Both NEC and Inter-Tel have engaged and been convicted of fraud relating to participating in the E-rate program. The FCC has found mitigating circumstances for both companies and is imposing a six-month debarment period for NEC and a one-year debarment period for Inter-Tel. NEC and Inter-Tel will be under heightened scrutiny as well as automatic annual E-rate audits. The FCC could have debarred these companies for up to three years and NEC was the first corporation convicted of crimes related to the E-rate program since the enactment of the Commission's debarment rule.
NEC argued against being debarred from the program stating that "upon learning in the fall of 2002 of the grand jury investigation into its illegal conduct, the company froze all its E-rate activities, including activities not implicated by the DOJ investigation, effectively debarring itself from the E-rate program…" However, according to the SLD data, NEC has continued to try to participate in the program.
See NEC E-rate data analysis at NEC Business Network Solutions.xls.
The NEC E-rate Debarment Order can be viewed at NEC Debarment Order.doc
The Inter-Tel Debarment Order can be viewed at Inter-Tel Debarment Order.doc