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                                October 18, 2011

                                                                   DA 11-1733

   SENT  VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED

   AND EMAIL

   Mr. Jeremy R. Sheets

   c/o Mr. Martin E. Crandall

   Clark Hill PLC

   500 Woodward Ave., Suite 3500

   Detroit, MI 48226-3435

   Re: Notice of Suspension and Initiation of Debarment Proceedings,

   File No. EB-11-IH-1122

   Dear Mr. Sheets:

   The Federal Communications Commission ("Commission") has received notice
   of your conviction of wire fraud in violation of 18 U.S.C S: 1343 in
   connection with your participation in the federal 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 the Bureau will commence
   debarment proceedings against you.

   I. Notice of Suspension

   The Commission 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. The E-Rate
   program rules require school applicants to pay a percentage of the total
   cost of eligible goods and services requested for funding. To ensure a
   fair and competitive bidding process, the E-Rate program rules also
   prohibit a service provider from soliciting or offering gifts or donations
   to a school applicant, and likewise prohibit a school applicant from
   accepting gifts or donations from a service provider participating in the
   E-Rate program, with the exception of certain de minimis gifts or
   charitable donations unrelated to E-Rate procurement activities.

   On January 24, 2011, you pled guilty to wire fraud in connection with a
   scheme you devised and participated in to defraud the federal E-Rate
   program. For a six-year period beginning in December 2001, as president
   and co-owner of CMS Internet LLC ("CMS") you induced two prospective
   school district applicants in Western Michigan to hire CMS as their E-Rate
   vendor by (1) falsely representing to the applicants that they could
   participate in the program at no cost to them; (2) compensating the school
   districts for their E-Rate expenses with either purported "donations" or
   "leasing payments" that were calculated to coincide with the amount of
   each school's non-discounted share of E-Rate expenses; and (3) submitting
   materially false and fraudulent applications to order ineligible and
   undisclosed goods and services that were paid for out of overcharges to
   the E-Rate program. In further violation of the E-Rate rules, you gave
   gifts to a school district employee that included a wide screen television
   and entertainment system, which you paid for through overcharges to the
   E-Rate program.

   Furthermore, in responding to an audit conducted in 2006 by the Universal
   Service Administration Company ("USAC"), you transmitted by electronic
   mail fraudulent invoices that falsely stated a school district applicant
   had paid its share of E-Rate program expenses during 2006-2007. In
   addition, you failed to disclose that E-Rate funding was used to purchase
   ineligible goods and services. Finally, you obstructed a 2007 federal
   grand jury investigation by instructing a CMS employee to testify falsely
   before the grand jury about receiving gifts, and to destroy E-Rate program
   records and remove the hard drives located on that employee's work and
   home computer in exchange for new computer hard drives. Your scheme caused
   the E-Rate program to suffer an estimated loss between $30,000 and
   $70,000. These actions constitute the conduct or transactions upon which
   this suspension notice and debarment proceeding are based.

   On June 21, 2011, the United States District Court for the Western
   District of Michigan sentenced you to serve 15 months in prison followed
   by two years of supervised release for defrauding the federal E-Rate
   program. The court also prohibited you from "having any involvement with
   any government-backed or federally-regulated programs during the course of
   supervision." Finally, the court ordered you to pay a $12,000 fine, in
   addition to compensating USAC by paying $115,534 in restitution.

   Pursuant to section 54.8(b) of the Commission's rules, upon your
   conviction, the Bureau is required to suspend you from participating in
   any 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. Your suspension becomes effective
   upon receipt of this letter or publication of the notice in the Federal
   Register, whichever comes first.

   In accordance with the Commission's debarment rules, you may contest this
   suspension or the scope of this suspension by filing arguments, with any
   relevant documents, within 30 calendar days after receipt of this letter
   or after a 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 to reverse or modify a suspension within 90
   calendar days of its receipt of such request.

   II. Initiation of Debarment Proceedings

   As discussed above, your guilty plea and conviction of criminal conduct in
   connection with the E-Rate program serves as a basis for immediate
   suspension from the program, as well as a basis to commence debarment
   proceedings against you. Conviction of criminal fraud is cause for
   debarment. Therefore, pursuant to section 54.8(b) of the rules, your
   conviction requires the Bureau to commence debarment proceedings against
   you.

   As with the suspension process, you may contest the proposed debarment or
   the scope of the proposed debarment by filing arguments and any relevant
   documentation within 30 calendar days of receipt of this letter or
   publication in the Federal Register, whichever comes first. The Bureau, in
   the absence of extraordinary circumstances, will notify you of its
   decision to debar within 90 calendar days of receiving any information you
   may have filed. If the Bureau decides to debar you, its decision will
   become effective upon either your receipt of a debarment notice or
   publication of the decision in the Federal Register, whichever comes
   first.

   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 set a longer debarment period or extend an existing
   debarment period if necessary to protect the public interest.

   Please direct any response, if sent by messenger or hand delivery, to
   Marlene H. Dortch, Secretary, Federal Communications Commission, 445 12th
   Street, S.W., Room TW-A325, Washington, D.C. 20554, to the attention of
   Joy M. Ragsdale, Attorney Advisor, Investigations and Hearings Division,
   Enforcement Bureau, Room 4-A236, with a copy to Theresa Z. Cavanaugh,
   Acting Division Chief, Investigations and Hearings Division, Enforcement
   Bureau, Room 4-C322, Federal Communications Commission. All messenger or
   hand delivery filings must be submitted without envelopes. If sent by
   commercial overnight mail (other than U.S. Postal Service (USPS) Express
   Mail and Priority Mail), the response must be sent to the Federal
   Communications Commission, 9300 East Hampton Drive, Capitol Heights,
   Maryland 20743. If sent by USPS First Class, Express Mail, or Priority
   Mail, the response should be addressed to Joy Ragsdale, Attorney Advisor,
   Investigations and Hearings Division, Enforcement Bureau, Federal
   Communications Commission, 445 12th Street, S.W., Room 4-A236, Washington,
   D.C. 20554, with a copy to Theresa Z. Cavanaugh, Acting Division Chief,
   Investigations and Hearings Division, Enforcement Bureau, Federal
   Communications Commission, 445 12th Street, S.W., Room 4-C322, Washington,
   D.C. 20554. You shall also transmit a copy of your response via e-mail to
   Joy M. Ragsdale, joy.ragsdale@fcc.gov  and to Theresa Z. Cavanaugh,
   Terry.Cavanaugh@fcc.gov.

   If you have any questions, please contact Ms. Ragsdale via U.S. postal
   mail, e-mail, or by telephone at (202) 418-7931. You may contact me at
   (202) 418-1420 or at the email addressed noted above if Ms. Ragsdale is
   unavailable.

   Sincerely yours,

   Theresa Z. Cavanaugh

   Acting Chief

   Investigations and Hearings Division

   Enforcement Bureau

   cc: Johnnay Schrieber, Universal Service Administrative Company (via
   e-mail)

   Rashann Duvall, Universal Service Administrative Company (via email)

   Jason C. Turner, Antitrust Division, United States Department of Justice
   (via email)

   Jennifer M. Dixton, Antitrust Division, United States Department of
   Justice (via email)

   Meagan D. Johnson, Antitrust Division, United States Department of Justice
   (via email)

   Any further reference in this letter to "your conviction" refers to your
   conviction in United States v. Jeremy R. Sheets, Criminal Docket No.
   1:10-cr-380-1, Judgment (W.D. Mi. 2011) ("Judgment").

   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 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; Rural
   Health Care 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 App. C at 16410-12 (2007) (Program Management
   Order) (section 54.521 of the universal service debarment rules was
   renumbered as section 54.8 and subsections (a)(1), (5), (c), (d),
   (e)(2)(i), (3), (e)(4), and (g) were amended.)

   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).

   47 C.F.R. S: 54.503 (2010).

   47 C.F.R. S: 54.503(d) (2010). See also, Schools and Libraries Universal
   Service Support Mechanism, A National Broadband Plan for Our Future, Sixth
   Report and Order, 25 FCC Rcd 18762 P:P: 88-90 (2010), clarified by,
   Schools and Libraries Universal Service Support Mechanism, A National
   Broadband Plan for Our Future, Order, 25 FCC Rcd 17324 (2010).

   United States v. Jeremy R. Sheets, Case No. 1:10-cr-380, Criminal Minute
   Sheet (W.D. Mi. 2011). See Justice News, Dep't of Justice, Michigan
   Businessman Sentenced to 15 months in Prison for Defrauding the Federal
   E-Rate Program, July 18, 2011, at
   http://www.justice.gov/opa/pr/2011/July/11-at-935.html ("Press Release").

   CMS Internet, LLC provides internet access and related technology services
   to various school districts that participate in the federal E-Rate
   program. See U.S. v. Sheets, Case No. 1:10-cr-380, Felony Information at 1
   (W.D. Mi. 2010) ("Felony Information").

   United States v. Jeremy R. Sheets, Case No. 1:10-cr-380, Plea Agreement at
   3 (W.D. Mi. 2010) ("Plea Agreement").

   In July 2004, Mr. Sheets donated $20,458.25 to one school district, and
   purported to "lease" the other school district's radio towers with the
   intent to repay the school districts for their share of E-Rate expenses.
   Id.; Felony Information at 3.

   Plea Agreement at 4.

   Id. at 5.

   Id.

   Id. at 5-7.

   Id. at 4.

   Second Report and Order, 18 FCC Rcd at 9226, P: 70; 47 C.F.R. S:
   54.8(e)(2)(i).

   Judgment at 3.

   Id. A condition of your supervised release includes forfeiting all
   monetary claims pending under contract with other E-Rate school
   applicants. Telephone Conversation with Jason Turner, Lead Counsel, Dep't
   of Justice, Antitrust Division (Aug. 10, 2011).

   Judgment at 5. You were also ordered to immediately pay a $100 Special
   Assessment. Id.

   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:
   54.8(e)(1).

   47 C.F.R. S: 54.8(e)(4).

   Id.

   47 C.F.R. S: 54.8(f).

   Second Report and Order, 18 FCC Rcd at 9226, P: 70; 47 C.F.R. S:S:
   54.8(e)(5), (f).

   "Causes for suspension and debarment are 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). Associated 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).

   47 C.F.R. S: 54.8(b).

   Second Report and Order, 18 FCC Rcd at 9226, P: 70; 47 C.F.R. S:
   54.8(e)(3).

   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:
   54.8(d), (g).

   Id.

   See FCC Public Notice, DA 09-2529 for further filing instructions (rel.
   Dec. 3, 2009).

   Jeremy R. Sheets

   October 18, 2011

   Page 2 of 5

                       Federal Communications Commission

                               Enforcement Bureau

                      Investigations and Hearings Division

                       445 12th Street, SW, Suite 4-C330

                             Washington, D.C. 20554