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October 10, 2012
DA 12-1620
SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND EMAIL
Ms. Denisa Babcock
c/o Leon Fred Spies
Mellon & Spies
312 E. College Street, Suite 216
Iowa City, IA 52240
Re: Notice of Suspension and Initiation of Debarment Proceedings
FCC File No. EB-12-IH-1396
Dear Ms. Babcock:
The Federal Communications Commission (Commission) has received notice of
your conviction, under 18 U.S.C. S: 666(a)(1)(A) and (b), for theft of,
among other amounts, funds associated with 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 E-Rate program 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 [E-Rate program]" from receiving the
benefits associated with that program. The Commission's rules are designed
to ensure that all E-Rate funds are used for their intended purpose.
On May 11, 2011, you pled guilty to converting more than $1,000,000
belonging to various school districts for your personal use from November
2005 through December 2009. That amount included approximately $49,000 in
E-Rate checks that had been payable to school districts you represented
through your E-Rate consulting company, Camanche Consulting Services
(CCS). According to your Plea Agreement, you knowingly deposited E-Rate
checks payable to these school districts into your personal bank accounts
without the authority to do so. Along with the other funds stolen from the
various school districts, you used these stolen E-Rate funds to help pay
off your home mortgage, fund retirement plans, and purchase vehicles, real
property, a boat, travel, and personal items.
On October 14, 2011, the United States District Court for the Southern
District of Iowa sentenced you to serve 64 months in prison followed by a
three-year period of supervised release. In addition, the court ordered
you to pay $1,330,215.96 in restitution and a $100 special assessment.
Pursuant to Section 54.8(b) of the Commission's rules, upon your
conviction for theft of E-Rate funds, the Bureau is required to suspend
you from participating in any activities associated with or related to the
E-Rate program, including the receipt of funds or discounted services
through the E-Rate program, or consulting with, assisting, or advising
applicants or service providers regarding the E-Rate program. Your
suspension becomes effective upon either your receipt of this letter or
its publication in the Federal Register, whichever comes first.
In accordance with the Commission's suspension and debarment rules, you
may contest this suspension or the scope of this suspension by filing
arguments, with any relevant documents, within thirty (30) calendar days
of your receipt of this letter or its publication in the Federal Register,
whichever comes first. Such requests, however, will not ordinarily be
granted. The Bureau may reverse or limit the scope of a suspension only
upon a finding of extraordinary circumstances. The Bureau will decide any
request to reverse or modify a suspension within ninety (90) calendar days
of its receipt of such request.
II. Initiation of Debarment Proceedings
In addition to requiring your immediate suspension from the E-Rate
program, your conviction is cause for debarment as defined in Section
54.8(c) of the Commission's rules. Therefore, pursuant to Section 54.8(b)
of the Commission's 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 thirty (30) calendar days of receipt of this letter
or its 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 ninety (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 E-Rate
program 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 and to the attention of
Joy M. Ragsdale, Attorney Advisor, Investigations and Hearings Division,
Enforcement Bureau, Room 4-C330, Federal Communications Commission, 445
12th Street, S.W., Washington, D.C. 20554 with a copy to Theresa Z.
Cavanaugh, Division Chief, Investigations and Hearings Division,
Enforcement Bureau, Room 4-C330, Federal Communications Commission, 445
12th Street, S.W., Washington, D.C. 20554. 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-C330, Washington, D.C. 20554, with a copy to
Theresa Z. Cavanaugh, Chief, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, 445 12th Street,
S.W., Room 4-C330, 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) 418-1697. You may contact me at
(202) 418-1553 or at the e-mail address noted above if Ms. Ragsdale is
unavailable.
Sincerely yours,
Theresa Z. Cavanaugh
Chief
Investigations and Hearings Division
Enforcement Bureau
cc: Johnnay Schrieber, Universal Service Administrative Company (via
e-mail)
Rashann Duvall, Universal Service Administrative Company (via e-mail)
Maureen McGuire, United States Attorney's Office, Southern District of
Iowa (via e-mail)
Richard Westphal, United States Attorney's Office, Southern District of
Iowa (via e-mail)
Any further reference in this letter to "your conviction" refers to your
guilty plea in United States v. Babcock, Criminal Docket No.
3:10-cr-00074-RP-TJS-1, Plea Agreement (S.D. Iowa, May 11, 2011) (Plea
Agreement).
47 C.F.R. S: 54.8; 47 C.F.R. S: 0.111 (delegating to the Bureau authority
to resolve universal service suspension and debarment proceedings). The
Commission adopted debarment rules for the E-Rate program 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, 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), (a)(5), (c), (d), (e)(2)(i),
(e)(3), (e)(4), and (g).)
Second Report and Order, 18 FCC Rcd at 9225, para. 66; Program Management
Order, 22 FCC Rcd at 16387, para. 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).
NEC-Business Network Solutions, Inc., Notice of Debarment and Order
Denying Waiver Petition, 21 FCC Rcd 7491, 7493, para. 7 (2006).
Plea Agreement at 1, 17-18; see also United States Attorney's Office,
southern District of iowa, News, Former Clinton Community School District
Employee Pleads Guilty to Theft of Federal Funds, May 11, 2011, at
http://www.justice.gov/usao/ias/news/2011/Babcock%20-%20plea%20-%20media%20release%20-%205-10-11.pdf
(Press Release).
Plea Agreement at 17.
Id.
Id. at 18.
United States v. Babcock, Criminal Docket No. 3:10-cr-00074-RP-TJS-1,
Amended Judgment at 2 (S.D. Iowa, entered Jan. 23, 2012) (Amended
Judgment).
Amended Judgment at 4-5. This restitution order includes: $8,061.77
payable to Bement Community School District Five; $2,231.28 payable to the
Chester Area School District; $21,789.40 payable to the Lena-Winslow
School District; $17,933.80 payable to North Boone School District 200;
$1,852.03 payable to Oldham Public Library; and $4,270.64 payable to West
Carroll Community School District No. 314. Id. at 4. In addition, you were
ordered to forfeit, among other items, E-Rate checks that FBI agents had
seized from your residence. Plea Agreement at 6-7.
47 C.F.R. S: 54.8(a)(4); see Second Report and Order, 18 FCC Rcd at
9225-27, paras. 67-74.
47 C.F.R. S:S: 54.8(a)(1), (d).
Second Report and Order, 18 FCC Rcd at 9226, para. 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, para. 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." Id. S: 54.8(a)(1).
Id. S: 54.8(b).
Second Report and Order, 18 FCC Rcd at 9226, para. 70; 47 C.F.R. S:
54.8(e)(3).
Second Report and Order, 18 FCC Rcd at 9226, para. 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. Id. S: 54.8(f).
Second Report and Order, 18 FCC Rcd at 9225, para. 67; 47 C.F.R. S:
54.8(d), (g).
47 C.F.R. S: 54.8(g).
See FCC Public Notice, DA 09-2529 for further filing instructions (rel.
Dec. 3, 2009).
Ms. Denisa Babcock
October 10, 2012
Page 2
WASHINGTON, DC 20554
FEDERAL COMMUNICATIONS COMMISSION
Enforcement Bureau
Investigations and Hearings Division