[Federal Register Volume 72, Number 195 (Wednesday, October 10, 2007)]
[Notices]
[Pages 57574-57576]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-19922]


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FEDERAL COMMUNICATIONS COMMISSION

[DA 07-4036]


Notice of Suspension and of Proposed Debarment Proceedings; 
Schools and Libraries Universal Service Support Mechanism

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: The Federal Communications Commission (the ``Commission'') 
debars Mr. Brown from the schools and libraries universal service 
support mechanism for a period of three years because of violation of 
18 U.S.C. 1341. Therefore, the Enforcement Bureau is commencing 
debarment proceedings against him.

DATES: Debarment commences on the date Mr. Richard E. Brown receives 
the debarment letter or October 10, 2007, whichever date come first, 
for a period of three years.

FOR FURTHER INFORMATION CONTACT: Diana Lee, Federal Communications 
Commission, Enforcement Bureau, Investigations and Hearings Division, 
Room 4-C330, 445 12th Street, SW., Washington, DC 20554. Diana Lee may 
be contacted by phone at (202) 418-0843 or e-mail at [email protected]. 
If Ms. Lee is unavailable, you may contact Ms. Vickie Robinson, 
Assistant Chief, Investigations and Hearings Division, by telephone at 
(202) 418-1420 and by e-mail at [email protected].

SUPPLEMENTARY INFORMATION: The Commission debarred Mr. Brown from the 
schools and libraries universal service support mechanism for a period 
of three years pursuant to 47 CFR 521 and 47 CFR 0.111(a)(14). Attached 
is the debarment letter, Notice of Suspension and Initiation of 
Debarment Proceedings, DA 07-4036, which was mailed to Mr. Brown and 
released on September 25, 2007. The complete text of the notice of 
suspension and initiation of debarment proceedings, is available for 
public inspection and copying during regular business hours at the FCC 
Reference Information Center, Portal II, 445 12th Street, SW., Room CY-
A257, Washington, DC 20554, In addition, the complete text is available 
on the FCC's Web site at http://www.fcc.gov. The text may also be 
purchased from the Commission's duplicating contractor, Best Copy and 
Printing, Inc., Portal II, 445 12th Street, SW., Room CY-B420, 
Washington, DC 20554, telephone (202) 488-5300 or (800) 378-3160, 
facsimile (202) 488-5563, or via e-mail http://www.bcpiweb.com.

Federal Communications Commission.
Hillary S. DeNigro,
Chief, Investigations and Hearings Division, Enforcement Bureau.
    The suspension letter follows:

September 25, 2007.
[DA 07-4036]
Via Certified Mail--Return Receipt Requested and E-Mail.

Mr. Richard E. Brown, c/o Douglas McNabb, Esq., McNabb Associates 
PC, JP Morgan Chase Tower, 600 Travis Street, Suite 7070, Houston, 
TX 77002.

Re: Notice of Suspension and Initiation of Debarment Proceedings, 
File No. EB-07-IH-5369.

Dear Mr. Brown: The Federal Communications Commission (``FCC'' or 
``Commission'') has received notice of your conviction for mail 
fraud in violation of 18 U.S.C. 1341 in connection with your 
participation in the schools and libraries universal service support 
mechanism (``E-Rate program'').\1\ Consequently, pursuant to 47 CFR 
54.521, 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.\2\
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    \1\ Any further reference in this letter to ``your conviction'' 
refers to your February 13, 2007 guilty plea and subsequent 
conviction of three counts of mail fraud. United States v. Richard 
E. Brown, Criminal Docket No. 3:07-CR-29 (RNC), Plea Agreement 
(D.Conn. filed Feb. 13, 2007 and entered Feb. 14, 2007) (``Brown 
Plea Agreement''); United States v. Richard E. Brown, 3:07-CR-29 
(RNC), Judgment (D.Conn. filed Sept. 6, 2007 and entered Sept. 7, 
2007) (``Brown Judgment'').
    \2\ 47 CFR 54.521; 47 CFR 0.111(a)(14) (delegating to the 
Enforcement Bureau authority to resolve universal service suspension 
and debarment proceedings pursuant to 47 CFR 54.521).

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[[Page 57575]]

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.\3\ You pled guilty to three counts of mail fraud for 
activities in connection with your participation in the E-Rate 
program involving telecommunications upgrade projects in four 
Connecticut school districts.\4\ While employed at Southwestern Bell 
Communications (``SBC''), the prime contractor servicing these 
school districts, you recommended subcontractors to perform 
telecommunications upgrades in four Connecticut school districts. 
You also reviewed invoices submitted by the subcontractors to SBC 
for payment that SBC then submitted to the Universal Service 
Administrative Company (``USAC'') for reimbursement from the E-Rate 
fund.\5\ You admitted to participating in schemes to defraud the E-
Rate program where fictitious bills for upgrades that were never 
performed were submitted to USAC for reimbursement from the E-Rate 
fund.\6\ In another fraudulent scheme in which you admitted to being 
a participant, engineering services for upgrade projects were billed 
at inflated rates and the associated invoices were also submitted to 
USAC for E-Rate reimbursement.\7\ In sum, these schemes generated 
approximately $1,564,768 in fictitious expenses and approximately 
$956,203 of these expenses ultimately were submitted to the USAC for 
reimbursement from E-Rate fund.\8\
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    \3\ See Schools and Libraries Universal Service Support 
Mechanism, Second Report and Order and Further Notice of Proposed 
Rulemaking, 18 FCC Rcd 9202, 9225, ] 66 (2003) (``Second Report and 
Order''). 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 CFR 54.521(a)(6).
    \4\ See generally United States v. Richard E. Brown, Criminal 
Docket No. 3:07-CR-29 (RNC), Information (D.Conn. filed and entered 
Jul. 28, 2006) (``Information''); Brown Plea Agreement at 1; Brown 
Judgment at 1.
    \5\ See Information at 2-3.
    \6\ See Information at 1-8.
    \7\ See Information at 8-10.
    \8\ See Information at 3, 5, 8; http://www.usdoj.gov/usao/ct/Press2007/20070829-3.html (Department of Justice Press Release dated 
August 29, 2007) (last accessed September 12, 2007) (``DOJ August 29 
Press Release''). See also Letter from Hillary S. DeNigro, Chief, 
Investigations and Hearings Division, Enforcement Bureau, Federal 
Communications Commission, to Scott A. Federowicz, c/o Paul H.D. 
Stoughton, Conway & Stoughton, LLP, Notice of Suspension and 
Initiation of Debarment Proceedings, File No. EB-07-IH-5171, (rel. 
June 27, 2007) (``Federowicz Suspension Letter''); 72 FR 39425 (Jul. 
18, 2007).
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    Pursuant to section 54.521(a)(4) of the Commission's rules,\9\ 
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.\10\ Your suspension becomes effective upon the earlier of 
your receipt of this letter or publication of notice in the Federal 
Register.\11\
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    \9\ 47 CFR 54.521(a)(4). See Second Report and Order, 18 FCC Rcd 
at 9225-9227, ]] 67-74 (2003).
    \10\ Second Report and Order, 18 FCC Rcd at 9225, ] 67; 47 
U.S.C. 254; 47 CFR 54.502-54.503; 47 CFR 54.521(a)(4).
    \11\ Second Report and Order, 18 FCC Rcd at 9226, ] 69; 47 CFR 
54.521(e)(1).
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    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.\12\ Such requests, however, will 
not ordinarily be granted.\13\ The Bureau may reverse or limit the 
scope of suspension only upon a finding of extraordinary 
circumstances.\14\ Absent extraordinary circumstances, the Bureau 
will decide any request for reversal or modification of suspension 
within 90 days of its receipt of such request.\15\
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    \12\ Second Report and Order, 18 FCC Rcd at 9226, ] 70; 47 CFR 
54.521(e)(4).
    \13\ Second Report and Order, 18 FCC Rcd at 9226, ] 70.
    \14\ 47 CFR 54.521(e)(5).
    \15\ See Second Report and Order, 18 FCC Rcd at 9226, ] 70; 47 
CFR 54.521(e)(5), 54.521(f).
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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 54.521(c) of the Commission's rules.\16\ Therefore, pursuant 
to section 54.521(a)(4) of the Commission's rules, your conviction 
requires the Bureau to commence debarment proceedings against you.
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    \16\ ``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 CFR 
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 CFR] Sec.  54.500 et seq.).'' 47 CFR 
54.521(a)(1).
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    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.\17\ Absent 
extraordinary circumstances, the Bureau will debar you.\18\ 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.\19\ 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.\20\
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    \17\ See Second Report and Order, 18 FCC Rcd at 9226, ] 70; 47 
CFR 54.521(e)(2)(i), 54.521(e)(3).
    \18\  Second Report and Order, 18 FCC Rcd at 9227, ] 74.
    \19\ See id., 18 FCC Rcd at 9226, ] 70; 47 CFR 54.521(e)(5).
    \20\ 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 CFR 54.521(f).
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    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.\21\ The Bureau may, if necessary 
to protect the public interest, extend the debarment period.\22\
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    \21\ Second Report and Order, 18 FCC Rcd at 9225, ] 67; 47 CFR 
54.521(d), 54.521(g).
    \22\ Id.
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    Please direct any response, if by messenger or hand delivery, to 
Marlene H. Dortch, Secretary, Federal Communications Commission, 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002, to the 
attention of Diana Lee, Attorney Advisor, Investigations and 
Hearings Division, Enforcement Bureau, Room 4-C330, with a copy to 
Vickie Robinson, 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 Diana Lee, 
Attorney Advisor, Investigations and Hearings Division, Enforcement 
Bureau, Federal Communications Commission, 445 12th Street, SW., 
Room 4-C330, Washington, DC 20554, with a copy to Vickie Robinson, 
Assistant Chief, Investigations and Hearings Division, Enforcement 
Bureau, Federal Communications Commission, 445 12th Street, SW., 
Room 4-C330, Washington, DC 20554. You shall also transmit a copy of 
the response via e-mail to [email protected] and to 
[email protected].
    If you have any questions, please contact Ms. Lee via mail, by 
telephone at (202) 418-1420 or by e-mail at [email protected]. If 
Ms. Lee is unavailable, you may contact Ms. Vickie Robinson, 
Assistant Chief, Investigations and Hearings Division, by telephone 
at (202) 418-1420 and by e-mail at [email protected].

    Sincerely yours,


[[Page 57576]]


Hillary S. DeNigro,
Chief, Investigations and Hearings Division, Enforcement Bureau.

cc: Calvin B. Kurimai, Esq., Assistant United States Attorney.
Kristy Carroll, Esq., Universal Service Administrative Company (via 
e-mail).

 [FR Doc. E7-19922 Filed 10-9-07; 8:45 am]
BILLING CODE 6712-01-P