[Federal Register Volume 75, Number 133 (Tuesday, July 13, 2010)]
[Notices]
[Pages 39943-39945]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-17029]


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FEDERAL COMMUNICATIONS COMMISSION

[DA 10-1113]


Notice of Debarment; 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. Soled from the schools and libraries universal service 
support mechanism for a period of three years.

DATES: Debarment commences on the date Mr. Jay H. Soled receives the 
debarment letter or July 13, 2010, whichever date comes first, for a 
period of three years.

FOR FURTHER INFORMATION CONTACT: Mindy Littell, Federal Communications 
Commission, Enforcement Bureau, Investigations and Hearings Division, 
Room 4-A331, 445 12th Street, SW., Washington, DC 20554. Mindy Littell 
may be contacted by phone at (202) 418-0789 or e-mail at 
[email protected]. If Ms. Littell is unavailable, you may contact 
Mr. Trent Harkrader, Deputy Chief, Investigations and Hearings 
Division, by telephone at (202) 418-2955 and by e-mail at 
[email protected].

SUPPLEMENTARY INFORMATION: The Commission debarred Mr. Soled 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, DA 10-1113, which was mailed to Mr. Soled and 
released on June 23, 2010. 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:

June 23, 2010

DA 10-1113

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 Debarment
 File No. EB-10-IH-2080
Dear Mr. Soled:

    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\ 47 CFR 54.8(g) (2008). See also 47 CFR 0.111(a)(14).
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    On April 7, 2010, 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 April 21, 2010.\3\ The Notice of Suspension 
suspended you from participating in activities associated with or 
relating to 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. Jay H. Soled, Notice of Suspension and Initiation 
of Debarment Proceedings, 25 FCC Rcd 3517 (Inv. & Hearings Div., 
Enf. Bur. 2010) (Attachment 1) (``Notice of Suspension'').
    \3\ 75 FR 20844 (April 21, 2010).
    \4\ See Notice of Suspension, 25 FCC Rcd at 3518-21.
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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), (4). That date occurred no later than 
May 21, 2010. See supra note 3.
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    As discussed in the Notice of Suspension, you pleaded guilty to and 
were sentenced to serve twenty-seven months in federal prison, to be 
followed by twenty-four months of supervised release for federal crimes 
in connection with your participation in a scheme to defraud the E-Rate 
program.\6\ You held yourself out as an E-Rate salesperson and 
installer and 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.\7\ You were also 
ordered to pay $271,716 in restitution to USAC for your role in the 
schemes.\8\ 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.\9\ 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.\10\
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    \6\ See Notice of Suspension, 25 FCC Rcd at 3518. See also 
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'').
    \7\ See Notice of Suspension, 25 FCC Rcd at 3518.
    \8\ Id.
    \9\ 47 CFR 54.8(c). See also 54.8(a)(4), (b)-(e).
    \10\ See 47 CFR 54.8(e)(5), (g). See also Notice of Suspension, 
25 FCC Rcd at 3520.
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    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

[[Page 39944]]

applicants or service providers regarding the schools and libraries 
support mechanism.\11\
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    \11\ See 47 CFR 54.8(a)(1), (a)(5), (d), (g); Notice of 
Suspension, 25 FCC Rcd at 3520.

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Sincerely,

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

cc: Marietta Parker, United States Attorney's Office, Department of 
Justice (via e-mail), Kristy Carroll, Esq., Universal Service 
Administrative Company (via e-mail)
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. 371 in connection with your 
participation in the schools and libraries universal service support 
mechanism (``E-Rate program'').\12\ 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.\13\
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    \12\ 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'').
    \13\ 47 CFR 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)).
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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.\14\ 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.\15\ 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.\16\ 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.\17\ 
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.\18\ 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.\19\
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    \14\ 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).
    \15\ 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'').
    \16\ Soled Plea at 3-8; see also Rowner and Soled Information at 
5-12.
    \17\ 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'').
    \18\ Soled Plea at 3-8; see also Rowner and Soled Information at 
5-12.
    \19\ 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.\20\ 
You were also ordered to pay $271,716 in restitution to USAC for your 
role in the schemes.\21\
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    \20\ Soled Judgment at 2-3; see also DOJ February 2010 Press 
Release at 1.
    \21\ 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.\22\ 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.\23\
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    \22\ 47 CFR 54.8(b)-(e); see also 47 CFR 54.8(a)(4); Second 
Report and Order, 18 FCC Rcd at 9225-27, ]] 67-74.
    \23\ 47 CFR 54.8(a)(1); see also 47 CFR 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.\24\ 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.\25\ 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.\26\ 
Such requests, however, will not ordinarily be granted.\27\ The Bureau 
may reverse or limit the scope of suspension only upon a finding of 
extraordinary

[[Page 39945]]

circumstances.\28\ The Bureau will decide any request for reversal or 
modification of suspension within 90 days of its receipt of such 
request.\29\
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    \24\ 47 CFR 54.8(a)(7), (e)(1); see also Second Report and 
Order, 18 FCC Rcd at 9226, ] 69.
    \25\ 47 CFR 54.8(e)(4).
    \26\ Id.
    \27\ Id.
    \28\ 47 CFR 54.8(e)(5).
    \29\ See Second Report and Order, 18 FCC Rcd at 9226, ] 70; see 
also 47 CFR 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.\30\ Therefore, pursuant to section 
54.8 of the Commission's rules, your conviction requires the Bureau to 
commence debarment proceedings against you.\31\
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    \30\ ``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).
    \31\ See 47 CFR 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.\32\ Absent 
extraordinary circumstances, the Bureau will debar you.\33\ The Bureau 
will decide any request for reversal or limitation of debarment within 
90 days of receipt of such request.\34\ 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.\35\
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    \32\ See 47 CFR 54.8(e)(3), (e)(5); see also Second Report and 
Order, 18 FCC Rcd at 9226, ] 70.
    \33\ 47 CFR 54.8(e)(5); see also Second Report and Order, 18 FCC 
Rcd at 9227, ] 74.
    \34\ See 47 CFR 54.8(e)(5), (f); see also Second Report and 
Order, 18 FCC Rcd at 9226, ] 70.
    \35\ 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).
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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.\36\ The Bureau may, if necessary to protect the 
public interest, extend the debarment period.\37\

    \36\ Second Report and Order, 18 FCC Rcd at 9225, ] 67; 47 CFR 
54.8(d), (g).
    \37\ 47 CFR 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. 2010-17029 Filed 7-12-10; 8:45 am]
BILLING CODE 6712-01-P