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May 19, 2008
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED AND FACSIMILE (415-773-5759)
Mr. William Holman
c/o Melinda Haag, Esq.
Orrick, Herrington & Sutcliffe, LLP
The Orrick Building
405 Howard Street
San Francisco, CA 94105-2669
Re: Notice of Suspension and Initiation of Debarment Proceedings,
File No. EB-08-IH-1142
Dear Mr. Holman:
The Federal Communications Commission ("FCC" or "Commission") has received
notice of your conviction of bid rigging, in violation of 15 U.S.C S: 1,
in connection with your participation in the schools and libraries
universal service support mechanism ("E-Rate program"). Consequently,
pursuant to 47 C.F.R. S: 54.8, this letter constitutes official notice of
your suspension from the E-Rate program. In addition, the Enforcement
Bureau ("Bureau") hereby notifies you that we are commencing debarment
proceedings against you.
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 schools and libraries support mechanism"
from receiving the benefits associated with that program. You pled guilty
to bid rigging in connection with your participation in the Ceria Travis
Academy E-Rate project (the "Project"). Specifically, you admitted that,
as former vice president of sales for NEC Business Networks, Inc.
("NEC-BNS"), you entered into and engaged in a conspiracy with NEC-BNS and
other co-conspirators to suppress and eliminate competition by submitting
non-competitive bids for the Project and taking steps to ensure that the
Project was awarded to NEC-BNS and co-conspirators.
Pursuant to section 54.8(a)(4) of the Commission's rules, 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. Your suspension becomes effective upon the earlier of
your receipt of this letter or publication of notice in the Federal
Suspension is immediate pending the Bureau's final debarment
determination. In accordance with the Commission's debarment rules, 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. Such requests, however, will not ordinarily be
granted. The Bureau may reverse or limit the scope of suspension only upon
a finding of extraordinary circumstances. Absent extraordinary
circumstances, the Bureau will decide any request for reversal or
modification of suspension within 90 days of its receipt of such request.
II. Initiation of Debarment Proceedings
Your guilty plea and conviction of criminal conduct in connection with the
E-Rate program, in addition to serving as a basis for immediate suspension
from the program, also serves as a basis for the initiation of debarment
proceedings against you. Your conviction falls within the categories of
causes for debarment defined in section 54.8(c) of the Commission's rules.
Therefore, pursuant to section 54.8(a)(4) of the Commission's rules, your
conviction requires the Bureau to commence debarment proceedings against
As with your suspension, 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. Absent extraordinary circumstances,
the Bureau will debar you. 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. If the Bureau decides to debar you, its decision will become
effective upon the earlier of your receipt of a debarment notice or
publication of the decision in the Federal Register.
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 three years from the date of debarment.
The Bureau may, if necessary to protect the public interest, extend the
Please direct any response, if by messenger or hand delivery, to Marlene
H. Dortch, Secretary, Federal Communications Commission, 236 Massachusetts
Avenue, N.E., Suite 110, Washington, D.C. 20002, to the attention of Diana
Lee, Attorney Advisor, Investigations and Hearings Division, Enforcement
Bureau, Room 4-C330, with a copy to Vickie Robinson, Assistant Chief,
Investigations and Hearings Division, Enforcement Bureau, Room 4-C330,
Federal Communications Commission. If sent by commercial overnight mail
(other than U.S. Postal Service Express Mail and Priority Mail), the
response should be sent to the Federal Communications Commission, 9300
East Hampton Drive, Capitol Heights, Maryland 20743. If sent by
first-class, Express, or Priority mail, the response should be sent to
Diana Lee, Attorney Advisor, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, 445 12th Street,
S.W., Room 4-C330, Washington, DC, 20554, with a copy to Vickie Robinson,
Assistant Chief, Investigations and Hearings Division, Enforcement Bureau,
Federal Communications Commission, 445 12th Street, S.W., Room 4-C330,
Washington, DC, 20554. You shall also transmit a copy of the response via
email to firstname.lastname@example.org and to email@example.com.
If you have any questions, please contact Ms. Lee via mail, by telephone
at (202) 418-1420 or by e-mail at firstname.lastname@example.org. If Ms. Lee is
unavailable, you may contact Ms. Vickie Robinson, Assistant Chief,
Investigations and Hearings Division, by telephone at (202) 418-1420 and
by e-mail at email@example.com.
Hillary S. DeNigro
Investigations and Hearings Division
cc: Kristy Carroll, Esq., Universal Service Administrative Company (via
Michael Wood, Antitrust Division, United States Department of Justice
Any further reference in this letter to "your conviction" refers to your
guilty plea and subsequent conviction of bid rigging. See United States v.
William Holman, Criminal Docket No. 3:05-CR-00208-CRB-012, Judgment
(N.D.Cal. filed Apr. 9, 2008 and entered Apr. 9, 2008) ("Holman
Judgment"), Substitute Information (N.D.Cal. filed and entered Apr. 5,
2007) ("Holman Substitute Information"). See also generally United States
v. Video Network Communications, Inc. et al., Criminal Docket No.
3:05-CR-00208-CRB, Superseding Indictment (N.D.Cal. filed Dec. 8, 2005 and
entered Dec. 12, 2005), http://www.usdoj.gov/atr/cases/f213600/213626.htm
(accessed May 1, 2008) ("VNCI Superseding Indictment").
47 C.F.R. S: 54.8; 47 C.F.R. S: 0.111 (delegating to the Enforcement
Bureau authority to resolve universal service suspension and debarment
proceedings). The Commission adopted debarment rules for the schools and
libraries universal service support mechanism 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 section 54.521 to suspend and debar parties
from the E-rate program). In 2007, the Commission extended the debarment
rules to apply to all of the 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;
Lifeline and Link Up; Changes to the Board of Directors for the National
Exchange Carrier Association, Inc., Report and Order, 22 FCC Rcd 16372,
16410-12 (2007) (Program Management Order) (renumbering section 54.521 of
the universal service debarment rules as section 54.8 and amending
subsections (a)(1), (5), (c), (d), (e)(2)(i), (3), (e)(4), and (g)).
See Second Report and Order, 18 FCC Rcd at 9225, P: 66; Program Management
Order, 22 FCC Rcd at 16387, P: 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 C.F.R. S: 54.8(a)(6).
See Holman Judgment at 1; Holman Substitute Information at P: 4 .
See id. The Commission debarred NEC-BNS in 2006 for the company's wire
fraud and bid rigging conviction. See NEC Business Network Solutions,
Inc., Notice to Debarment, 21 FCC Rcd 7491 (2006); 71 Fed. Reg. 42398
(2006). The following four individuals, who were also charged in the VNCI
Superseding Indictment, have pled guilty or been found guilty, and
subsequently sentenced: Judy Green, Earl Nelson, George Marchelos, and
Allan Green. We are sending separate notices of suspension and initiation
of debarment proceedings to these individuals. VNCI is now defunct and
charges against the company have been dropped.
47 C.F.R. S: 54.8(a)(4). See Second Report and Order, 18 FCC Rcd at
9225-9227, P:P: 67-74.
47 C.F.R. S:S: 54.8(a)(1), (d).
Second Report and Order, 18 FCC Rcd at 9226, P: 69; 47 C.F.R. S:
47 C.F.R. S: 54.8(e)(4).
47 C.F.R. S: 54.8(e)(5).
See Second Report and Order, 18 FCC Rcd at 9226, P: 70; 47 C.F.R. S:S:
"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,
the high-cost support mechanism, the rural healthcare support mechanism,
and the low-income support mechanism." 47 C.F.R. S: 54.8(c). Such
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." 47 C.F.R. S: 54.8(a)(1).
See Second Report and Order, 18 FCC Rcd at 9226, P: 70; 47 C.F.R. S:
Second Report and Order, 18 FCC Rcd at 9227, P: 74.
See id., 18 FCC Rcd at 9226, P: 70; 47 C.F.R. S: 54.8(e)(5).
Id. 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. S: 54.8(f).
Second Report and Order, 18 FCC Rcd at 9225, P: 67; 47 C.F.R. S:S:
Mr. William Holman
May 19, 2008
Page 2 of 4
Federal Communications Commission
Investigations and Hearings Division
445 12th Street, SW, Suite 4-C330
Washington, D.C. 20554