The U.S. Department of Justice (DoJ) announced that Premio Inc, a California-based company, has agreed to pay $1.7 million in criminal fines and restitution relating to charges of collusion and fraud in the FCC's E-rate program. Specifically, Premio is charged with "committing mail fraud by willfully entering into a scheme to defraud the E-Rate program by substituting ineligible equipment for approved equipment, submitting false and fraudulent documents to hide the fact that it installed ineligible equipment, and submitting false invoices to the E-Rate program to receive payment for the ineligible equipment that it installed at an E-Rate project at a school district in Highland Park, Michigan."
The DoJ reports that ten individuals and eight companies have been charged as part of their ongoing investigations into waste, fraud, and abuse within the E-rate program. The FCC will soon start procedures against Premio in order to prohibit them from further participation in the E-rate program. The FCC rules state, "…we find that persons convicted of, or held civilly liable for, the 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, or other fraud or criminal offense arising out of activities associated with or related to the schools and libraries universal service support mechanism shall be debarred from involvement with the schools and libraries support mechanism…."
Premio has not participated in the E-rate program since 2003 and did not receive any commitments during Funding Years 2000-2003. However, in 1998 and 1999 (according to an analysis by Funds For Learning) Premio was committed $15,250,833.
Further information on this case can be viewed on the U.S. DoJ website.
The list of individuals and companies that have been suspended or debarred from the E-rate program can be viewed here