E8-13897. Notice of Debarment; Schools and Libraries Universal Service Support Mechanism

AGENCY:

Federal Communications Commission.

ACTION:

Notice.

SUMMARY:

The Enforcement Bureau debars Mr. Keith J. Madeiros from the schools and libraries universal service support mechanism (or “E-Rate Program”) for a period of three years based on your conviction of mail fraud in connection with your participation in the program. The Bureau takes this action in order to protect the E-Rate Program from waste, fraud and abuse.

DATES:

Debarment commences on the date Mr. Keith J. Madeiros receives the debarment letter or August 18, 2008, whichever date come first, for a period of three years.

FOR FURTHER INFORMATION CONTACT:

Diana Lee, Federal Communications Commission, Enforcement Bureau, Investigations and Hearings Division, Room 4-C330, 445 12th Street, SW., Washington, DC 20554. Diana Lee may be contacted by phone at [phone] or by e-mail at [e-mail]. If Ms. Lee is unavailable, you may contact Ms. Vickie Robinson, Assistant Chief, Investigations and Hearings Division, by telephone at [phone] and by e-mail at [e-mail].

SUPPLEMENTARY INFORMATION:

The Bureau debarred Mr. Keith J. Madeiros from the schools and libraries universal service support mechanism for a period of three years pursuant to 47 CFR 54.8 and 47 CFR 0.111(a). Attached is the debarment letter, DA 08-1177, which was mailed to Mr. Keith J. Madeiros and released on May 16, 2008. The complete text of the notice of debarment 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 [phone] or [phone], facsimile [phone], or via e-mail http://www.bcpiweb.com.

Federal Communications Commission.

Hillary S. DeNigro,

Chief, Investigations and Hearings Division, Enforcement Bureau.

The debarment letter follows:

May 16, 2008.

DA 08-1177

Via Certified Mail; Return Receipt Requested and Facsimile (404-872-1622).

Mr. Keith J. Madeiros, c/o Richard R. Brown, Esq., Brown Paindiris & Scott, LLP, 100 Pearl Street, Suite 1100, Hartford, CT 06103. E-Mail: [e-mail].

Re: Notice of Debarment, File No. EB-07-IH-9550

Dear Mr. Madeiros: Pursuant to section 54.8 of the rules of the Federal Communications Commission (the “Commission”), by this Notice of Debarment you are debarred from the schools and libraries universal service support mechanism (or “E-Rate program”) for a period of three years.^[1]

On January 18, 2008, the Enforcement Bureau (the “Bureau”) sent you a Notice of Suspension and Initiation of Debarment Proceedings (the “Notice of Suspension”).^[2] That Notice of Suspension was published in the Federal Register on April 7, 2008.^[3] The Notice of Suspension suspended you from the schools and libraries universal service support mechanism and described the basis for initiation of debarment proceedings against you, the applicable debarment procedures, and the effect of debarment.^[4]

Pursuant to the Commission's rules, any opposition to your suspension or its scope or to your proposed debarment or its scope had to be filed with the Commission no later than thirty (30) calendar days from the earlier date of your receipt of the Notice of Suspension or publication of the Notice of Suspension in the Federal Register.^[5] The Commission did not receive any such opposition.

As discussed in the Notice of Suspension, you pled guilty to and were convicted of mail fraud, in violation of 18 U.S.C. 341, for activities in connection with your participation in the E-Rate program.^[6] You admitted to participating in a scheme to defraud the E-Rate program by, among other things, creating a sham company and submitting fictitious invoices totaling $452,203 that were ultimately submitted to the Universal Service Administrative Company for reimbursement from the E-Rate program.^[7] Such conduct constitutes the basis for your debarment, and your conviction falls within the categories of causes for debarment under section 54.8(c) of the Commission's rules.^[8] For the foregoing reasons, you are hereby debarred for a period of three years from the debarment date, i.e., the earlier date of your receipt of this Notice of Debarment or its publication date in the Federal Register.^[9] Debarment excludes you, for the debarment period, from activities “associated with or related to the schools and libraries support mechanism,” including “the receipt of funds or discounted services through the schools and libraries support mechanism, or consulting with, assisting, or advising applicants or service providers regarding the schools and libraries support mechanism.”^[10]

Sincerely,

Hillary S. DeNigro,

Chief, Investigations and Hearings Division, Enforcement Bureau.

cc: Kristy Carroll, Esq., Universal Service Administrative Company (via e-mail).

Anthony E. Kaplan, Esq., Supervisory Assistant United States Attorney.

Calvin B. Kurimai, Esq., Assistant United States Attorney.

January 18, 2008.

DA 08-129

Via Certified Mail; Return Receipt Requested and Facsimile (860-522-2490).

Mr. Keith J. Madeiros, c/o Richard R. Brown, Esq., Brown Paindiris & Scott, LLP, 100 Pearl Street, Suite 1100, Hartford, CT 06103, E-Mail: [e-mail].

Re: Notice of Suspension and Initiation of Debarment Proceedings, File No. EB-07-IH-9550

Dear Mr. Madeiros: The Federal Communications Commission (“FCC” or “Commission”) has received notice of your conviction for mail fraud in violation of 18 U.S.C. 1341 in connection with your participation in the schools and libraries universal service support mechanism (“E-Rate program”).^[11] Consequently, pursuant to 47 CFR 54.8, this letter constitutes official notice of your suspension from the E-Rate program. In addition, the Enforcement Bureau (“Bureau”) hereby notifies you that we are commencing debarment proceedings against you.^[12]

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 schools and libraries support mechanism” from receiving the benefits associated with that program.^[13] You pled guilty to mail fraud for activities in connection with your participation in the E-Rate program involving telecommunications upgrade projects in four Connecticut school districts.^[14] While employed at Southwestern Bell Communications (“SBC”), you and Richard E. Brown, both SBC account managers, recommended subcontractors to perform telecommunications upgrades for the school districts.^[15] In addition, you and Mr. Brown reviewed invoices submitted by subcontractors to SBC for payment, which SBC then submitted to the Universal Service Administrative Company (“USAC”) for reimbursement from the E-Rate fund.^[16] You admitted to participating in a scheme with Brown and Scott A. Federowicz, a manager of an SBC first-tier subcontractor, to defraud USAC.^[17] You and Mr. Brown each created a sham company and submitted fictitious invoices totaling approximately $452,203 to Mr. Federowicz, who approved those invoices for payment on behalf of the SBC subcontractor.^[18] The SBC subcontractor, unaware that no work had been performed, in turn billed SBC and SBC ultimately sought from USAC reimbursement for those fictitious expenses from the E-Rate program.^[19]

Pursuant to section 54.8(a)(4) of the Commission's rules,^[20] your conviction requires the Bureau to suspend you from participating in any activities associated with or related to the schools and libraries fund mechanism, including the receipt of funds or discounted services through the schools and libraries fund mechanism, or consulting with, assisting, or advising applicants or service providers regarding the schools and libraries support mechanism.^[21] Your suspension becomes effective upon the earlier of your receipt of this letter or publication of notice in the Federal Register.^[22]

Suspension is immediate pending the Bureau's final debarment determination. In accordance with the Commission's debarment rules, you may contest this suspension or the scope of this suspension by filing arguments in opposition to the suspension, with any relevant documentation. Your request must be received within 30 days after you receive this letter or after notice is published in the Federal Register, whichever comes first.^[23] Such requests, however, will not ordinarily be granted.^[24] The Bureau may reverse or limit the scope of suspension only upon a finding of extraordinary circumstances.^[25] Absent extraordinary circumstances, the Bureau will decide any request for reversal or modification of suspension within 90 days of its receipt of such request.^[26]

II. Initiation of Debarment Proceedings

Your guilty plea to and conviction of criminal conduct in connection with the E-Rate program, in addition to serving as a basis for immediate suspension from the program, also serves as a basis for the initiation of debarment proceedings against you. Your conviction falls within the categories of causes for debarment defined in section 54.8(c) of the Commission's rules.^[27] Therefore, pursuant to section 54.8(a)(4) of the Commission's rules, your conviction requires the Bureau to commence debarment proceedings against you.

As with your suspension, you may contest debarment or the scope of the proposed debarment by filing arguments and any relevant documentation within 30 calendar days of the earlier of the receipt of this letter or of publication in the Federal Register.^[28] Absent extraordinary circumstances, the Bureau will debar you.^[29] Within 90 days of receipt of any opposition to your suspension and proposed debarment, the Bureau, in the absence of extraordinary circumstances, will provide you with notice of its decision to debar.^[30] If the Bureau decides to debar you, its decision will become effective upon the earlier of your receipt of a debarment notice or publication of the decision in the Federal Register.^[31]

If and when your debarment becomes effective, you will be prohibited from participating in activities associated with or related to the schools and libraries support mechanism for three years from the date of debarment.^[32] The Bureau may, if necessary to protect the public interest, extend the debarment period.^[33]

Please direct any response, if by messenger or hand delivery, to Marlene H. Dortch, Secretary, Federal Communications Commission, 236 Massachusetts Avenue, NE., Suite 110, Washington, DC 20002, to the attention of Diana Lee, Attorney Advisor, Investigations and Hearings Division, Enforcement Bureau, Room 4-C330, with a copy to Vickie Robinson, Assistant Chief, Investigations and Hearings Division, Enforcement Bureau, Room 4-C330, Federal Communications Commission. If sent by commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail), the response should be sent to the Federal Communications Commission, 9300 East Hampton Drive, Capitol Heights, Maryland 20743. If sent by first-class, Express, or Priority mail, the response should be sent to Diana Lee, 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 Vickie Robinson, Assistant 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 the response via e-mail to [e-mail] and to [e-mail].

If you have any questions, please contact Ms. Lee via mail, by telephone at [phone] or by e-mail at [e-mail]. If Ms. Lee is unavailable, you may contact Ms. Vickie Robinson, Assistant Chief, Investigations and Hearings Division, by telephone at [phone] and by e-mail at [e-mail].

Sincerely yours,

Hillary S. DeNigro,

Chief, Investigations and Hearings Division, Enforcement Bureau.

cc: Kristy Carroll, Esq., Universal Service Administrative Company (via e-mail).

Anthony E. Kaplan, Esq., Supervisory Assistant United States Attorney.

Calvin B. Kurimai, Esq., Assistant United States Attorney.

Footnotes

1.  See 47 CFR 0.111(a), 54.8.

2.  Letter from Hillary S. DeNigro, Chief, Investigations and Hearings Division, Enforcement Bureau, Federal Communications Commission, to Mr. Keith J. Madeiros, Notice of Suspension and Initiation of Debarment Proceedings, 23 FCC Rcd 465 (Inv. & Hearings Div., Enf. Bur. 2008) (Attachment 1).

3.  73 FR 18797 (April 7, 2008).

4.  See Notice of Suspension, 23 FCC Rcd at 466-68.

5.  See 47 CFR 54.8(e)(3) and (4). That date occurred no later than May 6, 2008. See supra note 3.

6.  See Notice of Suspension, 23 FCC Rcd at 466.

7.  See id.

8.  Id. at 466; 47 CFR 54.8(c).

9.  See Notice of Suspension, 23 FCC Rcd at 468.

10.  See 47 CFR 54.8(a)(1), 54.8(a)(5), 54.8(d); Notice of Suspension, 23 FCC Rcd at 468.

11.  Any further reference in this letter to “your conviction” refers to your February 13, 2007 guilty plea and subsequent conviction of mail fraud. United States v. Keith J. Madeiros, Criminal Docket No. 3:07-CR-29-RNC-2, Plea Agreement (D. Conn. filed Feb. 13, 2007 and entered Feb. 15, 2007) (“Madeiros Plea Agreement”); United States v. Keith J. Madeiros, 3:07-CR-29-RNC-2, Judgment (D. Conn. filed and entered Dec. 10, 2007) (“Madeiros Judgment”).

12.  47 CFR 54.8; 47 CFR 0.111 (delegating to the Enforcement Bureau authority to resolve universal service suspension and debarment proceedings). The Commission adopted debarment rules for the schools and libraries universal service support mechanism 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 section 54.521 to suspend and debar parties from the E-rate program). In 2007, the Commission extended the debarment rules to apply to all of the 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; Lifeline and Link Up; Changes to the Board of Directors for the National Exchange Carrier Association, Inc., Report and Order, 22 FCC Rcd 16372, 16410-12 (2007) (Program Management Order) (renumbering section 54.521 of the universal service debarment rules as section 54.8 and amending subsections (a)(1), (5), (c), (d), (e)(2)(i), (3), (e)(4), and (g)).

13.  See 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).

14.  See Madeiros Plea Agreement at 1; United States v. Richard E. Brown and Keith J. Madeiros., Criminal Docket No. 3:07-CR-29-RNC-2, Information, paras. 1-21 (D. Conn. filed Feb. 13, 2007 and entered Feb. 14, 2007) (“Madeiros/Brown Information”).

15.  See Madeiros/Brown Information at paras. 8-9; http://newhaven.fbi.gov/​dojpressrel/​2007/​nh120707.htm (last accessed Dec. 11, 2007) (“DOJ December 7 Press Release”). The Bureau has debarred Richard E. Brown from the E-Rate program. See Letter from Hillary S. DeNigro to Richard E. Brown, Notice of Debarment, DA 07-4732 (Enf. Bur., Investigations & Hearings Div., rel. Nov. 27, 2007).

16.  See Madeiros/Brown Information at para. 9; DOJ December 7 Press Release at 1.

17.  See Madeiros/Brown Information at paras. 11-21. The Bureau also has debarred Scott A. Federowicz from the E-Rate program. See Letter from Hillary S. DeNigro to Scott A. Federowicz, Notice of Debarment, 22 FCC Rcd 17258 (Enf. Bur., Investigations & Hearings Div., rel. Sept. 24, 2007).

18.  See Madeiros/Brown Information at paras. 11-21; DOJ December 7 Press Release at 1.

19.  See DOJ December 7 Press Release at 1.

20.  47 CFR 54.8(a)(4). See Second Report and Order, 18 FCC Rcd at 9225-9227, paras. 67-74.

21.  47 CFR 54.8(a)(1), (d).

22.  Second Report and Order, 18 FCC Rcd at 9226, para. 69; 47 CFR 54.8(e)(1).

23.  47 CFR 54.8(e)(4).

24.  Id.

25.  47 CFR 54.8(e)(5).

26.  See Second Report and Order, 18 FCC Rcd at 9226, para. 70; 47 CFR 54.8(e)(5), 54.8(f).

27.  “Causes for suspension and debarment are the 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). Such 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.” 47 CFR. 54.8(a)(1).

28.  See Second Report and Order, 18 FCC Rcd at 9226, para. 70; 47 CFR 54.8(e)(3).

29.  Second Report and Order, 18 FCC Rcd at 9227, para. 74.

30.  See id., 18 FCC Rcd at 9226, para. 70; 47 CFR 54.8(e)(5).

31.  Id. 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. 47 CFR 54.8(f).

32.  Second Report and Order, 18 FCC Rcd at 9225, para. 67; 47 CFR 54.8(d), 54.8(g).

33.  Id.