[Federal Register Volume 75, Number 14 (Friday, January 22, 2010)]
[Notices]
[Pages 3732-3734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-1219]


-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

[DA 10-35]


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

AGENCY: Federal Communications Commission.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Enforcement Bureau (the ``Bureau'') gives notice of Mr. 
Leonard Douglas LaDuron'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. LaDuron, 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 Rebekah Bina, 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 February 22, 2010. 
However, an opposition request by the party to be suspended must be 
received 30 days from the receipt of the suspension letter or February 
22, 2010, 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.

ADDRESSES: Federal Communications Commission, Enforcement Bureau,

[[Page 3733]]

Investigations and Hearings Division, Room 4-C330, 445 12th Street, 
SW., Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Rebekah Bina, Federal Communications 
Commission, Enforcement Bureau, Investigations and Hearings Division, 
Room 4-C330, 445 12th Street, SW., Washington, DC 20554. Rebekah Bina 
may be contacted by phone at (202) 418-7931 or e-mail at 
[email protected]. If Ms. Bina is unavailable, you may contact Ms. 
Michele Levy Berlove, Acting Assistant Chief, Investigations and 
Hearings Division, by telephone at (202) 418-1477 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(a)(14). 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 10-35, 
which was mailed to Mr. LaDuron and released on January 12, 2010. 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 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 suspension letter follows:

January 12, 2010.
DA 10-35

Via Certified Mail Return Receipt Requested and e-mail (law.com">jmorris@bowse-law.com) and facsimile (913) 649-9399

Mr. Leonard Douglas LaDuron, c/o Jeffrey D. Morris, Berkowitz Oliver 
Williams Shaw & Eisenbrandt, LLP, 4200 Somerset, Suite 150, 
Prairie Village, KS 66208-5213.

Re: Notice of Suspension and Initiation of Debarment Proceedings, File 
No. EB-10-IH-0108

    Dear Mr. LaDuron: The Federal Communications Commission (``FCC'' or 
``Commission'') has received notice of your guilty plea for conspiracy 
to commit mail fraud, wire fraud and making false statements in 
violation of 18 U.S.C. 2, 371, 1341, 1343 and 1001 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\
---------------------------------------------------------------------------

    \1\ Any further reference in this letter to ``your conviction'' 
refers to your guilty plea and subsequent conviction of counts one 
and three for conspiracy to commit mail fraud, wire fraud and making 
false statements. United States v. Leonard Douglas LaDuron, Criminal 
Docket No. 2:08CR20055-001-KHV, Petition to Enter Plea (D. Kan. 
filed June 29, 2009 and entered June 30, 2009) (``Leonard LaDuron 
Plea''); United States v. Leonard Douglas LaDuron, Criminal Docket 
No. 2:08CR20055-001-KHV, Judgment (D. Kan. filed and entered Dec. 
23, 2009) (``Leonard LaDuron Judgment''). See also United States v. 
Leonard Douglas ``Doug'' LaDuron, Criminal Docket No. 2:08CR20055-
001-KHV, Indictment, 1-10, 11-14 (D. Kan. filed Apr. 24, 2009 and 
entered Apr. 25, 2009) (Counts 1 and 3) (``LaDuron Indictment'').
    \2\ 47 CFR Sec.  54.8. See also 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 of the Commission's rules 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)).
---------------------------------------------------------------------------

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\ On June 29, 2009, you, Leonard Douglas LaDuron,\4\ pleaded 
guilty to conspiracy to commit mail fraud, wire fraud, and making false 
statements in connection with your participation in the E-Rate 
program.\5\ Specifically, between 1999 and 2003, you held yourself out 
as an E-Rate consultant and salesperson for the purpose of defrauding 
the E-Rate Program.\6\ You admitted that you and others devised a 
scheme to defraud school districts and the E-Rate program by steering 
contracts to various companies that directly benefited you, your 
conspirators, and your companies, primarily Elephantine Corporation, 
Serious ISP, Inc., and Myco Technologies, Inc.\7\ In furtherance of the 
scheme, you submitted fraudulent and false documents to the Universal 
Service Administrative Company (``USAC'') claiming schools were paid or 
would pay their co-pay, submitted other materially false and fraudulent 
documents, and concealed your true identities, ownerships, and 
relationships from the school districts to induce schools to select 
your companies as service providers in violation of E-Rate Program 
rules.\8\ Ultimately, your scheme induced at least ten schools, in 
seven different states, to award contracts to your companies.\9\
---------------------------------------------------------------------------

    \3\ Second Report and Order, 18 FCC Rcd at 9225, ] 66. 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\ Also known as Doug LaDuron. See Leonard LaDuron Indictment.
    \5\ See supra note 1. See Leonard LaDuron Plea. See also 
Department of Justice Press Release (Dec. 16, 2009), available at 
http://kansascity.fbi.gov/dojpressrel/pressrel09/kc121609a.htm (DOJ 
December 2009 Press Release).
    \6\ LaDuron Indictment at 4-5.
    \7\ LaDuron Indictment at 4; Leonard LaDuron Plea at 1-2.
    \8\ LaDuron Indictment at 4-10, 11-12; Leonard LaDuron Plea at 
1-3.
    \9\ LaDuron Indictment at 8. See also DOJ December 2009 Press 
Release at 1
---------------------------------------------------------------------------

    On December 23, 2009, you were sentenced to serve fifty-seven 
months in federal prison, to be followed by thirty-six months of 
supervised release for your role in the scheme to defraud the E-Rate 
program. You were also ordered to pay $238,609 in restitution for your 
role in the scheme.\10\
---------------------------------------------------------------------------

    \10\ See Leonard LaDuron Judgment at 1-3, 5 (ordering $238,609 
for your role in the schemes; $217,771 in restitution to USAC and 
$20,838). See also DOJ December 2009 Press Release at 1.
---------------------------------------------------------------------------

    Pursuant to section 54.8 of the Commission's rules, your conviction 
requires the Bureau to suspend you from participating in any activities 
associated with or related to the schools and libraries support 
mechanism.\11\

[[Page 3734]]

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 
the schools and libraries support mechanism.\12\
---------------------------------------------------------------------------

    \11\ 47 CFR 54.8(b)-(e); see also 47 CFR 54.8(a)(4). See also 
Second Report and Order, 18 FCC Rcd at 9225-27, ]] 67-74.
    \12\ 47 CFR 54.8(a)(1); see also 47 CFR 54.8(a)(3).
---------------------------------------------------------------------------

    Your suspension becomes effective upon the earlier of your receipt 
of this letter or publication of notice in the Federal Register, 
pending the Bureau's final debarment determination.\13\ 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.\14\ 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.\15\ 
Such requests, however, will not ordinarily be granted.\16\ The Bureau 
may reverse or limit the scope of suspension only upon a finding of 
extraordinary circumstances.\17\ The Bureau will decide any request for 
reversal or modification of suspension within 90 days of its receipt of 
such request.\18\
---------------------------------------------------------------------------

    \13\ 47 CFR 54.8(a)(7), (e)(1); see also Second Report and 
Order, 18 FCC Rcd at 9226, ] 69.
    \14\ 47 CFR 54.8(e)(4).
    \15\ Id.
    \16\ Id.
    \17\ 47 CFR 54.8(e)(5).
    \18\ See Second Report and Order, 18 FCC Rcd at 9226, ] 70; 47 
CFR 54.8(e)(5), (f).
---------------------------------------------------------------------------

II. Initiation of Debarment Proceedings

    Your guilty plea 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.\19\ Therefore, pursuant to section 
54.8 of the Commission's rules, your conviction requires the Bureau to 
commence debarment proceedings against you.\20\
---------------------------------------------------------------------------

    \19\ ``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 
54.8(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 
mechanism.'' 47 CFR 54.8(a)(1).
    \20\ See 47 CFR 54.8(b), (c).
---------------------------------------------------------------------------

    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.\21\ Absent 
extraordinary circumstances, the Bureau will debar you.\22\ The Bureau 
will decide any request for reversal or limitation of debarment within 
90 days of receipt of such request.\23\ 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.\24\
---------------------------------------------------------------------------

    \21\ See 47 CFR 54.8(e)(3), (e)(5); see also Second Report and 
Order, 18 FCC Rcd at 9226, ] 70.
    \22\ 47 CFR 54.8(e)(5); see also Second Report and Order, 18 FCC 
Rcd at 9227, ] 74.
    \23\ See 47 CFR 54.8(e)(5), (f); see also Second Report and 
Order, 18 FCC Rcd at 9226, ] 70.
    \24\ 47 CFR 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. 47 CFR 
54.8(f).
---------------------------------------------------------------------------

    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.\25\ The Bureau may, if necessary to protect the 
public interest, extend the debarment period.\26\
---------------------------------------------------------------------------

    \25\ Second Report and Order, 18 FCC Rcd at 9225, ] 67; 47 CFR 
54.8(d), (g).
    \26\ 47 CFR 54.8(g).
---------------------------------------------------------------------------

    Please direct any response, if by messenger or hand delivery, to 
Marlene H. Dortch, Secretary, Federal Communications Commission, 445 
12th Street, SW., Room TW-A325, Washington, DC 20554, to the attention 
of Rebekah Bina, Attorney Advisor, Investigations and Hearings 
Division, Enforcement Bureau, Room 4-C330, with a copy to Michele Levy 
Berlove, Acting 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 Rebekah Bina, Attorney Advisor, 
Investigations and Hearings Division, Enforcement Bureau, Federal 
Communications Commission, 445 12th Street, S.W., Room 4-C330, 
Washington, DC 20554, with a copy to Michele Levy Berlove, Acting 
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. Bina via mail, by 
telephone at (202) 418-7931 or by e-mail at [email protected]. If 
Ms. Bina is unavailable, you may contact Ms. Michele Levy Berlove, 
Acting Assistant Chief, Investigations and Hearings Division, by 
telephone at (202) 418-1477 and by e-mail at [email protected].

    Sincerely,
Hillary S. DeNigro,
Chief, Investigations & Hearings Division, Enforcement Bureau.

[FR Doc. 2010-1219 Filed 1-21-10; 8:45 am]
BILLING CODE 6712-01-P