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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.