[Federal Register Volume 73, Number 47 (Monday, March 10, 2008)]
[Notices]
[Pages 12733-12735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-4588]


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FEDERAL COMMUNICATIONS COMMISSION

[[DA 08-300]


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

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: The Enforcement Bureau (the ``Bureau'') gives notice of Mr. 
Thomas J. Kennedy III's suspension from the schools and libraries 
universal service support mechanism (or ``E-Rate Program''). 
Additionally, the Bureau gives notice that debarment proceedings are 
commencing against him. Mr. Kennedy, or any person who has an existing 
contract with or intends to contract with him to provide or receive 
services in matters arising out of activities associated with or 
related to the schools and libraries support, may respond by filing an 
opposition request, supported by documentation to Diana Lee, Federal 
Communications Commission, Enforcement Bureau, Investigations and 
Hearings Division, Room 4-C330, 445 12th Street, SW., Washington, DC 
20554.

DATES: Opposition requests must be received by April 9, 2008 . However, 
an opposition request by the party to be suspended must be received 30 
days from the receipt of the suspension letter or April 9, 2008, 
whichever comes first. The Bureau will decide any opposition request 
for reversal or modification of suspension or debarment within 90 days 
of its receipt of such requests.

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 Bureau has suspension and debarment 
authority pursuant to 47 CFR 54.8 and 47 CFR 0.111. Suspension will 
help to ensure that the party to be suspended cannot continue to 
benefit from the schools and libraries mechanism pending resolution of 
the debarment process. Attached is the suspension letter, DA 08-300, 
which was mailed to Mr. Kennedy and released on February 6, 2008. The 
complete text of the notice of debarment 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 inspection and copying 
during regular business hours at the 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.
Trent B. Harkrader,
Deputy Chief, Investigations and Hearings Division, Enforcement Bureau.

    The attached is the Suspension and Initiation of Debarment Letter 
to Thomas J. Kennedy III.

February 6, 2008.

DA 08-300

VIA Certified Mail

Return Receipt Requested and Facsimile (203-977-7301)
    Mr. Thomas J. Kennedy III, c/o Stanley A. Twardy, Jr., Day Pitney 
LLP, One Canterbury Green, Stamford, CT 06901-2047, E-mail: 
[email protected]

Re: Notice of Suspension and Initiation of Debarment Proceedings, File 
No. EB-08-IH-0285

    Dear Mr. Kennedy: 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 54.8, 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.\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 mail fraud. United States v. Thomas J. Kennedy III, 
Criminal Docket No. 3:07-CR-186 (RNC), Plea Agreement (D. Conn. 
filed Aug. 24, 2007 and entered Aug. 27, 2007) (``Kennedy Plea 
Agreement''), Judgment (D. Conn. filed and entered Jan. 24, 2008) 
(``Kennedy Judgment'').
    \2\ 47 CFR 54.8; 47 CFR 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)).

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[[Page 12734]]

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 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 as an account manager for a company that 
had a partnership arrangement with Southwestern Bell Communications 
(``SBC''), you participated in a scheme to defraud SBC and the E-Rate 
program.\5\ You and three SBC employees, including Richard E. Brown and 
Keith J. Madeiros, decided that engineers would be hired for E-Rate 
funded projects and that the cost of these engineering services would 
be billed at inflated rates first to SBC and later to a SBC 
subcontractor.\6\ SBC paid the invoices and then submitted those 
invoices to USAC seeking excessive reimbursement from the E-rate 
funds.\7\ The invoices were inflated by more than $500,000.\8\ You 
admitted that payments for the inflated amount were split primarily 
among you, Mr. Brown, and Mr. Madeiros and that you received 
$249,525.\9\
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    \3\ See 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 CFR 54.8(a)(6).
    \4\ See Kennedy Plea Agreement at 1; United States v. Thomas J. 
Kennedy III, Criminal Docket No. 3:07-CR-186 (RNC), Information, 
paras. 7-28 (D. Conn. filed Aug. 24, 2007 and entered Aug. 27, 2007) 
(``Kennedy Information''); http://www.usdoj.gov/usao/ct/Press2008/20080123-5.html (last accessed Jan. 25, 2008) (``DOJ January 23, 
2008 Press Release'').
    \5\ See Kennedy Information at paras. 13-15; DOJ January 23, 
2008 Press Release at 1.
    \6\ See Kennedy Information at paras. 15-28; DOJ January 23, 
2008 Press Release at 1. The Bureau has debarred Richard E. Brown 
from the E-Rate program. See Letter from Hillary S. DeNigro to 
Richard E. Brown, Notice of Debarment, 22 FCC Rcd 20569 (Enf. Bur., 
Investigations & Hearings Div., rel. Nov. 27, 2007); 72 FR 73821 
(Dec. 28, 2007). The Bureau has suspended Keith J. Madeiros from the 
E-Rate program and initiated debarment proceedings against him. See 
Letter from Hillary S. DeNigro to Keith J. Madeiros, Notice of 
Suspension and Initiation of Debarment Proceedings, DA 08-129 (Enf. 
Bur., Investigations & Hearings Div., rel. Jan. 18, 2008).
    \7\ See Kennedy Information at paras. 21, 26; DOJ January 23, 
2008 Press Release at 1.
    \8\ See id.
    \9\ See id.
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    Pursuant to section 54.8(a)(4) of the Commission's rules,\10\ 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.\11\ Your suspension becomes 
effective upon the earlier of your receipt of this letter or 
publication of notice in the Federal Register.\12\
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    \10\ 47 CFR 54.8(a)(4). See Second Report and Order, 18 FCC Rcd 
at 9225-9227, paras. 67-74.
    \11\ 47 CFR 54.8(a)(1), (d).
    \12\ Second Report and Order, 18 FCC Rcd at 9226, para. 69; 47 
CFR 54.8(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.\13\ Such requests, however, will not 
ordinarily be granted.\14\ The Bureau may reverse or limit the scope of 
suspension only upon a finding of extraordinary circumstances.\15\ 
Absent extraordinary circumstances, the Bureau will decide any request 
for reversal or modification of suspension within 90 days of its 
receipt of such request.\16\
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    \13\ 47 CFR 54.8(e)(4).
    \14\ Id.
    \15\ 47 CFR 54.8(e)(5).
    \16\ See Second Report and Order, 18 FCC Rcd at 9226, para 70; 
47 CFR 54.8(e)(5), 54.8(f).
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II. Initiation of Debarment Proceedings

    Your guilty plea to and conviction of 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.\17\ Therefore, pursuant to section 
54.8(a)(4) of the Commission's rules, your conviction requires the 
Bureau to commence debarment proceedings against you.
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    \17\ ``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, the high-
cost support mechanism, the rural healthcare support mechanism, and 
the low-income support mechanism.'' 47 CFR 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 mechanisms.'' 47 CFR 
54.8(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.\18\ Absent 
extraordinary circumstances, the Bureau will debar you.\19\ 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.\20\ 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.\21\
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    \18\ See Second Report and Order, 18 FCC Rcd at 9226, para 70; 
47 CFR 54.8(e)(3).
    \19\ Second Report and Order, 18 FCC Rcd at 9227, para 74.
    \20\ See id., 18 FCC Rcd at 9226, para 70; 47 CFR 54.8(e)(5).
    \21\ 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 54.8(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.\22\ The Bureau may, if necessary to protect the 
public interest, extend the debarment period.\23\
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    \22\ Second Report and Order, 18 FCC Rcd at 9225, para 67; 47 
CFR 54.8(d), 54.8(g).
    \23\ Id.
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    Please direct any response, if by messenger or hand delivery, to 
Marlene

[[Page 12735]]

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].

Trent B. Harkrader,
Deputy Chief, Investigations and Hearings Division, Enforcement Bureau.

cc: Kristy Carroll, Esq., Universal Service Administrative Company (via 
e-mail) Anthony E. Kaplan, Esq., Supervisory Assistant United States 
Attorney Calvin B. Kurimai, Esq., Assistant United States Attorney
 [FR Doc. E8-4588 Filed 3-7-08; 8:45 am]
BILLING CODE 6712-01-P