[Federal Register Volume 75, Number 76 (Wednesday, April 21, 2010)]
[Notices]
[Pages 20844-20846]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-9187]


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FEDERAL COMMUNICATIONS COMMISSION

[DA 10-585]


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 (Bureau) gives notice to Mr. Jay H. 
Soled of his suspension from the schools and libraries universal 
service support mechanism (E-Rate Program). Additionally, the Bureau 
gives notice that debarment proceedings are commencing against him. Mr. 
Soled, 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.

DATES: Opposition requests must be received by May 21, 2010. However, 
an opposition request by the party to be suspended must be received 30 
days from the receipt of the suspension letter or May 21, 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.

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, Assistant Chief,

[[Page 20845]]

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 10-585, 
which was mailed to Mr. Soled and released on April 7, 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:

    April 7, 2010
    DA 10-585

VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED AND E-MAIL (law.com">mdm@monico-law.com) AND FACSIMILE (312) 853-2187

Mr. Jay H. Soled
c/o Monico, Pavich & Spevack
Attn: Michael D. Monico
20 South Clark Street, Suite 700
Chicago, IL 60603

Re: Notice of Suspension and Initiation of Debarment Proceedings, File 
No. EB-10-IH-2080

Dear Mr. Soled:
    The Federal Communications Commission (``FCC'' or 
``Commission'') has received notice of your guilty plea for 
conspiracy to defraud the United States in violation of 18 U.S.C. 
Sec.  371 in connection with your participation in the schools and 
libraries universal service support mechanism (``E-Rate 
program'').\1\ Consequently, pursuant to 47 CFR Sec.  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 guilty plea and subsequent sentencing for conspiracy 
to defraud the United States. United States v. Jay H. Soled, 
Criminal Docket No. 1:08-cr-00464-2, Plea Agreement (N.D. Ill. filed 
Feb. 4, 2010 and entered Mar. 15, 2010) (``Soled Judgment''); United 
States v. Jay H. Soled, Criminal Docket No. 1:08-cr-00464-2, Plea 
Agreement (N.D. Ill. filed July 10, 2008 and entered July 14, 2008) 
(``Soled Plea''); United States v. Benjamin Rowner and Jay H. Soled, 
Criminal Docket No. 1:08-cr-20047-01-02 CM/JPO, Information (D. Kan. 
filed and entered Apr. 23, 2008) (``Rowner and Soled Information'').
    \2\ 47 CFR Sec.  54.8; see also 47 CFR Sec.  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)).
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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.\3\ On July 10, 2008, you, Jay H. Soled, entered a plea 
agreement and pleaded guilty to knowingly and intentionally 
conspiring with others to defraud and obtain money from the E-Rate 
Program through submission of materially false representations, 
concealment of material facts, mail fraud, wire fraud, and 
intentional manipulation of the competitive bidding process.\4\ 
Specifically, from Fall 1999 to at least November 2003, you held 
yourself out as an E-Rate salesperson and installer for the purpose 
of defrauding the E-Rate Program.\5\ You admitted that you and 
others devised schemes to defraud school districts and the E-Rate 
program by having your co-conspirators steer E-rate related 
contracts to various companies that directly benefited you, your 
conspirators, and your company, primarily DeltaNet, Inc.\6\ In 
furtherance of the schemes, you submitted misleading, 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 to USAC, 
and concealed from the school districts relationships with co-
conspirators in order to induce schools to select your companies as 
service providers in violation of E-Rate Program rules.\7\ 
Ultimately, your conspiracy was comprised of two closely related 
schemes that affected at least thirteen different schools in eight 
different states across the United States.\8\
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    \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 Sec.  54.8(a)(6).
    \4\ Soled Plea at 2-3; see also Rowner and Soled Information at 
5-12; Department of Justice Press Release (Apr. 23, 2008), available 
at http://www.justice.gov/atr/public/press_releases/2008/232526.htm 
(``DOJ April 2008 Press Release'').
    \5\ Soled Plea at 3-8; see also Rowner and Soled Information at 
5-12.
    \6\ Soled Plea at 3-8; see also Rowner and Soled Information at 
5-12; Department of Justice Press Release (Feb. 4, 2010), available 
at  http://chicago.fbi.gov/dojpressrel/pressrel10/cg020410a.htm 
(``DOJ February 2010 Press Release'').
    \7\ Soled Plea at 3-8; see also Rowner and Soled Information at 
5-12.
    \8\ Soled Plea at 4-6; see also Rowner and Soled Information at 
8-11 (Listing the schools and states including Wisconsin, Illinois, 
Kansas, California, Oregon, New York, New Jersey, and Arkansas); DOJ 
February 2010 Press Release at 1.
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    On February 4, 2010, you were sentenced to serve twenty-seven 
months in prison, to be followed by twenty-four months of supervised 
release for your role in the scheme to defraud the E-Rate 
program.\9\ You were also ordered to pay $271,716 in restitution to 
USAC for your role in the schemes.\10\
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    \9\ Soled Judgment at 2-3; see also DOJ February 2010 Press 
Release at 1.
    \10\ Soled Judgment at 4-5 (You were also ordered to pay a $100 
assessment); see also DOJ February 2010 Press Release at 1.
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    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\ 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\
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    \11\ 47 CFR Sec.  54.8(b)-(e); see also 47 CFR Sec.  54.8(a)(4); 
Second Report and Order, 18 FCC Rcd at 9225-27, ]] 67-74.
    \12\ 47 CFR Sec.  54.8(a)(1); see also 47 CFR Sec.  54.8(a)(3).
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    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

[[Page 20846]]

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\
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    \13\ 47 CFR Sec.  54.8(a)(7), (e)(1); see also Second Report and 
Order, 18 FCC Rcd at 9226, ] 69.
    \14\ 47 CFR Sec.  54.8(e)(4).
    \15\ Id.
    \16\ Id.
    \17\ 47 CFR Sec.  54.8(e)(5).
    \18\ See Second Report and Order, 18 FCC Rcd at 9226, ] 70; see 
also 47 CFR Sec.  54.8(e)(5),(f).
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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\
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    \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 
Sec.  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 Sec.  54.8(a)(1).
    \20\ See 47 CFR Sec.  54.8(b), (c).
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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.\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\
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    \21\ See 47 CFR Sec.  54.8(e)(3), (e)(5); see also Second Report 
and Order, 18 FCC Rcd at 9226, ] 70.
    \22\ 47 CFR Sec.  54.8(e)(5); see also Second Report and Order, 
18 FCC Rcd at 9227, ] 74.
    \23\ See 47 CFR Sec.  54.8(e)(5), (f); see also Second Report 
and Order, 18 FCC Rcd at 9226, ] 70.
    \24\ 47 CFR Sec.  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 Sec.  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.\25\ The Bureau may, if necessary 
to protect the public interest, extend the debarment period.\26\
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    \25\ Second Report and Order, 18 FCC Rcd at 9225, ] 67; 47 CFR 
Sec.  54.8(d), (g).
    \26\ 47 CFR Sec.  54.8(g).
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    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, SW., 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 and Hearings Division, Enforcement Bureau.

cc: United States Attorney's Office, Department of Justice (via e-
mail)
Kristy Carroll, Esq., Universal Service Administrative Company (via 
e-mail)
[FR Doc. 2010-9187 Filed 4-20-10; 8:45 am]
BILLING CODE 6712-01-P