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                                                       DA 03-4088

VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED

Mr. John Angelides
Chief Executive Officer
Connect2 Internet Networks, Inc.
26 Bay Street
Staten Island, NY 10301

     Re:  Notice of Debarment, File No. EB-03-IHD-0376.

Dear Mr. Angelides:

     Pursuant to section 54.521 of the rules of the Federal 
Communications Commission (the ``Commission''), by this Notice of 
Debarment you are hereby debarred from the schools and libraries 
universal service support mechanism for a period of three years.1  

     On August 21, 2003, the Enforcement Bureau (the ``Bureau'') 
sent you a Notice of Suspension and Proposed Debarment (the 
``Notice of Suspension'').2  That Notice of Suspension was 
published in the Federal Register on October 2, 2003.3  The 
Notice of Suspension suspended you from the schools and libraries 
universal service support mechanism4 and described the basis for 
your proposed debarment,5 the applicable debarment procedures,6 
and the effect of debarment.7

     Pursuant to the Commission's rules, any opposition to your 
suspension or its scope or to your proposed debarment or its 
scope had to be filed with the Commission no later than thirty 
(30) calendar days from your receipt of the Notice of Suspension 
or publication of the Notice of Suspension in the Federal 
Register, whichever came first.8  On or about September 22, 2003, 
the Bureau granted your request to extend the time to contest 
issues raised in the Notice of Suspension until October 14, 
2003.9  The Bureau received your response on that date.10  Your 
Response explicitly states that you do not challenge your 
debarment.11  The Response merely ``emphasizes'' that this 
proceeding is directed ``only against Mr. Angelides.''12  The 
Bureau notes that the Notice of Suspension and the Notice of 
Debarment are addressed to and applicable to you, Mr. Angelides, 
individually, and not to any other person or entity.  Such 
limitation does not bar the Commission from taking additional 
enforcement action, subject to its rules, against such other 
persons or entities.

     As discussed in the Notice of Suspension, on May 22, 2003, 
you pled guilty to charges of falsely representing to schools 
that they could participate in the E-Rate program at no cost, 
falsely representing to fund administrators and Government 
investigators that the schools would pay or had paid their 
unsubsidized share, falsifying documents, and attempting to 
persuade school administrators not to reveal evidence to 
Government investigators in order to conceal the scheme.13  Such 
conduct constitutes the basis for your debarment, and your 
conviction falls within the categories of causes for debarment 
under section 54.521(c) of the Commission's rules.14  For the 
foregoing reasons, you are hereby debarred for a period of three 
years from the debarment date, i.e., the earlier date of your 
receipt of this Notice of Debarment or its publication in the 
Federal Register.15  Debarment excludes you, for the debarment 
period, from activities ``associated with or related to the 
schools and libraries support mechanism,'' including ``the 
receipt of funds or discounted services through the schools and 
libraries support mechanism, or consulting with, assisting, or advising applicants or service 
providers regarding the schools and libraries support 
mechanism.''16

          
                                   Sincerely yours,
     


                                   William H. Davenport
                                   Deputy Chief
                                   Investigations and Hearings 
Division
                                   Enforcement Bureau

cc:  Mark S. Cohen, Cohen & Gressler, LLP (Via E-mail and United 
States Mail)
     Kristy Carroll, USAC (Via E-mail)



                Federal Communications Commission
                     Washington, D.C. 20554


                         August 21, 2003
                                                       DA 03-2707

VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED

Mr. John Angelides
Chief Executive Officer
Connect2 Internet Networks, Inc.
26 Bay Street
Staten Island, NY 10301

     Re:  Notice of Suspension and of Proposed Debarment, 
          File No. EB-03-IHD-0376.

Dear Mr. Angelides:

     The Federal Communications Commission (``FCC'' or 
``Commission'') has received notice of your May 22, 2003 
conviction under 18 U.S.C.  371 for conspiracy to commit an 
offense against or to defraud the United States.  Specifically, 
you were convicted of conspiracy to violate the following laws of 
the United States:  (1) 18 U.S.C.  287 (false, fictitious, and 
fraudulent claims); (2) 18 U.S.C. 1001 (false statements and 
entries generally); and (3) 18 U.S.C.  1343 (fraud by wire, 
radio, or television).17  Consequently, pursuant to 47 C.F.R. 
54.521, this letter constitutes official notice of your 
suspension from the schools and libraries universal service 
support mechanism.  In addition, the Enforcement Bureau 
(``Bureau'') hereby notifies you that we are commencing debarment 
proceedings against you.18

I.   Notice of Suspension
                                   
     Pursuant to section 54.521(a)(4) of the Commission's 
rules,19 your conviction requires the Bureau to suspend you from 
participating in any activities associated with or related to the 
schools and libraries fund mechanism, including the receipt of 
funds or discounted services through the schools and libraries 
fund mechanism, or consulting with, assisting, or advising 
applicants or service providers regarding the schools and 
libraries support mechanism.20  Your suspension becomes effective 
upon the earlier of your receipt of this letter or publication of 
notice in the Federal Register.21  

     Suspension is immediate pending the Bureau's final debarment 
determination.  You may contest this suspension or the scope of 
this suspension by filing arguments in opposition to the 
suspension, with any relevant documentation.  Your request must 
be received within 30 days after you receive this letter or after 
notice is published in the Federal Register, whichever comes 
first.22  Such requests, however, will not ordinarily be 
granted.23  The Bureau may reverse or limit the scope of 
suspension only upon a finding of extraordinary circumstances.24  
Absent extraordinary circumstances, the Bureau will decide any 
request for reversal or modification of suspension within 90 days 
of its receipt of such request.25  

II.  Notice of Proposed Debarment

     II.A.     Reasons for and Cause of Debarment 

     The Commission's rules establish procedures to prevent 
persons who have ``defrauded the government or engaged in similar 
acts through activities associated with or related to the schools 
and libraries support mechanism'' from receiving the benefits 
associated with that program.26  On May 22, 2003, you admitted, 
among other things, to selling eligible services to certain 
participating schools through your company Connect2, imposing 100 
percent of the cost on the E-Rate program.  You admitted to each 
of the following acts:  (1) falsely representing to the schools 
that they could participate in the program at no cost to them; 
(2) falsely representing to fund administrators and Government 
investigators that the schools would pay or had paid their 
unsubsidized share; and (3) falsifying documents, as well as 
attempting to persuade school administrators not to reveal 
evidence to Government investigators, in order to conceal the 
scheme.27  These actions constitute the conduct or transactions 
upon which this debarment proceeding is based.28  
     Moreover, your conviction on the basis of these acts falls 
within the categories of causes for debarment defined in section 
54.521(c) of the Commission's rules.29  Therefore, pursuant to 
section 54.521(a)(4) of the Commission's rules, your conviction 
requires the Bureau to commence debarment proceedings against 
you.  

     II.B.     Debarment Procedures

     You may contest debarment or the scope of the proposed 
debarment by filing arguments and any relevant documentation 
within 30 calendar days of the earlier of the receipt of this 
letter or of publication in the Federal Register.30  Absent 
extraordinary circumstances, the Bureau will debar you.31  Within 
90 days of receipt of any opposition to your suspension and 
proposed debarment, the Bureau, in the absence of extraordinary 
circumstances, will provide you with notice of its decision to 
debar.32  If the Bureau decides to debar you, its decision will 
become effective upon the earlier of your receipt of a debarment 
notice or the publication of its decision in the Federal 
Register.33  

     II.C.     Effect of Debarment

     If and when your debarment becomes effective, you will be 
prohibited from participating in activities associated with or 
related to the schools and libraries support mechanism for at 
least three years from the date of debarment.34  The Bureau may, 
if necessary to protect the public interest, extend the debarment 
period.35 
     
     Please direct any responses to the following address:

Diana Lee
Federal Communications Commission
Enforcement Bureau
Investigations and Hearings Division
Room 6-C326
445 12th Street, S.W.
Washington, D.C.  20554

If you submit your response via hand-delivery or non-United 
States Postal Service delivery (e.g., Federal Express, DHL, 
etc.), please send your response to Ms. Lee at the following 
address:

Federal Communications Commission
9300 East Hampton Drive
Capitol Heights, MD  20743

If you have any questions, please contact Ms. Lee via mail, by 
telephone at (202) 418-1420 or 
by e-mail at diana.lee@fcc.gov.  If Ms. Lee is unavailable, you 
may contact William Davenport by telephone at (202) 418-1420 and 
by e-mail at william.davenport@fcc.gov.
     
                                   Sincerely yours,


                                   Maureen F. Del Duca
                                   Chief
                                   Investigations and Hearings 
Division
                                   Enforcement Bureau


cc:  Mark S. Cohen, Cohen & Gressler, LLP
     Kristy Carroll, USAC
     

_________________________

1 See 47 C.F.R.  0.111(a)(14), 54.521.
2 Letter from Maureen F. Del Duca, Chief, Investigations 
and Hearings Division, Enforcement Bureau, Federal 
Communications Commission, to John Angelides, Notice of 
Suspension and Proposed Debarment, 18 FCC Rcd 16672 (2003) 
(Attachment 1).
3 68 Fed.Reg. 56837 (Oct. 2, 2003).
4 See Notice of Suspension, 18 FCC Rcd at 16672-73 
(imposing suspension pending the Bureau's final debarment 
determination).
5 See id., 18 FCC Rcd at 16673 (describing the basis for 
your proposed debarment).  
6 See id., 18 FCC Rcd at 16674 (describing procedures to 
contest proposed debarment).
7 See id., 18 FCC Rcd at 16674 (describing effect of 
proposed debarment).
8 See 47 C.F.R.  54.521(e)(3) and (4).
9 Letter from Karen H. Broomberg, Cohen & Gresser LLP, to 
Diana Lee, Investigations and Hearings Division, Enforcement 
Bureau, Federal Communications Commission, dated Sep. 22, 
2003. 
10   Letter from Mark S. Cohen, Cohen & Gresser LLP, to 
Diana Lee, Investigations and Hearings Division, Enforcement 
Bureau, Federal Communications Commission, dated Oct. 14, 
2003 (the ``Response'').
11   Response at 1 (stating, ``Mr. Angelides does not 
challenge his individual debarment.'').  
12   Id.
13   Notice of Suspension, 18 FCC Rcd at 16673.
14   Notice of Suspension, 18 FCC Rcd at 16674; 47 C.F.R.  
54.521(c).
15   See Notice of Suspension, 18 FCC Rcd at 16674.
16   See 47 C.F.R,  54.521(a)(1), 54.521(a)(5), 54.521(d); 
Notice of Suspension, 18 FCC Rcd at 16674.
17Any further reference in this letter to ``your 
conviction'' refers to your May 22, 2003 guilty plea and 
conviction on this count based on your fraudulent scheme to 
obtain schools and libraries E-Rate program funds.  See 
United States v. Angelides, Docket No. 1:03cr635, Felony 
Information (S.D.N.Y. filed May 20, 2003) (``Angelides 
Felony Information'').  
1847 C.F.R.  54.521; 47 C.F.R.  0.111(a)(14) (delegating 
to the Enforcement Bureau authority to resolve universal 
service suspension and debarment proceedings pursuant to 47 
C.F.R.  54.521).
1947 C.F.R.  54.521(a)(4).  See Schools and Libraries 
Universal Service Support Mechanism, Second Report and Order 
and Further Notice of Proposed Rulemaking, 18 FCC Rcd 9202, 
9225-9227,  67-74 (2003) (``Second Report and Order'').
20Second Report and Order, 18 FCC Rcd at 9225,  67; 47 
U.S.C.  254; 47 C.F.R  54.502-54.503; 47 C.F.R. 
54.521(a)(4).
21Second Report and Order, 18 FCC Rcd at 9226,  69; 47 
C.F.R.  54.521(e)(1).
22Second Report and Order, 18 FCC Rcd at 9226,  70; 47 
C.F.R.  54.521(e)(4).
23Second Report and Order, 18 FCC Rcd at 9226,  70.
2447 C.F.R.  54.521(f).
25Second Report and Order, 18 FCC Rcd at 9226,  70; 47 
C.F.R.  54.521(e)(5), 54.521(f).
26Second Report and Order, 18 FCC Rcd at 9225,  66.
27See Angelides Felony Information at 3-11.
28Second Report and Order, 18 FCC Rcd at 9226,  70; 47 
C.F.R.  54.521(e)(2)(i).
29``Causes for suspension and debarment are the 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.''  47 C.F.R. 54.521(c).  Such 
activities ``include the receipt of funds or discounted 
services through the schools and libraries support 
mechanism, or consulting with, assisting, or advising 
applicants or service providers regarding schools and 
libraries support mechanism described in this section ([47 
C.F. R.]  54.500 et seq.).''  47 C.F.R.  54.521(a)(1).
30Second Report and Order, 18 FCC Rcd at 9226,  70; 47 
C.F.R.  54.521(e)(2)(i), 54.521(e)(3). 
31Second Report and Order, 18 FCC Rcd at 9227,  74.
32   Second Report and Order, 18 FCC Rcd at 9226,  70; 47 
C.F.R.  54.521(e)(5).
33Id.  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.  47 C.F.R.  54.521(f).
34Second Report and Order, 18 FCC Rcd at 9225,  67; 47 
C.F.R.  54.521(d), 54.521(g).
35   Id.