[Federal Register Volume 73, Number 119 (Thursday, June 19, 2008)]
[Notices]
[Pages 34932-34934]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-13893]


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FEDERAL COMMUNICATIONS COMMISSION

[DA 08-1176]


Notice of Debarment; Schools and Libraries Universal Service 
Support Mechanism

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: The Enforcement Bureau debars Mr. Thomas J. Kennedy III from 
the schools and libraries universal service support mechanism (or ``E-
Rate Program'') for a period of three years based on your conviction of 
mail fraud in connection with your participation in the program. The 
Bureau takes this action in order to protect the E-Rate Program from 
waste, fraud and abuse.

DATES: Debarment commences on the date Mr. Thomas J. Kennedy III 
receives the debarment letter or June 19, 2008, whichever date come 
first, for a period of threes 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 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].

SUPPLEMENTARY INFORMATION: The Bureau debarred Mr. Thomas J. Kennedy 
III from the schools and libraries universal service support mechanism 
for a period of three years pursuant to 47 CFR 54.8 and 47 CFR 
0.111(a). Attached is the debarment letter, DA 08-1176, which was 
mailed to Mr. Thomas J. Kennedy III and released on May 16, 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.
Hillary S. DeNigro,
Chief, Investigations and Hearings Division, Enforcement Bureau.
    The debarment letter follows:

May 16, 2008.

DA 08-1176.

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.

Re: Notice of Debarment, File No. EB-08-IH-0285

    Dear Mr. Kennedy: Pursuant to section 54.8 of the rules of the 
Federal Communications Commission (the ``Commission''), by this 
Notice of Debarment you are debarred from the schools and libraries 
universal service support mechanism (or ``E-Rate program'') for a 
period of three years.\1\
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    \1\ See 47 CFR 0.111(a), 54.8.
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    On February 6, 2008, the Enforcement Bureau (the ``Bureau'') 
sent you a Notice of Suspension and Initiation of Debarment 
Proceedings (the ``Notice of Suspension'').\2\ That Notice of 
Suspension was published in the Federal Register on March 10, 
2008.\3\ The Notice of Suspension suspended you from the schools and 
libraries universal service support mechanism and described the 
basis for initiation of debarment proceedings against you, the 
applicable debarment procedures, and the effect of debarment.\4\
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    \2\ Letter from Hillary S. DeNigro, Chief, Investigations and 
Hearings Division, Enforcement Bureau, Federal Communications 
Commission, to Mr. Thomas J. Kennedy III, Notice of Suspension and 
Initiation of Debarment Proceedings, 23 FCC Rcd 1669 (Inv. & 
Hearings Div., Enf. Bur. 2008) (Attachment 1).
    \3\ 73 FR 12733 (March 10, 2008).
    \4\ See Notice of Suspension, 23 FCC Rcd at 1670-72.
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    Pursuant to the Commission's rules, any opposition to your 
suspension or its scope or to your proposed debarment or its scope 
had to be filed with the Commission no later than thirty (30) 
calendar days from the earlier date of your receipt of the Notice of 
Suspension or publication of the Notice of Suspension in the Federal 
Register.\5\ The Commission did not receive any such opposition.
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    \5\ See 47 CFR 54.8 (e)(3) and (4). That date occurred no later 
than April 9, 2008. See supra note 3.
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    As discussed in the Notice of Suspension, you pled guilty to and 
were convicted of mail fraud, in violation of 18 U.S.C. 1341, for 
your participation in the E-Rate program.\6\ You admitted to 
participating in a scheme to defraud the E-Rate program by, among 
other things, taking actions with other co-schemers to ensure that 
costs for services on E-rate projects would be billed at inflated 
rates, which in turn led to inflated invoices being submitted to the 
Universal Service Administrative Company for reimbursement from the 
E-rate program.\7\ Such conduct constitutes the basis for your 
debarment, and your conviction falls within the categories of causes 
for debarment under section 54.8(c) of the Commission's rules.\8\ 
For the foregoing reasons, you are hereby debarred for a period of 
three years from the debarment date, i.e., the earlier date of your 
receipt of this Notice of Debarment or its publication date in the 
Federal Register.\9\ Debarment excludes you, for the debarment 
period, from 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.'' \10\
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    \6\ See Notice of Suspension, 23 FCC Rcd at 1670.
    \7\ See id. In addition to Richard E. Brown, the Bureau debarred 
Keith J. Madeiros, both former SBC account managers participating in 
the scheme, from the E-Rate program. See Letter from Hillary S. 
DeNigro to Keith J. Madeiros, Notice of Debarment, DA 08-1177 (Enf. 
Bur., Investigations & Hearings Div., rel. May 16, 2008).
    \8\ Id. at 1670; 47 CFR 54.8(c).
    \9\ See Notice of Suspension, 23 FCC Rcd at 1672.
    \10\ See 47 C.F.R. 54.8(a)(1), 54.8(a)(5), 54.8(d); Notice of 
Suspension, 23 FCC Rcd at 1672.
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    Sincerely,

Hillary S. DeNigro,
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.

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].

[[Page 34933]]

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'').\11\ 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.\12\
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    \11\ 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'').
    \12\ 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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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.\13\ 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.\14\ 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.\15\ 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.\16\ SBC paid the 
invoices and then submitted those invoices to USAC seeking excessive 
reimbursement from the E-rate funds.\17\ The invoices were inflated 
by more than $500,000.\18\ You admitted that payments for the 
inflated amount were split primarily among you, Mr. Brown, and Mr. 
Madeiros and that you received $249,525.\19\
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    \13\ 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).
    \14\ 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'').
    \15\ See Kennedy Information at paras. 13-15; DOJ January 23, 
2008 Press Release at 1.
    \16\ 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).
    \17\ See Kennedy Information at paras. 21, 26; DOJ January 23, 
2008 Press Release at 1.
    \18\ See id.
    \19\ See id.
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    Pursuant to section 54.8(a)(4) of the Commission's rules,\20\ 
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.\21\ Your suspension becomes effective upon the earlier of 
your receipt of this letter or publication of notice in the Federal 
Register.\22\
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    \20\ 47 CFR 54.8(a)(4). See Second Report and Order, 18 FCC Rcd 
at 9225-9227, paras. 67-74.
    \21\ 47 CFR 54.8(a)(1), (d).
    \22\ 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.\23\ Such requests, however, will 
not ordinarily be granted.\24\ The Bureau may reverse or limit the 
scope of suspension only upon a finding of extraordinary 
circumstances.\25\ Absent extraordinary circumstances, the Bureau 
will decide any request for reversal or modification of suspension 
within 90 days of its receipt of such request.\26\
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    \23\ 47 CFR 54.8(e)(4).
    \24\ Id.
    \25\ 47 CFR 54.8(e)(5).
    \26\ 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.\27\ 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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    \27\ ``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.\28\ Absent 
extraordinary circumstances, the Bureau will debar you.\29\ 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.\30\ 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.\31\ 
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.\32\ The Bureau may, if necessary to protect the 
public interest, extend the debarment period.\33\
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    \28\ See Second Report and Order, 18 FCC Rcd at 9226, para. 70; 
47 CFR 54.8(e)(3).
    \29\ Second Report and Order, 18 FCC Rcd at 9227, para. 74.
    \30\ 30 See id., 18 FCC Rcd at 9226, para. 70; 47 CFR 
54.8(e)(5).
    \31\ 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).
    \32\ Second Report and Order, 18 FCC Rcd at 9225, para. 67; 47 
CFR 54.8(d), 54.8(g).
    \33\ Id.

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[[Page 34934]]

    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, S.W., 
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,

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. E8-13893 Filed 6-18-08; 8:45 am]
BILLING CODE 6712-01-P