[Federal Register Volume 77, Number 101 (Thursday, May 24, 2012)]
[Notices]
[Pages 31011-31013]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-12663]


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FEDERAL COMMUNICATIONS COMMISSION

[DA 12-733]


Notice of Suspension and Commencement of Proposed 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. 
Jonathan M. Slaughter'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. Slaughter, 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 30 days from the receipt 
of the suspension letter or June 25, 2012, 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: Joy Ragsdale, Federal Communications 
Commission, Enforcement Bureau, Investigations and Hearings Division, 
Room 4-A236, 445 12th Street SW., Washington, DC 20554. Joy Ragsdale 
may be contacted by phone at (202) 418-1697 or email at 
[email protected]. If Ms. Ragsdale is unavailable, you may contact 
Ms. Theresa Cavanaugh, Chief, Investigations and Hearings Division, by 
telephone at (202) 418-1420 and by email 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 12-452, 
which was mailed to Mr. Slaughter and released on March 22, 2012. 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 email 
http://www.bcpiweb.com.

Federal Communications Commission.
Theresa Z. Cavanaugh,
Chief, Investigations and Hearings Division, Enforcement Bureau.

May 9, 2012

DA 12-733

SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND EMAIL

Mr. Jonathan M. Slaughter
c/o William R. Blanchard, Jr.
Blanchard Law Offices
505 South Perry Street
Montgomery, AL 36104

Re: Notice of Suspension and Initiation of Debarment Proceeding

File No. EB-12-IH-0050

    Dear Mr. Slaughter:
    The Federal Communications Commission (Commission or FCC) has 
received notice of your conviction for mail fraud in violation of 18 
U.S.C 1341 in connection with your participation in the federal 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 it will commence 
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 mail fraud 
in United States v. Jonathan Michael Slaughter, Criminal Case No. 
2:11cr162-MEF-01, Judgment (M.D. Ala. 2012) (Judgment).
    \2\ See 47 CFR 0.111 (delegating authority to the Bureau to 
resolve universal service suspension and debarment proceedings). The 
Commission adopted debarment rules for the E-Rate program 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 Sec.  
54.521 to suspend and debar parties from the E-Rate program). In 
2007 the Commission extended the debarment rules to apply to all 
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; Rural Health Care 
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, app. C at 16410-12 (2007) 
(Program Management Order) (renumbering Sec.  54.521 of the 
universal service debarment rules as Sec.  54.8 and amending 
subsections (a)(1), (a)(5), (c), (d), (e)(2)(i), (e)(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 [E-Rate program]'' from 
receiving the benefits associated with that program.\3\ The

[[Page 31012]]

Commission's rules are designed to ensure that all E-Rate funds are 
used for their intended purpose.\4\ For example, schools and libraries 
must apply and meet certain qualifications to be eligible to receive E-
Rate funds.\5\ Additionally, services purchased at a discount under the 
E-Rate program cannot be ``sold, resold, or transferred * * * [for] 
money or any other thing of value.'' \6\
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    \3\ 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\ In the Matter of NEC-Business Network Solutions, Inc., 
Notice of Debarment and Order Denying Waiver Petition, 21 FCC Rcd 
7491, 7493, para. 7 (2006).
    \5\ 47 CFR 54.501.
    \6\ Id. 54.513(a).
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    On September 29, 2011, you pled guilty to committing fraudulent 
activities associated with the E-Rate program while you were owner and 
president of E-Rate Consulting Services, LLC (ECS) in Montgomery, 
Alabama.\7\ ECS assisted schools and school districts in their efforts 
to qualify for E-Rate funding.\8\ ECS arranged to receive through the 
mail its clients' E-Rate checks, and was supposed to forward those 
checks to the clients.\9\ Between May 2006 and January 2009, however, 
you converted approximately $892,000 in E-Rate funds to your personal 
use without your clients' knowledge.\10\ Specifically, you deposited E-
Rate checks payable to your clients into an ECS bank account and, 
instead of transmitting the E-Rate funds to your clients, kept the 
money and used it largely for your personal expenses.\11\ Your 
fraudulent scheme affected six schools and 14 school districts located 
in 13 states.\12\
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    \7\ United States v. Jonathan Slaughter, Case No. 2:11cr162-MEF-
01, Plea Agreement at 3-4 (M.D. Ala. 2011) (Plea Agreement).
    \8\ Id. at 4.
    \9\ Id.; Justice News, Dep't of Justice, Montgomery Man Pleads 
Guilty to Stealing $892,000 from Schools in 13 States, Sept. 29, 
2011, http://www.justice.gov/usao/alm/press/current_press/2011_09_29_slaughter.pdf (Press Release).
    \10\ Plea Agreement at 4-5.
    \11\ Id.
    \12\ Id. See Appendix.
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    On January 6, 2012, the United States District Court for the Middle 
District of Alabama sentenced you to serve 51 months in prison followed 
by three years of supervised release.\13\ The court also ordered you to 
pay a $100 special assessment.\14\
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    \13\ Judgment at 2-3.
    \14\ Id. at 5.
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    Pursuant to Sec.  54.8(b) of the Commission's rules,\15\ upon your 
conviction the Bureau is required to suspend you from participating in 
any activities associated with or related to the E-Rate program, 
including the receipt of funds or discounted services through the E-
Rate program, or consulting with, assisting, or advising applicants or 
service providers regarding the E-Rate program.\16\ Your suspension 
becomes effective upon receipt of this letter or its publication in the 
Federal Register, whichever comes first.\17\
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    \15\ 47 CFR 54.8(b); see Second Report and Order, 18 FCC Rcd at 
9225-27, paras. 67-74.
    \16\ 47 CFR 54.8(a)(1), (d).
    \17\ Second Report and Order, 18 FCC Rcd at 9226, para. 69; 47 
CFR 54.8(e)(1).
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    In accordance with the Commission's suspension and debarment rules, 
you may contest this suspension or the scope of this suspension by 
filing arguments, with any relevant documents, within thirty (30) 
calendar days of receipt of this letter or its publication in the 
Federal Register, whichever comes first.\18\ Such requests, however, 
will not ordinarily be granted.\19\ The Bureau may reverse or limit the 
scope of suspension only upon a finding of extraordinary 
circumstances.\20\ The Bureau will decide any request to reverse or 
modify a suspension within ninety (90) calendar days of its receipt of 
such request.\21\
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    \18\ 47 CFR 54.8(e)(4).
    \19\ Id.
    \20\ Id. 54.8(f).
    \21\ See Second Report and Order, 18 FCC Rcd at 9226, para. 70; 
47 CFR 54.8(e)(5).
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II. Initiation of Debarment Proceedings

    In addition to requiring your immediate suspension from the E-Rate 
program, your conviction is cause for debarment as defined in Sec.  
54.8(c) of the Commission's rules.\22\ Therefore, pursuant to Sec.  
54.8(b) of the rules, your conviction requires the Bureau to commence 
debarment proceedings against you.\23\
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    \22\ ``Causes for suspension and debarment are 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). Associated 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.'' Id. 
54.8(a)(1).
    \23\ Id. 54.8(b).
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    As with the suspension process, you may contest the proposed 
debarment or the scope of the proposed debarment by filing arguments 
and any relevant documentation within thirty (30) calendar days of 
receipt of this letter or its publication in the Federal Register, 
whichever comes first.\24\ The Bureau, in the absence of extraordinary 
circumstances, will notify you of its decision to debar within ninety 
(90) calendar days of receiving any information you may have filed.\25\ 
If the Bureau decides to debar you, its decision will become effective 
upon either your receipt of a debarment notice or publication of the 
decision in the Federal Register, whichever comes first.\26\
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    \24\ Second Report and Order, 18 FCC Rcd at 9226, para. 70; 47 
CFR 54.8(e)(3).
    \25\ Second Report and Order, 18 FCC Rcd at 9226, para. 70; 47 
CFR 54.8(e)(5).
    \26\ 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. Id. 
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 E-Rate program for three years from the date of debarment.\27\
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    \27\ Second Report and Order, 18 FCC Rcd at 9225, para. 67; 47 
CFR 54.8(d), (g).
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The Bureau may set a longer debarment period or extend an existing 
debarment period if necessary to protect the public interest.\28\
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    \28\ 47 CFR 54.8(g).
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    Please direct any response, if sent 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 Joy M. Ragsdale, Attorney Advisor, Investigations and Hearings 
Division, Enforcement Bureau, Room 4-A236, with a copy to Theresa Z. 
Cavanaugh, Chief, Investigations and Hearings Division, Enforcement 
Bureau, Room 4-C322, Federal Communications Commission. All messenger 
or hand delivery filings must be submitted without envelopes.\29\ If 
sent by commercial overnight mail (other than U.S. Postal Service 
(USPS) Express Mail and Priority Mail), the response must be sent to 
the Federal Communications Commission, 9300 East Hampton Drive, Capitol 
Heights, Maryland 20743. If sent by USPS First Class, Express Mail, or 
Priority Mail, the response should be addressed to Joy Ragsdale, 
Attorney Advisor, Investigations and Hearings Division, Enforcement 
Bureau, Federal Communications Commission, 445 12th Street SW., Room 4-
A236, Washington, DC 20554, with a copy to Theresa Z. Cavanaugh, Chief, 
Investigations and Hearings Division, Enforcement Bureau,

[[Page 31013]]

Federal Communications Commission, 445 12th Street SW., Room 4-C322, 
Washington, DC 20554. You shall also transmit a copy of your response 
via email to Joy M. Ragsdale, [email protected] and to Theresa Z. 
Cavanaugh, [email protected].
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    \29\ See FCC Announces Change in Filing Location for Paper 
Documents, Public Notice, 24 FCC Rcd 14312 (2009) for further filing 
instructions.
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    If you have any questions, please contact Ms. Ragsdale via U.S. 
postal mail, email, or by telephone at (202) 418-1697. You may contact 
me at (202) 418-1553 or at the email address noted above if Ms. 
Ragsdale is unavailable.
 Sincerely yours,

Theresa Z. Cavanaugh
Chief Investigations and Hearings Division, Enforcement Bureau.

cc: Johnnay Schrieber, Universal Service Administrative Company (via 
email)

Rashann Duvall, Universal Service Administrative Company (via email)

Andrew O. Schiff, Assistant United States Attorney, United States 
Department of Justice (via email)


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                                                                                                 Total amount
                ECS' Clients                                      State                            converted
----------------------------------------------------------------------------------------------------------------
Dermott Public School District.............  Arkansas.......................................           $6,809.24
Citrus County School District..............  Florida........................................          678,288.69
Eckerd Halfway House/E-Ku Sumee............  Florida........................................               5,670
Hendry County School District..............  Florida........................................           39,031.19
Kuna Joint School District.................  Idaho..........................................            3,523.67
Middleton School District 134.....  Idaho..........................................            4,299.25
The Winchendon School......................  Massachusetts..................................            8,316.00
Northwood Children's Services..............  Minnesota......................................           24,797.66
Prairie Academy............................  Minnesota......................................            4,673.99
Poplar Bluff School District...............  Missouri.......................................            7,672.77
Red Cloud Community School District........  Nebraska.......................................            2,254.52
SAU 41--Hollis Brookline Schools...........  New Hampshire..................................            1,765.18
Beaufort County School District............  North Carolina.................................            9,730.00
Middle Ohio Education......................  Ohio...........................................               23.01
Penns Valley Area School District..........  Pennsylvania...................................           10,966.83
Bedford County School District.............  Tennessee......................................           23,215.94
Banquete Independent School District.......  Texas..........................................           18,655.72
Cleburne Independent School District.......  Texas..........................................            7,231.32
Leander Independent School District........  Texas..........................................           31,872.31
Teague Independent School District.........  Texas..........................................            3,190.56
 
    Total..................................                                                           891,987.85
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[FR Doc. 2012-12663 Filed 5-23-12; 8:45 am]
BILLING CODE 6712-01-P