[Federal Register Volume 77, Number 156 (Monday, August 13, 2012)]
[Notices]
[Pages 48154-48156]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-19813]



[[Page 48154]]

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FEDERAL COMMUNICATIONS COMMISSION

[DA 12-1211]


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. 
Willard Ross Lanham'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. Lanham, 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 Joy Ragsdale, 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 30 days from the receipt 
of the suspension letter or September 12, 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.

ADDRESSES: Federal Communications Commission, Enforcement Bureau, 
Investigations and Hearings Division, Room 4-C330, 445 12th Street SW., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Joy Ragsdale, Federal Communications 
Commission, Enforcement Bureau, Investigations and Hearings Division, 
Room 4-C330, 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 12-1211, 
which was mailed to Mr. Lanham and released on July 27, 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.

     Dated: July 27, 2012.

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

Sent Via Certified Mail, Return Receipt Requested and Email

Mr. Willard Ross Lanham, c/o Stephen N. Preziosi, Law Office of Stephen 
N. Preziosi P.C., 570 Seventh Avenue, Ninth Floor, New York, NY 10018.

Re: Notice of Suspension and Initiation of Debarment Proceeding File 
No. EB-12-IH-0847

    Dear Mr. Lanham: The Federal Communications Commission (Commission 
or FCC) has received notice of your conviction for theft of federal 
education funds in violation of 18 U.S.C. 666(a)(1), and mail fraud in 
violation of 18 U.S.C. 1341, in connection with 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 participating in activities associated 
with 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 the jury's verdict finding you guilty on one count of 
theft of federal funds and three counts of mail fraud. Trial 
Transcript at 887, United States v. Willard Lanham, Jury Trial, No. 
11 CR 548 GBD (S.D.N.Y. 2012) (Trial Tr.); United States v. Willard 
Lanham, No. 11 CR 548 GBD, Order (S.D.N.Y. June 13) (order denying 
motions for judgment of acquittal and for a new trial).
    \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 statutory 
provisions and Commission rules relating to the E-Rate program are 
designed to ensure that all E-Rate funds are used for their intended 
purpose.\4\ For example, section 254(h)(1)(B) of the Communications Act 
of 1934, as amended, requires E-Rate program applicants to make bona 
fide requests for services intended for educational purposes in order 
to receive E-Rate discounts.\5\ Further, the Commission has stated that 
``[a] funding request may not be bona fide where a service provider has 
charged the beneficiary an inflated price.'' \6\ The Commission also

[[Page 48155]]

limits E-Rate funding to certain eligible services, which does not 
include consulting services.\7\
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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\ NEC-Business Network Solutions, Inc., Notice of Debarment 
and Order Denying Waiver Petition, 21 FCC Rcd 7491, 7493, para. 7 
(2006).
    \5\ 47 U.S.C. 245(h)(1)(B); Request for Review by Ysleta 
Independent School District of the Decision of the Universal Service 
Administrator, CC Docket Nos. 96-45, 97-21, Order, 18 FCC Rcd 26407, 
26409, para. 5 (2003), (citing Federal-State Joint Board on 
Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Rcd 
8776, 9076, para. 570 (1997)).
    \6\ Schools and Libraries Universal Service Support Mechanism, 
Fifth Report and Order and Order, 19 FCC Rcd 15808, 15818, para. 30 
(2004). The Commission has taken enforcement action against service 
providers who inflated their rates and subsequently requested E-Rate 
funding for those associated costs. See Letter from William H. 
Davenport, Chief, Investigations and Hearings Division, Enforcement 
Bureau, Federal Communications Commission, to Steven G. Mihaylo, 
Notice of Suspension and of Proposed Debarment, 20 FCC Rcd 1372 
(Enf. Bur. 2005); see also Letter from Hillary S. DeNigro, Chief, 
Investigations and Hearings Division, Enforcement Bureau, Federal 
Communications Commission, to Richard E. Brown, Notice of Debarment, 
22 FCC Rcd 20569 (Enf. Bur. 2007) (debarment of service provider who 
inflated costs in an attempt to defraud the E-Rate program).
    \7\  Federal-State Joint Board on Universal Service, Total 
Communications, Inc., Site Link Communications, Inc., Requests for 
Review of Decisions of the Universal Service Administrator, Order, 
16 FCC Rcd 14020, 14023-24, para. 9 & n.23 (Com. Car. Bur. 2001) 
(Site Link Order).
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    On March 5, 2012, a jury rendered a guilty verdict convicting you 
on one count of theft of federal funds and three counts of mail fraud 
in connection with your activities as an E-Rate consultant for the New 
York City Department of Education (DOE).\8\ Your responsibilities as a 
DOE consultant included overseeing Project Connect, a project designed 
to bring Internet connectivity to New York City schools.\9\ On April 
28, 2011, the Special Commissioner of Investigation for the New York 
City School District (SCI) released a report alleging, among other 
matters, that you had orchestrated a fraudulent invoicing and billing 
scheme using DOE vendors and subcontractors to overcharge DOE for 
Project Connect.\10\
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    \8\ Trial Tr. at 887.
    \9\ See Trial Testimony of Tom Kambouras; Trial Tr. at 34-36; 
Testimony of Stephen Vigilante, Trial Tr. at 274-75.
    \10\ Special Commissioner of Investigation Report to Hon. Dennis 
M. Walcott, Chancellor New York City Public Schools, Dep't of 
Education from Richard J. Condon, Special Commissioner of 
Investigation for the New York City School District, SCI Case No. 
2008-4446, at 1 (Apr. 28, 2011), at http://www.nycsci.org/reports/04-11%20Lanham%20Rpt.pdf (SCI Report).
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    Testimony and documentary evidence admitted during your trial 
corroborates SCI's allegations. Specifically, witnesses testified that 
you: (1) Arranged for employees of your company, Lanham Enterprises, 
Inc., to work as consultants for DOE,\11\ (2) inflated their hourly 
rates far above their salaries,\12\ and (3) arranged for Project 
Connect subcontractors to bill those inflated rates to a Project 
Connect contractor using invoices that misstated the true nature of the 
charges.\13\ Witnesses further testified you directed employees of that 
contractor to ``bundle'' the consultant charges with services eligible 
for E-Rate funding on invoices and billing spreadsheets sent to DOE in 
order to make it appear that the consultants were doing work associated 
with wiring the schools for Internet access service.\14\ Your scheme 
resulted in DOE being fraudulently billed more than $3.6 million for 
Project Connect between 2002 and 2008, of which you profited 
approximately $1.7 million.\15\ The DOE included at least a portion of 
these overcharges in its E-Rate funding requests for Project 
Connect.\16\
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    \11\ Testimony of Michael Pizza, Trial Tr. at 162-66; Testimony 
of Stephen Vigilante, Trial Tr. at 289-96. These consultants also 
worked on a second project that you managed for DOE that involved 
reviewing, paying, and centralizing DOE's telephone bills. Testimony 
of Stephen Vigilante, Trial Tr. at 282, 290.
    \12\ Testimony of Tamika Stevenson, Trial Tr. at 218; see also 
SCI Report at 6 & n.18 (stating three of the consultants who were 
paid $30 to $70 per hour had their services billed to DOE at $290 an 
hour or more).
    \13\ Testimony of Christopher Louridas, Trial Tr. at 124-38; see 
also SCI Report at 7 & n.20.
    \14\ Testimony of Christopher Louridas, Trial Tr. at 124-26; 
Testimony of Joseph Iacoviello, Trial Tr. at 81-82; Testimony of 
Stephen Vigilante, Trial Tr. at 294-96; Testimony of Willard Lanham, 
Trial Tr. at 613, 616-18, 636-38, 702-12, 735-38.
    \15\ See Testimony of Valerie Batista, Trial Tr. at 453-54 
(testifying that Verizon billed DOE $3.9 million for the 
telecommunications consultants' work); SCI Report at 1 (stating that 
DOE paid Mr. Lanham approximately $3.6 million for the consultants' 
work).
    \16\ See Testimony of Stephen Vigilante, Trial Tr. at 274-75; 
see also News Release, Representative Charles B. Rangel, Ranking 
Democrat, Committee on Ways and Means, Chancellor Harold O. Levy and 
Congressman Charles Rangel Announce Utilization of Federal 
Assistance for School Modernization (Jan. 8, 2002), at http://www.house.gov/apps/list/speech/ny15_rangel/pr.wm.schoolsqzab.html 
(News Release) (stating Project Connect would be ``largely financed 
through the federal E-[R]ate program'').
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    Pursuant to Sec.  54.8(b) of the Commission's rules,\17\ 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.\18\ Your suspension 
becomes effective upon receipt of this letter or its publication in the 
Federal Register, whichever comes first.\19\
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    \17\ 47 CFR 54.8(b); see Second Report and Order, 18 FCC Rcd at 
9225-27, paras. 67-74.
    \18\ 47 CFR 54.8(a)(1), (d).
    \19\  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 it's publication in the 
Federal Register whichever comes first.\20\ Such requests, however, 
will not ordinarily be granted.\21\ The Bureau may reverse or limit the 
scope of suspension only upon a finding of extraordinary 
circumstances.\22\ The Bureau will decide any request to reverse or 
modify a suspension within ninety (90) calendar days of its receipt of 
such request.\23\
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    \20\ 47 CFR 54.8(e)(4).
    \21\ Id.
    \22\ Id. 54.8(f).
    \23\ 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.\24\ Therefore, pursuant to Sec.  
54.8(b) of the rules, your conviction requires the Bureau to commence 
debarment proceedings against you.\25\
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    \24\ ``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).
    \25\  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.\26\ 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.\27\ 
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.\28\
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    \26\ Second Report and Order, 18 FCC Rcd at 9226, para. 70; 47 
CFR 54.8(e)(3).
    \27\ Second Report and Order, 18 FCC Rcd at 9226, para. 70; 47 
CFR 54.8(e)(5).
    \28\ 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

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with or related to the E-Rate program for three years from the date of 
debarment.\29\ The Bureau may set a longer debarment period or extend 
an existing debarment period if necessary to protect the public 
interest.\30\
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    \29\  Second Report and Order, 18 FCC Rcd at 9225, para. 67; 47 
CFR 54.8(d), (g).
    \30\ 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-C330, with a copy to Theresa Z. 
Cavanaugh, Chief, Investigations and Hearings Division, Enforcement 
Bureau, Room 4-C330, Federal Communications Commission. All messenger 
or hand delivery filings must be submitted without envelopes.\31\ 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-
C330, Washington, DC 20554, with a copy to Theresa Z. Cavanaugh, 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 your response 
via email to Joy M. Ragsdale, [email protected] and to Theresa Z. 
Cavanaugh, [email protected].
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    \31\ 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.

[FR Doc. 2012-19813 Filed 8-10-12; 8:45 am]
BILLING CODE 6712-01-P