******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In Re Applications of PCS 2000, L.P. For Broadband Block C Personal Communications Systems Facilities ) ) ) File Nos. 00414-CW-L-96 ) 00418-CW-L-96 ) 00419-CW-L-96 ) 00421-CW-L-96 ) 00422-CW-L-96 ) 00425-CW-L-96 ) 00426-CW-L-96 ) 00427-CW-L-96 ) 00428-CW-L-96 ) 00429-CW-L-96 ) 00432-CW-L-96 ) 00433-CW-L-96 ) 00434-CW-L-96 ) 00437-CW-L-96 ) 00438-CW-L-96 ) NOTICE OF APPARENT LIABILITY FOR FORFEITURE Adopted: January 22, 1997 Released: January 22, 1997 By the Commission: I. INTRODUCTION 1. PCS 2000, L.P. (PCS 2000) filed the above-captioned applications as the high bidder for licenses in the broadband Personal Communications Services (PCS) C Block auction. As discussed below, an officer and registered bidding agent of PCS 2000 misrepresented facts to the Commission, lacked candor before the Commission, and otherwise attempted to mislead the Commission. PCS 2000 has purged from its organization all individuals who took part in these actions, and as explained in a companion item, we are therefore persuaded that PCS 2000 will meet our expectations of a qualified licensee. Because of the misrepresentations and lack of candor that has occurred, however, we conclude that PCS 2000 is apparently liable for a forfeiture in the amount of $1,000,000. II. FACTUAL BACKGROUND A. Applicant's Past and Present Ownership and Principals 2. PCS 2000 is a limited partnership created for the purpose of applying for C Block PCS authorizations. Initially, PCS 2000 was comprised of Unicom Corporation (Unicom), as a 25 percent equity holder and sole general partner and 1,641 limited partners. The ownership of Unicom was as follows: UNICOM Owner Ownership % SDE Trust 38.6 Breen Family Trust 19.6 KHB Trust 9.5 MEB Trust 9.5 Gemini Trust 8.0 Pearl Trust 5.0 Other Shareholders 9.8 3. Javier O. Lamoso is the President and a Director of Unicom. Fred Martinez is the Chairman and a Director of Unicom. Lawrence Odell is the Secretary of Unicom. Anthony T. Easton was the Chief Executive Officer and a Director, and Quentin L. Breen was a Director of Unicom at the time PCS 2000 filed its Form 175 with the Commission. Richard Reiss was the Secretary of Unicom at the time of filing. The remaining directors of Unicom are Daniel J. Parks, Patricia Jordan, Jerry Perry, Gary Arizala, and Margaret Minnich. 4. In June 1996, Unicom sold its 25 percent general partnership interest in PCS 2000 to a newly formed company, SuperTel Communications Corporation (SuperTel). SuperTel's ownership was initially almost identical to Unicom, except that the 38.6 percent interest held by the SDE Trust in Unicom was instead held by Richard Reiss in SuperTel. The interest held by the SDE Trust was in effect "squeezed out" by the shareholders of Unicom in an attempt to cleanse the applicant of those responsible for the misrepresentations. The 1,641 limited partners remain unchanged and continue to hold the remaining 75 percent equity interest in PCS 2000. Following this restructuring, the ownership of PCS 2000's new general partner, SuperTel was as follows: SuperTel Owner Ownership % Richard Reiss 40.6 Breen Family Trust 19.6 KHB Trust 9.5 MEB Trust 9.5 Gemini Trust 8.0 Pearl Trust 5.0 Other Shareholders 7.8 PCS 2000 subsequently restructured once more in order to eliminate any direct or indirect interest held by Quentin Breen. As to Mr. Breen's interest in SuperTel, it was decided by Unicom that his interest would not be issued as stock, but instead, would be held as a warrant. Mr. Breen would only be able to receive these shares pursuant to the warrant upon (1) the award of licenses to PCS 2000, and (2) a favorable determination by the Commission that Mr. Breen meets the relevant character qualifications to hold a Commission license. Thus, the current ownership of SuperTel is as follows: SuperTel Owner Ownership % Richard Reiss 50.6 KHB Trust 11.8 MEB Trust 11.8 Gemini Trust 10.0 Pearl Trust 6.2 Other Shareholders 9.7 5. Mr. Lamoso is the President and Director of SuperTel. Mr. Martinez is the Chairman and Director of SuperTel. Richard Reiss is the current Chief Executive Officer and Treasurer of Unicom and SuperTel. Messrs. Parks, Perry, and Arizala, and Ms. Minnich are Directors of SuperTel. Messrs. Easton and Breen hold no positions with SuperTel. B. PCS 2000's Bidding Procedures 6. PCS 2000 retained Romulus Telecommunications, Inc. (RTI) to provide bidding support services to PCS 2000. At the end of any given round of the C Block PCS auction, RTI retrieved the files of the round results and the minimum bids for the next round from the Commission's FTP server. That computer would generate "Flash Reports" which would indicate the results of the auction round. The information from the Commission would also be downloaded into two separate directories: "Access" and "from mike." The Access directory was used by RTI to determine how to proceed in the next bidding round. The "from mike" directory was transferred into the BTA Selection Program, which provided the bidding agent with information and allowed the entry of bids. Anthony Easton, Quentin Breen, and Javier Lamoso were the initial bidders authorized for PCS 2000. Typically, Mr. Easton and Mr. Breen would confer regarding the bids to be placed and either Mr. Easton or Breen would prepare and submit the bids. 7. The BTA Selection Program used by RTI allowed the bidding agent to choose the minimum established bid for any given market with a single keystroke. Otherwise, if the bidding agent wished to enter a bid other than the minimum established bid, the bidding agent was required to manually key in either the actual total bid in dollars, or the bid expressed in dollars per the number of people covered in a particular market. In either case, the software displayed the amount selected and asked the bidding agent to confirm the bid amount twice. After the bidding agent had completed the BTA selection procedure, the bid information was transferred to a database file referred to by PCS 2000 as a "DBF file" stored on the network server. Three reports were generated at this time: an "Upload to FCC Report" which identified the markets selected for submission of bids; a "Control P Report" which listed all of the markets in the C Block auction, highlighting those markets for which PCS 2000 was currently the high bidder; and a "Control A Report" which additionally listed all of the markets for which PCS 2000 intended to bid in the next round. The Control P Report would be initialled with time and date by the bidding agent. 8. After the data was stored in a DBF file, the DBF file could be uploaded to the Commission's Uplink Computer via the network. After the bidding information was transferred to the Commission's bidding program, a printed copy of what appeared on the FCC screen ("Screen Preview") would be generated. The Control P Report, which had been initialled by the bidding agent, was then compared with a copy of the Screen Preview Report. If the reports were identical, the bidding agent would then give instructions for the bids to be submitted to the Commission. After submission, the Screen Preview, the initialled Control P Report, the Control A Report, and the Upload to FCC Report were placed in the auction bid binder under the appropriate round number. C. C Block Round 11 Bid and Withdrawal 9. On January 23, 1996, PCS 2000 submitted a bid of $180,060,000 ($180 million bid) for Basic Trading Area (BTA) market B324 for Norfolk, Virginia (License B324) in Round 11 of the C Block auction. Shortly after the close of Round 11, Anthony Easton, a bidding agent for PCS 2000, contacted the Commission staff by telephone and claimed that the $180 million bid was a Commission error. Mr. Easton claimed that he had supporting documentation that would demonstrate that PCS 2000 had not made the error. This telephone call, which was received on the Commission's telephonic bidding line, was recorded. The recording demonstrates that Mr. Easton told Commission staff that PCS 2000 "made [a bid] of $18 million for B324 [which] is $11.00 a POP . . . [A] bid price got recorded somehow at the Commission's computer as $180 million." Mr. Easton added that: "We uploaded our files by our computer system here and I just checked our file, the file we uploaded is correct . . . I can fax you the files that we upload." To back up his claim, Easton then transmitted to the Commission, by facsimile, computer-generated bidding sheets which he had initialled and gave a date and time, purporting to demonstrate that PCS 2000 had actually bid $18,006,000 for License B324. 10. That same evening, Cynthia Hamilton, Mr. Easton's assistant and an employee of the San Mateo Group, Inc. (SMG), a subsidiary of RTI, telephoned a Commission staff attorney and told him that Mr. Easton had lied to the Commission about the Round 11 bid for License B324. Ms. Hamilton also told the staff attorney that Mr. Easton was destroying documents. 11. The following day, January 24, 1996, the Commission's General Counsel and the Commission staff attorney with whom Ms. Hamilton had previously spoken, called her at home to discuss the matter further. Ms. Hamilton offered to put the information conveyed in their telephone conversation in writing in the form of a sworn declaration. 12. Also on January 24, 1996, during Round 12 of the C Block auction, PCS 2000 withdrew its high bid for License B324, subjecting itself to a bid withdrawal payment equal to the difference between the withdrawn bid and the price that the license was ultimately sold for by the Commission. 13. On that same day, Ms. Hamilton sent to the Commission by facsimile a declaration sworn under the penalty of perjury. In her declaration, Ms. Hamilton set forth the events leading up to and superseding the $180 million bid by PCS 2000. Ms. Hamilton stated that PCS 2000 was late in its preparations to submit its bids on January 23, 1996. According to Ms. Hamilton, at about 9:30 a.m. PST, Mr. Easton told her that PCS 2000's bids were ready to be uploaded to the Commission's computer bidding system. She stated that Mr. Easton printed and initialled the Control P Report (Control P Report 1), at her request. Ms. Hamilton said she then reviewed the uploaded information against the signed print out, and she found it to be identical to the screen preview. Ms. Hamilton said she then printed the Screen Preview (Screen Preview 1). 14. Later that morning, according to Ms. Hamilton, Mr. Easton decided to remove three markets from PCS 2000's bid in order to get the POPs down closer to the minimum eligibility requirement for the Round 11 bid before submitting it to the Commission. She stated that pursuant to Mr. Easton's instructions, she deleted bids for three markets and printed a new copy of the Control P Report (Control P Report 2) and Screen Preview (Screen Preview 2). She further stated that Mr. Easton also initialled the new copies and discarded the old copies in a trash can. Ms. Hamilton also stated that she then downloaded the results and created a Flash Report (Flash Report 1). 15. According to Ms. Hamilton, RTI's vice president, Ronit Milstein, reviewed the Flash Report 1 and noticed that there was a bid for $110 per POP for License B324. Ms. Hamilton stated that she and Ms. Milstein then went back to Ms. Hamilton's books to verify the bid for License B324 that had been entered. Ms. Hamilton stated that she and Ms. Milstein called Mr. Easton over to discuss the $180 million bid with him. 16. Ms. Hamilton claimed that Mr. Easton then called the Commission and that she heard him say that the Commission's computer had caused an erroneous bid for the Norfolk market to be entered. Ms. Hamilton stated that she later saw a temporary employee sending, by facsimile, signed Flash Reports which no longer showed a $110 per POP bid for License B324. Ms. Hamilton said that she attempted to locate the original bidding reports and discovered that the binder in which they were ordinarily kept was missing. Ms. Hamilton then recalled that she had thrown away a copy of the Control P Report 1 and Screen Preview 1 that Mr. Easton had initialled earlier and retrieved those documents from the trash can. Mr. Easton asked Ms. Hamilton if she had taken the sheets from her trash can, to which she instead inquired whether he looked for the reports in his own office. Thereafter, Mr. Easton searched through every sheet of paper on Ms. Hamilton's desk and through the other trash cans in the office. 17. Ms. Hamilton stated that it was immediately following these events when she contacted the Wireless Telecommunications Bureau to inform the staff attorney of Mr. Easton's actions. Thereafter, she resigned from SMG, claiming she was no longer able to work there. 18. Ms. Milstein has stated that on January 24, 1996, she informed Mr. Breen that Ms. Hamilton had told her that Mr. Easton was attempting to conceal his mistake in the bid for License B324. D. PCS 2000's Meeting with Commission Staff and Bid Withdrawal Payment Request 19. On January 26, 1996, PCS 2000, apparently unaware of Ms. Hamilton's contact with the Commission, submitted a Request for Expedited Waiver or Reduction of Withdrawal Penalty for its Round 11 bid for Norfolk. While the waiver request stated that the precise cause of the erroneous bid was unknown to PCS 2000, the waiver request concluded that the Commission was not at fault. The waiver request did concede, however, that press reports stated that PCS 2000 attributed the error to the Commission, but claimed that those reports were erroneous in stating that PCS 2000 had blamed the Commission for the error. The waiver request contained an affidavit by Mr. Easton, who declared that the precise manner in which the bidding error occurred could not be ascertained. Mr. Easton, however, made several assumptions regarding how it could have happened. He stated that the bidding error could have been caused by human error, by an error introduced in the course of manually changing bids on-line in real time, or by an error introduced in transferring the data file between PCS 2000's computers or in transmitting the file over the bidding network to the Commission. Mr. Easton also claimed that PCS 2000's printers were not working adequately, and as such, "PCS 2000 did not receive any confirmation that would have timely alerted the company to the error." 20. Also on January 26, 1996, Ms. Hamilton spoke with Mr. Breen about Mr. Easton's actions. Ms. Hamilton's friend, Rosalyn Makris, was present when Ms. Hamilton spoke with Mr. Breen. Ms. Hamilton has stated that she informed Mr. Breen that Mr. Easton had made the mistake in preparing the bid and that Mr. Easton had lied to the Commission on the telephone about the bidding error. She states that she additionally told Mr. Breen that Mr. Easton changed the bids on the database and then sent those altered reports to the Commission. 21. Ms. Makris confirmed that Ms. Hamilton informed Mr. Breen about Mr. Easton's actions. Ms. Makris stated that she understood Ms. Hamilton to be telling Mr. Breen that Mr. Easton had made the bidding error and was "doing whatever was necessary to cover-up his [mistake]." Ms. Makris stated that Ms. Hamilton's comments to Mr. Breen were not ambiguous and that Mr. Breen did not appear surprised. 22. On January 29, 1996, apparently still unaware of Ms. Hamilton's contact with the Commission, PCS 2000 officials and their counsel met with Commission staff to discuss the bidding error. Mr. Lamoso, President of Unicom, and Fred Martinez, Chairman of Unicom, along with their counsel, explained that ordinarily Mr. Breen and Mr. Easton submitted the bids together. On that day, however, Mr. Breen was driving from Oregon to the RTI offices in San Mateo, California, and was not present to cross-check the bids. Moreover, the PCS 2000 participants at this meeting explained that PCS 2000's facsimile machine was overloaded and that PCS 2000 was not able to get any bid confirmations that day. They stated that PCS 2000 did not know how the error was made, but they did not attempt to blame the Commission for the error. E. Ms. Hamilton's Contact with Mr. Lamoso and the Commission's Inquiry 23. On February 5, 1996, Ms. Hamilton contacted Mr. Lamoso to inform him of Mr. Easton's actions. Ms. Hamilton stated that she told Mr. Lamoso that Mr. Easton had lied to the Commission and submitted falsified documents to the Commission. Ms. Hamilton then sent Mr. Lamoso a copy of her declaration, after telling him that she supplied the Commission with a copy. 24. On February 6, 1996, Mr. Easton voluntarily took a leave of absence from his positions as Chief Executive Officer of Unicom and as Director of Engineering of RTI. Mr. Easton additionally resigned as a bidding agent for PCS 2000. 25. On February 7, 1996, the Wireless Telecommunications Bureau sent Mr. Lamoso a letter seeking additional information pursuant to Section 308(b) of the Communications Act of 1934, as amended (the Act), 47 U.S.C.  308(b). The letter requested, among other things, detailed information about how PCS 2000 routinely prepared and submitted its bids, how PCS 2000 prepared, submitted, and later withdrew its Round 11 bid, and how PCS 2000 took steps to inform the Commission of the erroneous bid. 26. PCS 2000 retained the law firm of Young, Vogl, Harlick, Wilson & Simpson, LLP (Young, Vogl) on February 8, 1996, to conduct an investigation into the circumstances surrounding the erroneous bid. F. PCS 2000's Response to the Commission's Inquiry 27. On February 14, 1996, counsel for PCS 2000 submitted a Progress Report which, among other things, indicated that PCS 2000 had engaged the services of Price Waterhouse to conduct an audit and the law firm of Young, Vogl to conduct an investigation and submit an independent counsel report. On February 20, 1996, PCS 2000 submitted the independent counsel report to the Commission and requested that it be treated confidentially. That report is considered herein as part of the record. 28. On February 21, 1996, Mr. Lamoso, through his counsel, responded to the Commission's February 7, 1996, letter of inquiry with an 18-page declaration directed at answering the Commission's questions. Mr. Lamoso described in his declaration the manner in which PCS 2000 submitted bids. Mr. Lamoso also stated that PCS 2000's computer system would allow the bid selector to enter a bid of the minimum established bid for that round by a single key stroke or to enter a different bid manually. 29. Mr. Lamoso, who was in Puerto Rico at the time of the Round 11 bid, also explained the company's data retention procedures. Mr. Lamoso stated that Michael Gavette, the bidding program consultant, would move a copy of the network data file to a subdirectory called "archive" where it would be maintained at all times. 30. Mr. Lamoso also stated that Ms. Hamilton contacted him on February 5, 1996, and supplied him with her declaration and the copies of the Control P Report 1 and Screen Preview 1. According to Mr. Lamoso, Mr. Easton, himself, acknowledged that these reports appeared genuine. Mr. Lamoso, however, stated that the Control P Report 2 and Screen Preview 2, which were created after the three markets were withdrawn from the initial bid, were not located. 31. As for the report which was sent by facsimile to the Commission (Control P Report 3), Mr. Lamoso stated that it appears that it was prepared sometime after 11:15 a.m. PST, and not at 9:35 a.m., as indicated on its face. 32. Mr. Lamoso also stated that PCS 2000's relevant computer files containing its Round 11 bids have not been located. Although the files would have normally been moved to the archive directory, no copy of the questioned Round 11 bid was found. The Round 11 bid was also missing from Mr. Easton's computer files. Mr. Lamoso claimed that it is his understanding that Mr. Easton deleted the files, along with others, when he resigned as the bidding agent on February 7, 1996. According to Mr. Lamoso, the files were deleted and purged in a manner which has prevented the reconstruction of their contents. 33. Additionally, on February 21, 1996, PCS 2000 amended its request for a waiver of the bid withdrawal payment because, according to its counsel, the original submission made statements that "were not entirely accurate." Most significantly, the amended request omitted a statement from Mr. Easton as to his version of the events of bidding round 11. It also no longer claimed that confirmation of the bid was not received because of a printer malfunction. Furthermore, the amended waiver request no longer represented that the press reports erroneously claimed that PCS 2000 charged the error to the Commission. Finally, it no longer stated that Mr. Easton supplied the Commission with copies of spreadsheet printouts indicating the bids that PCS 2000 believed it had downloaded to the Commission. 34. Nonetheless, in its amended waiver request, PCS 2000 did still claim that Mr. Easton contacted the Commission immediately upon discovering the error to indicate that the bid should have been $18 million instead of $180 million. PCS 2000 does not elaborate on what transpired when Mr. Easton telephoned the Commission. G. Additional Easton Declaration 35. On June 28, 1996, counsel representing Mr. Easton submitted an additional sworn declaration of Mr. Easton to "supplement the record in this proceeding." In this declaration, sworn to on June 26, 1996, Mr. Easton admits that the bidding error was the fault of PCS 2000. However, Mr. Easton states that the mistake was made in one computer, transferred to a second computer, corrected in the first computer, but transmitted to the Commission via the second computer. He states that the materials he sent to the Commission by facsimile the day of the overbid were printouts from the computer which had the corrected information on it. H. PCS 2000's Amended Application and Waiver Request 36. On February 19, 1996, prior to Unicom selling its interest in PCS 2000 to SuperTel, Mr. Easton resigned as a Director and Chief Executive Officer of Unicom and agreed not to participate in the affairs of the Board of Directors. Mr. Easton also resigned as a registered bidding agent for PCS 2000, and was replaced by Daniel Parks. Thereafter, on April 26, 1996, Mr. Breen resigned from his position on the Board of Directors of Unicom. 37. On July 2, 1996, PCS 2000 submitted a major amendment to each of its 15 pending applications to reflect a substantial change in the ownership and control of its control group. Although arguing that the amendments should not be considered newly filed applications under the rules, PCS 2000 nevertheless additionally filed a request for a waiver of Section 24.823(g) of the Rules on July 2, 1996. The amendment changed the general partner of PCS 2000 from Unicom to SuperTel. As described in detail in Section II. A., supra, SuperTel's ownership is identical to Unicom's except that the 38.6% interest held by the SDE Trust is held by Richard Reiss in SuperTel, and the interest held by the Breen Family Trust has not been issued as stock. III. DISCUSSION 38. The Commission must have full confidence in the truthfulness of representations of its applicants and licensees. "[T]he Commission must rely heavily on the completeness and accuracy of the submissions made to it, and its applicants in turn have an affirmative duty to inform the Commission of the facts it needs in order to fulfill its statutory mandate." The Commission has stated that this duty is so important that the "scheme of regulation rests on the assumption that applicants will supply the Commission with accurate information." 39. Generally, breach of the duty to be truthful to the Commission takes two basic forms: (1) misrepresentation, and (2) lack of candor (failure to disclose). The former involves false statements of fact; the latter involves concealment, evasion, or other failure to be fully informative. Thus, an applicant's duty can be breached by affirmative misrepresentations and/or by a failure to come forward with a candid statement of relevant facts, whether or not such information is particularly elicited by the Commission. 40. While issues involving a licensee's character qualifications are generally resolved in the context of a hearing, in this instance, we conclude it is not in dispute that misrepresentations were made and a lack of candor has been demonstrated. As a result, there exists no material and substantial question of fact necessitating a hearing. Based on the record before us, we have sufficient information in order to make a determination that Mr. Easton, acting on behalf of PCS 2000, intentionally misrepresented facts to the Commission concerning the January 23, 1996, bid for the Norfolk market. 41. We believe that the record demonstrates that human error is responsible for PCS 2000's January 23, 1996, Round 11 bid of $180 million for the Norfolk BTA. The facts, reflected in the Control P Report 1 and Screen Preview 1 submitted by Ms. Hamilton, show that the $180 million bid originated from PCS 2000. The reports, which are initialled and dated by Mr. Easton, clearly show a $180 million bid submission for the Norfolk market. 42. Furthermore, based on our review of the factual record, we have determined that Mr. Easton, while an officer and registered bidding agent of PCS 2000, intentionally misrepresented facts to the Commission and otherwise lacked candor in his dealings with the Commission. We find that Mr. Easton attempted to mislead the Commission into believing that PCS 2000 actually bid only $18 million for the Norfolk BTA in Round 11, and that an error was made by the Commission, which resulted in the posting of the $180 million bid. Mr. Easton compounded this misrepresentation by sending to the Commission forged documents purporting to be original bidding data sheets, deleting and destroying other relevant files, and failing to reveal all of the facts as he knew them in his January 26, 1996, affidavit submitted with PCS 2000's Request for Expedited Waiver or Reduction of Withdrawal Penalty, and his later June 26, 1996, declaration. 43. Although Mr. Easton is no longer an officer or director of PCS 2000, Unicom, or RTI, and apparently has no direct or indirect ownership interest in PCS 2000, he was an officer and director at the time misrepresentations were made. Moreover, as a registered bidding agent of PCS 2000, Mr. Easton was acting on behalf of the applicant. Accordingly, we believe that PCS 2000 is ultimately responsible for the misrepresentations made by Mr. Easton. 44. These intentional deceptions by Mr. Easton must be considered breaches of the public trust. Acts of willful misrepresentation to the Commission go to the core concern of truthfulness. First, we determine that the misrepresentations were intentional. Ms. Hamilton's uncontroverted statement, which is fully supported by the Independent Counsel's Report, demonstrates that Mr. Easton knew when he called the Commission that PCS 2000, and PCS 2000 alone, was responsible for the bidding error. Despite that knowledge, Mr. Easton proceeded to attempt to place the blame for the $180 million bid on the Commission's bidding computer. He then sent to the Commission via facsimile transmission falsified documents. Mr. Easton wrote a false time on the bidding sheets he submitted to the Commission in an obvious attempt to mislead the Commission into believing that the documents were created earlier. Undeniably, the creation of false documents is an intentional act of deception. 45. Additionally, when Mr. Easton submitted his sworn statement on January 26, 1996, he knew the true nature of the bidding error, but failed to candidly convey the information to the Commission. The June 26, 1996, declaration submitted by Mr. Easton was likewise lacking in candor in several respects. First, although Mr. Easton knew that he attempted to mislead the Commission's auction personnel into believing that the bidding error was the fault of the Commission, his declaration disclaims that. Second, Mr. Easton offers no explanation why the materials faxed to the Commission on January 23, 1996, which purport to show that PCS 2000 had bid $18,006,000, and not $180,060,000, bore Mr. Easton's initials and a hand-written time beforethe mistaken bid was placed. Mr. Easton's second declaration states that what he sent to the Commission was the report he printed out from the computer which had the corrected bidding information on it after he had learned there was a bidding error. The declaration does not explain how the materials sent by Mr. Easton bore the earlier time if, as the statement would lead one to believe, Mr. Easton printed the materials from his computer after he had spoken with the Commission's auction personnel. 46. Moreover, we believe the record shows that Mr. Easton destroyed relevant documents to conceal his misrepresentations. The fact that the permanent records for bidding Round 11, the round in which the mistaken bid was made, cannot be found is telling. The destruction of documents is obviously also an intentional act. 47. Secondly, we believe the misrepresentations were serious. As stated above, the Commission must rely on the accuracy of information conveyed to it by its licensees and applicants. Mr. Easton made his misrepresentations directly to Commission auction personnel and then to the Commission as a whole in his submitted declaration. As we noted in the Character Policy Statement, we are authorized to treat even the most insignificant misrepresentations as serious. The misrepresentations made here were not insignificant. Instead, the misrepresentations bore directly on whether or not PCS 2000 should be charged with a bid withdrawal payment. Mr. Easton attempted to absolve PCS 2000 of its responsibility of making a withdrawal payment by making it appear as though it was not PCS 2000 that was at fault for the $180 million bid, but the Commission that was at fault. The misrepresentations, therefore, were of decisional significance on the issue of whether or not any withdrawal payment should be assessed against PCS 2000. 48. Although the Commission is authorized to treat misrepresentations as disqualifying, we do not believe that would serve the public interest here. PCS 2000 has taken measures to remove the wrongdoers from ownership and control of PCS 2000. First, PCS 2000 secured the resignations of Messrs. Easton and Breen from all positions held with PCS 2000. Thereafter, PCS 2000 made efforts to ensure the neither Mr. Easton, nor Mr. Breen has any ownership interest -- direct or indirect -- in PCS 2000. Because those responsible for the misdeeds are no longer associated with the company, we do not believe that disqualification is required in this instance. After learning of the deception, PCS 2000 moved quickly to take adequate remedial steps by removing from ownership and control positions those responsible for the misrepresentations. Accordingly, we have every reason to "anticipate that the future conduct of [PCS 2000] will measure up to the expectations" required upon Commission licensees. Our analysis that these remedial efforts allow us not to disqualify PCS 2000 are explained in greater detail in the companion item to this Order. 49. We do continue to have grave concerns regarding Mr. Easton's fitness to be a Commission licensee and his fitness to participate in future Commission proceedings. PCS 2000 has effectively divested Mr. Easton of his ownership interest in PCS 2000, therefore, we do not need to address that issue here. We will be addressing these concerns in a subsequent order. 50. In contrast to Mr. Easton, at this time the Commission does not know the full extent of Mr. Breen's involvement in the deception. We believe that the facts appear to demonstrate that although Mr. Breen was aware of Mr. Easton's actions, he chose not to report them to the Commission or take any other action to correct Mr. Easton's deception. At this point we make no conclusions about Mr. Breen's role in the deception. Because Mr. Breen has been effectively removed from his control and ownership positions in PCS 2000, we do not need to reach any determination at this time. We do note, however, that Mr. Breen is the majority shareholder in WestTel, L.P. (WestTel), the successful bidder in the PCS C Block reauction for the American Samoa market. Additionally, WestTel was the high bidder in PCS D, E, and F Block auctions for the U.S. Virgin Islands; Bend, OR; Klamath, OR; Twin Falls, ID; Pocatello, ID; and American Samoa. We will address our concerns regarding Mr. Breen's involvement in PCS 2000's deception in the context where Mr. Breen has an ownership and/or controlling interest in these markets, and make a determination therein of whether Mr. Breen possesses the requisite character qualifications to hold a Commission license. 51. Section 503(b) of the Act provides that the Commission is authorized to impose forfeiture penalties upon applicants who "willfully and repeatedly" fail to comply with the Act and the Rules. Willful means that the violator knew it was taking the action in question, regardless of whether there was an intent to violate the rules. Mr. Easton: 1) knew he was misrepresenting facts to the Commission when he telephoned the Commission's bidding line; 2) knew he was sending the Commission falsified documents when he sent bidding sheets by facsimile; and 3) knew he was not being fully candid with the Commission when he submitted his two statements purporting to describe events surrounding the mistaken bid. 52. Because this is a serious violation, and we count no less than three instances of misrepresentation or lack of candor connected with PCS 2000's Round 11 bidding error, we believe the maximum forfeiture allowed by statute of $1,000,000 is appropriate. We believe that eachmisrepresentation, taken alone, is of a serious enough magnitude to warrant the maximum forfeiture. However, because all three instances of misrepresentation by a PCS 2000 official relate to a single event, we are imposing a forfeiture of $1,000,000, as opposed to a $3,000,000 forfeiture. We find no downward adjustment factors present. 53. While it is true, as stated above, that PCS 2000 has taken steps to remove any direct or indirect interest Mr. Easton may have had in PCS 2000, that removal alone does not serve as a mitigating factor influencing us to reduce the amount of the forfeiture. Mr. Easton was an officer, director, and registered bidding agent and indirectly held a substantial ownership interest in PCS 2000 at the time he made the deceptions. PCS 2000, therefore, must be held accountable for the actions of its officers and directors. The removal of Mr. Easton serves as a basis instead to persuade us not to disqualify PCS 2000. IV. CONCLUSION AND ORDERING CLAUSES 54. In conclusion, we find that PCS 2000, through one of its officers and bidding agents, misrepresented facts to the Commission to cover up a mistaken bid made during Round 11 of the Commission C Block PCS auction. The misrepresentation was compounded with the submission of false documents sent to the Commission and further compounded with a sworn statement which seriously lacked candor. 55. Accordingly, pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C.  503(b), and Section 1.80 of the Commission's Rules, 47 C.F.R.  1.80, PCS 2000 IS APPARENTLY LIABLE FOR A FORFEITURE in the amount of One Million Dollars ($1,000,000) for willful and repeated violations for misrepresentations made to the Commission. The amount specified was determined after consideration of the factors set forth in Section 503(b)(2) of the Communications Act of 1934, as amended. 56. Payment of the forfeiture may be made by mailing a check or similar instrument, payable to the order of the Federal Communications Commission, Post Office Box 73482, Chicago, Illinois 60673-7482. The payment should note the File Number of the above-captioned proceeding. Payment by credit is acceptable and may be made by completing and submitting an FCC Remittance Advice (FCC Form 159) to Federal Communications Commission, Post Office Box 73482, Chicago, Illinois 60673-7482. 57. IT IS FURTHER ORDERED that a copy of this Notice SHALL BE SENT to PCS 2000, L.P. by Certified Mail, Return Receipt Requested. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary