Business owner sentenced for E-Rate fraud

IDG News Service - The former owner of two Illinois technology companies was sentenced Thursday to serve 30 months in prison for participating in a conspiracy to defraud a U.S. Federal Communications Commission program to help schools and libraries in poor areas connect to the Internet, the U.S. Department of Justice said.

Gloria Harper, former co-owner of Global Networking Technologies and former owner of Computer Training Associates, conspired to provide bribes and kickbacks to several school officials and employees responsible for procuring bids for Internet access services under the federal E-Rate program, the DOJ said. School districts in Arkansas, Florida, Illinois and Louisiana were affected, the agency said.

In return for the bribes and kickbacks, school employees ceded control of the E-Rate competitive bidding process to Harper and a co-conspirator, allowing them to ensure E-Rate contracts at these schools were awarded to their companies, the DOJ said.

The conspiracy lasted from December 2001 to September 2005, the DOJ said in a press release.

Harper was charged in U.S. District Court for the Eastern District of Louisiana in November 2010. Her lawyer wasn't immediately available for comment.

An ongoing investigation into fraud and anticompetitive conduct in the E-Rate program by the DOJ's Antitrust Division has lead to seven companies and 24 people either pleading guilty, being convicted at trial or entering into civil settlements. The defendants have been sentenced to pay fines and restitution of more than US$40 million.

Including Harper, 19 people have been sentenced to serve prison time. In June 2011, Barrett C. White and Tyrone Pipkin, Harper's co-conspirators, were each sentenced to serve one year and one day in prison for their roles in the conspiracy.

The E-Rate program was created by Congress in the Telecommunications Act of 1996 and provides subsidies to schools and libraries in economically disadvantaged communities. The program pays between 20 and 90 percent of the cost for Internet access and telecommunications services, as well as on-site computer and communications networks.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.