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March 22, 2012
DA 12-452
SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND EMAIL
Ms. Gloria F. Harper
c/o Ms. Cynthia Marie Cimino
Federal Public Defender
Hale Boggs Federal Building
500 Poydras St., Room 318
New Orleans, LA 70130
Re: Notice of Suspension and Initiation of Debarment Proceeding
File No. EB-12-IH-0400
Dear Ms. Harper:
The Federal Communications Commission (Commission or FCC) has received
notice of your guilty plea for conspiracy to defraud the United States in
violation of 18 U.S.C S: 371 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 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. Schools may receive E-Rate program
funding for eligible goods and services by filing application forms,
seeking competitive bids, and selecting the most cost-effective vendor.
The E-Rate program rules require school applicants to pay a percentage of
the total cost of eligible goods and services requested for funding. The
E-Rate program rules prohibit an E-Rate vendor or anyone associated with
an E-Rate vendor from participating in the application process or vendor
selection.
On June 6, 2011, you pled guilty to knowingly and willfully orchestrating
multiple fraudulent schemes and conspiring with others to defraud the
E-Rate program through the submission of materially false and fraudulent
documents, concealment of material facts, and obstruction and manipulation
of the competitive bidding process involving schools and school districts
located in six states. You participated in the conspiracy as the owner of
Computer Training and Associates (CTA) and co-owner of Global Networking
Technologies, Inc. (GNT). Specifically, from approximately December 2001
through September 2005, you and a co-conspirator violated E-Rate program
rules by completing, submitting, and fraudulently signing E-Rate program
applications (FCC Forms 470, 471, and 486) on behalf of school applicants.
You also conspired to bribe school officials in exchange for their ceding
control of the schools' competitive bidding processes to your companies.
In further violation of the E-Rate rules, you promised school applicants
that their required payments would be waived if they chose CTA or GNT as
the schools' E-Rate service provider. You also did not disclose your
involvement in the application process or the promised waivers to the
Universal Service Administrative Company. CTA and GNT directly benefited
from your fraudulent schemes by receiving approximately $4.5 million in
E-Rate contracts. These actions constitute the conduct or transactions
upon which this suspension notice and proposed debarment are based.
On February 9, 2012, the United States District Court for the Eastern
District of Louisiana sentenced you to serve 30 months in prison followed
by three years of supervised release for conspiring to defraud the federal
E-Rate program in multiple states. The court also ordered you to pay a
$100 special assessment.
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 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
receipt of this letter or publication of notice of the letter 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
after receipt of this letter or after publication of notice of it 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. 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
As discussed above, your guilty plea and conviction of criminal conduct in
connection with the E-Rate program is the basis for your immediate
suspension from the program as well as a basis to commence debarment
proceedings against you. Conviction of criminal fraud 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 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 publication of notice of it 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, 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) 418-1697. 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
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 e-mail)
Juan Rodriguez, Antitrust Division, United States Department of Justice
(via e-mail)
Stephanie Toussaint, Antitrust Division, United States Department of
Justice (via e-mail)
Any further reference in this letter to "your conviction" refers to your
guilty plea and subsequent sentencing for conspiracy to defraud the United
States in United States v. Gloria F. Harper, Criminal Docket No.
2:10-cr-00326-CJB-ALC, Plea Agreement (E.D. La. filed June 2, 2011 and
entered June 6, 2011) (Plea Agreement).
47 C.F.R. S: 54.8.
Id. S: 0.111 (delegating to the Enforcement 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, App. C at 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, 118 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).
47 C.F.R. S:S: 54.504, 54.511(c).
Id. S:S: 54.505, 54.523.
See Request for Review by Mastermind Internet Services, Inc.,
Federal-State Joint Board on Universal Service, Changes to the Board of
Directors of the National Exchange Carrier Association, Inc., CC Docket
No. 96-45, Order, 16 FCC Rcd 4028, 4032-33 paras. 10-12 (2000) (Mastermind
Order) (finding that when an applicant surrenders control of the bidding
process to an employee of an entity that will also participate in the
bidding process as a prospective service provider, the applicant
irreparably impairs its ability to hold a fair and open competitive
bidding process); see also Universal Service Administrative Company's
description of an Open and Fair Competitive Bidding Process at
http://www.universalservice.org/sl/applicants/step03/run-open-fair-competition.aspx.
Plea Agreement at 4-5. The conspiracy involved schools and school
districts located throughout Arkansas, Florida, Illinois, Louisiana, North
Dakota, and Texas. See Appendix.
See United States v. Gloria F. Harper, Criminal Docket No.
2:10-cr-00326-CJB-ALC, Factual Basis at 2, 4 (E.D. La. filed June 2, 2011)
(Factual Basis).
Id.
Id. at 3. These bribes included $28,500 in payments to school officials in
Louisiana and Arkansas; a $79,382 payment to a school agent in Florida;
and a $10,000 payment to a school agent in Illinois. Id. at 3-4.
Factual Basis at 4; see also United States v. Gloria F. Harper, Criminal
Docket No. 2:10-cr-00326-CJB-ALC, Information at 7 (E.D. La. filed Nov.
18, 2011).
Factual Basis at 4.
Id.
Second Report and Order, 18 FCC Rcd at 9226, para. 70; 47 C.F.R. S:
54.8(e)(2)(i). The Bureau has already debarred two co-conspirators, Tyrone
Pipkin and Barrett C. White, from participating in the E-Rate program. See
Tyrone Pipkin, File No. EB-11-IH-1071, Notice of Debarment, 26 FCC Rcd
16822 (Enf. Bur. 2011); Barrett C. White, Notice of Debarment, 26 FCC Rcd
16047 (Enf. Bur. 2011); see also Justice News, Dep't of Justice, Former
Owner of Illinois Technology Company Sentenced to Serve 30 Months in
Prison for Role in Multi-State Scheme to Defraud Federal E-Rate Program,
February 9, 2012, at
http://www.justice.gov/opa/pr/2012/February/12-at-189.html.
United States v. Gloria F. Harper, Criminal Docket No.
2:10-cr-00326-CJB-ALC, Judgment at 2-3 (filed Feb. 9, 2012). The prison
term will run concurrent with any sentence imposed in the Northern
District of Illinois, Criminal Docket No. 11-479. Id. at 2.
Id. at 5.
47 C.F.R. S: 54.8(b); see Second Report and Order, 18 FCC Rcd at 9225-27,
paras. 67-74.
47 C.F.R. 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.
Id. S: 54.8(f).
See Second Report and Order, 18 FCC Rcd at 9226, para. 70; 47 C.F.R.
S: 54.8(e)(5).
"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).
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. 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).
Id. S: 54.8(g).
See FCC Announces Change in Filing Location for Paper Documents, Public
Notice, 24 FCC Rcd 14312 (2009) for further filing instructions.
Ms. Gloria F. Harper
March 22, 2012
Page 2
WASHINGTON, DC 20554
FEDERAL COMMUNICATIONS COMMISSION
Enforcement Bureau
Investigations and Hearings Division