debar you, its decision will become effective
upon either your receipt of a debarment notice or publication of the
decision in the Federal Register, whichever comes first.\28\
---------------------------------------------------------------------------
\26\ Second Report and Order, 18 FCC Rcd at 9226, para. 70; 47
CFR 54.8(e)(3).
\27\ Second Report and Order, 18 FCC Rcd at 9226, para. 70; 47
CFR 54.8(e)(5).
\28\ 47 CFR 54.8(e)(5). The Commission may reverse a debarment,
or may limit the scope or period of debarment, upon a finding of
extraordinary circumstances, following the filing of a petition by
you or an interested party or upon motion by the Commission.
Id.54.8(f).
---------------------------------------------------------------------------
If and when your debarment becomes effective, you will be
prohibited from participating in activities associated
[[Page 48156]]
with or related to the E-Rate program for three years from the date of
debarment.\29\ The Bureau may set a longer debarment period or extend
an existing debarment period if necessary to protect the public
interest.\30\
---------------------------------------------------------------------------
\29\ Second Report and Order, 18 FCC Rcd at 9225, para. 67; 47
CFR 54.8(d), (g).
\30\ 47 CFR 54.8(g).
---------------------------------------------------------------------------
Please direct any response, if sent by messenger or hand delivery,
to Marlene H. Dortch, Secretary, Federal Communications Commission, 445
12th Street SW., Room TW-A325, Washington, DC 20554, to the attention
of Joy M. Ragsdale, Attorney Advisor, Investigations and Hearings
Division, Enforcement Bureau, Room 4-C330, with a copy to Theresa Z.
Cavanaugh, Chief, Investigations and Hearings Division, Enforcement
Bureau, Room 4-C330, Federal Communications Commission. All messenger
or hand delivery filings must be submitted without envelopes.\31\ If
sent by commercial overnight mail (other than U.S. Postal Service
(USPS) Express Mail and Priority Mail), the response must be sent to
the Federal Communications Commission, 9300 East Hampton Drive, Capitol
Heights, Maryland 20743. If sent by USPS First Class, Express Mail, or
Priority Mail, the response should be addressed to Joy Ragsdale,
Attorney Advisor, Investigations and Hearings Division, Enforcement
Bureau, Federal Communications Commission, 445 12th Street SW., Room 4-
C330, Washington, DC 20554, with a copy to Theresa Z. Cavanaugh, Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street SW., Room 4-C330,
Washington, DC 20554. You shall also transmit a copy of your response
via email to Joy M. Ragsdale, Joy.Ragsdale@fcc.gov and to Theresa Z.
Cavanaugh, Terry.Cavanaugh@fcc.gov.
---------------------------------------------------------------------------
\31\ See FCC Announces Change in Filing Location for Paper
Documents, Public Notice, 24 FCC Rcd 14312 (2009) for further filing
instructions.
---------------------------------------------------------------------------
If you have any questions, please contact Ms. Ragsdale via U.S.
postal mail, email, or by telephone at (202) 418-1697. You may contact
me at (202) 418-1553 or at the email address noted above if Ms.
Ragsdale is unavailable.
Sincerely yours,
Theresa Z. Cavanaugh,
Chief, Investigations and Hearings Division, Enforcement Bureau.
[FR Doc. 2012-19813 Filed 8-10-12; 8:45 am]
BILLING CODE 6712-01-P