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Former Project Manager Pleads Guilty to Bid Rigging on E-rate Contracts

A former electrical contractor pleaded guilty August 26 to participating in a bid-rigging scheme involving E-rate contracts for the West Fresno Elementary School District in California, the U.S. Justice Department's Antitrust Division reported.

As part of his plea agreement, Duane Maynard, of Arvada, CA, agreed to assist the government in its ongoing investigation into bid-rigging and fraud involving the district's E-rate contracts.

"The Antitrust Division will vigorously prosecute those who conspire to circumvent the competition requirements of federal programs," said R. Hewitt Pate, assistant attorney general in charge of the Antitrust Division. "Bid-rigging schemes aimed at the E-rate program rob funds for economically disadvantaged schools and libraries across the nation."

Maynard is the first individual charged by the Antitrust Division in connection with an E-rate program investigation. Another conviction in New York City, involving charges of attempting to defraud the E-rate program, was filed by the U.S. attorney there following an FBI investigation.

According to court papers, Maynard admitted that beginning in February 1999, he, together with school district representatives, a consultant and others representing potential competitors, conspired to ensure that Maynard's company would be the successful bidder for the general contract for what was described as the school district's "E-rate project." The account said that the individuals agreed that no other co-conspirator would submit a competing bid, that co-conspirator companies would serve as subcontractors on the project, and that any competing general bid would be stricken as non-responsive. In carrying out the scheme, the court papers said, Maynard acted on behalf of his employer, which was not identified.

In the 1998-2000 funding years, $6.5 million in E-rate commitments were approved for the West Fresno Elementary School District and $6.293 million in commitments were utilized, according to Funds For Learning's review of the Schools and Libraries Division's public records. SLD records indicate no applications were successfully submitted since then. According to the Fresno Bee, the state has since taken over administration of the school district.

As part of his plea agreement, Maynard also acknowledged that he had falsely denied recollection of events related to the project when he testified before a grand jury investigating the matter. Under federal sentencing guidelines, for the bid-rigging charges, Maynard faces a maximum penalty of three years' imprisonment and a $350,000 fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victim. In addition, he can be ordered to pay restitution to any victim for the full amount of their loss. Maynard acknowledged that he could face additional penalties because of the charges related to obstruction of justice.

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