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September 1, 2009
DA 09-1960
VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED
AND E-MAIL (edwishnow@aol.com) AND FACSIMILE (248) 258-6007
Mr. Douglas A. Benit
c/o Edward C. Wishnow
240 Daines
Birmingham, MI 48009
Re: Notice of Debarment, File No. EB-09-IH-0402
Dear Mr. Benit:
Pursuant to section 54.8 of the rules of the Federal Communications
Commission (the "Commission"), by this Notice of Debarment you are
debarred from the schools and libraries universal service support
mechanism (or "E-Rate program") for a period of three years.
On June 17, 2009, the Enforcement Bureau (the "Bureau") sent you a Notice
of Suspension and Initiation of Debarment Proceedings (the "Notice of
Suspension"). That Notice of Suspension was published in the Federal
Register on July 6, 2009. The Notice of Suspension suspended you from
participating in activities associated with or relating to the schools and
libraries universal service support mechanism and described the basis for
initiation of debarment proceedings against you, the applicable debarment
procedures, and the effect of debarment.
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 the earlier
date of your receipt of the Notice of Suspension or publication of the
Notice of Suspension in the Federal Register. The Commission did not
receive any such opposition.
As discussed in the Notice of Suspension, the United States District Court
for the Eastern District of Michigan sentenced you to serve forty-six
months in prison following your guilty plea and conviction for the federal
crime of mail fraud in connection with your role in a scheme to defraud
the Ecorse Public Schools District ("EPS") and the E-Rate program. While
employed by EPS, you devised and participated in a fraudulent scheme to
steer contracts to various companies that directly or indirectly benefited
you and your companies, including contracts involving E-Rate funds. Such
conduct constitutes the basis for your debarment, and your conviction
falls within the categories of causes for debarment under section 54.8(c)
of the Commission's rules. 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 date in the Federal Register. 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.
Sincerely,
Hillary S. DeNigro
Chief
Investigations and Hearings Division
Enforcement Bureau
cc: Taurus N. Ziedas, United States Attorney' Office, Department of
Justice (via e-mail)
Kristy Carroll, Esq., Universal Service Administrative Company (via
e-mail)
Attachment 1
June 17, 2009
DA 09-1345
VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED
AND E-MAIL (edwishnow@aol.com) AND FACSIMILE (248) 258-6007
Mr. Douglas A. Benit
c/o Edward C. Wishnow
240 Daines
Birmingham, MI 48009
Re: Notice of Suspension and Initiation of Debarment Proceedings,
File No. EB-09-IH-0402
Dear Mr. Benit:
The Federal Communications Commission ("FCC" or "Commission") has received
notice of your conviction of mail fraud, in violation of 18 U.S.C. S:S: 2,
1341, and 1346 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. On November 24,
2008, you, Douglas A. Benit, plead guilty to mail fraud in connection with
your participation in the E-Rate program. Specifically, you were employed
as a school official in the Ecorse Public Schools District ("EPS" or
"District") from 1997 to 2003, serving first as the Director of Facility
Development and subsequently as the Assistant Superintendent. While
employed at EPS, you were also an owner, employee, agent or subcontractor
of Coral Technology, Inc. ("Coral"). During your tenure at EPS, you were
responsible for approving the construction of new facilities in the
District using funds from several sources, including the E-Rate program.
You admitted that while employed at EPS and while concealing your
associations with Coral from EPS, you and others devised a scheme to
defraud the District and the E-Rate program by steering contracts for EPS
to various companies that directly or indirectly benefited you and your
companies, primarily Coral. In furtherance of the scheme, you submitted to
the Universal Service Administrative Company ("USAC") documents supporting
Coral's application for federal E-Rate funding, while employed at EPS and
within the scope of your official responsibilities. As a result of these
contracts, which were paid in part from the E-Rate program, you and your
company personally benefited from the fraudulent scheme by at least $2.276
million.
On March 31, 2009, you were sentenced to serve forty-six months in federal
prison, to be followed by thirty-six months of supervised release for your
role in the scheme to defraud EPS and the E-Rate program. You were also
ordered to pay $1.34 million in restitution for your role in the scheme.
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
Register.
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 to 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
you.
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
debarment period.
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
Rebekah Bina, Attorney Advisor, Investigations and Hearings Division,
Enforcement Bureau, Room 4-C330, with a copy to Michele Berlove, Acting
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 Rebekah Bina, 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 Michele
Berlove, Acting 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 Rebekah.Bina@fcc.gov and to
Michele.Berlove@fcc.gov.
If you have any questions, please contact Ms. Bina via mail, by telephone
at (202) 418-7931 or by e-mail at Rebekah.Bina@fcc.gov. If Ms. Bina is
unavailable, you may contact Ms. Michele Berlove, Acting Assistant Chief,
Investigations and Hearings Division, by telephone at (202) 418-1477 and
by e-mail at Michele.Berlove@fcc.gov.
Sincerely yours,
Hillary S. DeNigro
Chief
Investigations and Hearings Division
Enforcement Bureau
cc: Taurus N. Ziedas, United States Attorney' Office, Department of
Justice (via e-mail)
Kristy Carroll, Esq., Universal Service Administrative Company (via
e-mail)
47 C.F.R. S: 54.8(g) (2008). See also 47 C.F.R. S: 0.111(a)(14).
Letter from Hillary S. DeNigro, Chief, Investigations and Hearings
Division, Enforcement Bureau, Federal Communications Commission, to Mr.
Douglas Benit, Notice of Suspension and Initiation of Debarment
Proceedings, 24 FCC Rcd 8153 (Inv. & Hearings Div., Enf. Bur. 2009)
(Attachment 1)("Notice of Suspension").
74 Fed. Reg. 31947 (July 6, 2009).
See Notice of Suspension, 24 FCC Rcd at 8155-56.
See 47 C.F.R. S: 54.8 (e)(3),(4). That date occurred no later than Aug. 6,
2009. See supra note 3.
See Notice of Suspension, 24 FCC Rcd at 1854.
United States v. Douglas A. Benit, Criminal Docket No. 2:06CR20285,
Indictment, 1-4 (D. Mich. filed May 24, 2006 and entered May 25, 2006);
see also United States v. Douglas A. Benit, Criminal Docket No.
2:06CR20285-1, Plea Agreement, 2-3 (D. Mich. filed Nov. 24, 2008 and
entered Nov. 25, 2008).
47 C.F.R. S: 54.8(c). See also S: 54.8(a)(4),(b)-(e).
See 47 C.F.R. S: 54.8(e)(5),(g). See also Notice of Suspension, 24 FCC Rcd
at 1855-56.
See 47 C.F.R. S: 54.8(a)(1),(a)(5),(d),(g); Notice of Suspension, 24 FCC
Rcd at 1856.
Any further reference in this letter to "your conviction" refers to your
guilty plea and subsequent conviction of one count of mail fraud. United
States v. Douglas A. Benit, Criminal Docket No. 2:06CR20285-1, Plea
Agreement (D. Mich. filed Nov. 24, 2008 and entered Nov. 25, 2008)
("Douglas Benit Plea Agreement"); United States v. Douglas A. Benit,
Criminal Docket No. 2:06CR20285-1, Judgment (D. Mich. filed Mar. 31, 2009
and entered Apr. 1, 2009) ("Douglas Benit Judgment"). See also United
States v. Douglas A. Benit, Criminal Docket No. 2:06CR20285, Indictment
(D. Mich. filed May 24, 2006 and entered May 25, 2006) ("Benit
Indictment"). You also plead guilty to one count of bank fraud, in
violation of 18 U.S.C. S:S: 2 and 1344. See Douglas Benit Plea Agreement;
see also Douglas Benit Judgment. This notice of suspension and initiation
of debarment proceedings arises from your conviction of mail fraud, and as
such, does not discuss your guilty plea and subsequent conviction of bank
fraud.
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)).
Second Report and Order, 18 FCC Rcd at 9225, P: 66. 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).
Also known as J.D. Howen, D.J. Howen, and Jack Howen. See Douglas Benit
Indictment.
See supra note 1. See Douglas Benit Plea Agreement. See also Department of
Justice Press Release (Mar. 26, 2009), available at
http://www.usdoj.gov/criminal/npftf/pr/press_releases/2009/mar/03-26-09benit-sentenced.pdf
(DOJ March 2009 Press Release). See also Benit Indictment at 18 (Count 4).
Benit Indictment at 1-4; see also Douglas Benit Plea Agreement at 2-3.
See Benit Indictment at 3.
Id.
Id. at 1-15, 18; see also Douglas Benit Plea Agreement at 2-3.
Benit Indictment at 10-14.
See Douglas Benit Plea Agreement at 3.
See Douglas Benit Judgment at 1, 5 (ordering $1.34 million for your role
in the schemes; $489,702 in restitution to the Ecorse Public Schools and
$853,000 to USAC); see also DOJ March 2009 Press Release at 1.
47 C.F.R. S: 54.8(a)(4). See Second Report and Order, 18 FCC Rcd at
9225-27, P:P: 67-74.
47 C.F.R. S: 54.8(a)(1),(d).
Second Report and Order, 18 FCC Rcd at 9226, P: 69; 47 C.F.R. S:
54.8(e)(1).
47 C.F.R. S: 54.8(e)(4).
Id.
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:
54.8(e)(5),(f).
"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. 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
mechanism." 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:
54.8(e)(3).
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).
47 C.F.R. S: 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. 47 C.F.R. S: 54.8(f).
Second Report and Order, 18 FCC Rcd at 9225, P: 67; 47 C.F.R. S:
54.8(d),(g).
47 C.F.R. S: 54.8(g).
Mr. Douglas Benit
September 1, 2009
Page 2 of 7
Federal Communications Commission
Enforcement Bureau
Investigations and Hearings Division
445 12th Street, SW, Suite 4-C330
Washington, D.C. 20554
Mr. Douglas Benit
June 17, 2009
Page 7 of 7
Federal Communications Commission
Enforcement Bureau
Investigations and Hearings Division
445 12th Street, SW, Suite 4-C330
Washington, D.C. 20554