Scandals swirl around eRate

The fed's eRate program seems to be attracting unscrupulous characters these days as 11 individuals and 10 companies have recently been charged with fraud and anti-competitive practices, eSchoolNews reports. The $2.25 billion program provides telecommunications discounts to public schools and libraries.

The latest to be charged are NextiraOne US, a Houston-based networking company, and a former Columbia, SC, school district official.

NextiraOne, whose US and Canadian operations were recently acquired by BlackBox, has been ordered to pay a $1.9 million criminal fine along with a civil settlement which requires the company to forfeit more than $2.6 million. They are charged with defrauding eRate and member schools of the Oglala Nation Educational Coalition on the Pine Ridge Reservation, part of the Sioux Tribe in South Dakota.

"These fraudulent schemes rob funds used to assist the neediest schools and libraries across the country," said Assistant Attorney General Thomas O. Barnett, who oversees DoJ's antitrust division.

In another case, the Department of Justice returned a 12-count indictment against Cynthia K Ayer, a former South Carolina school district official and the district's technology director, who allegedly committed mail fraud by awarding her company, Go Between Communications, contracts without a competitive bidding process. She allegedly submitted applications for more than $3.5 million in eRate funding to the FCC's Universal Service Administrative Co.

Of the 11 people and 10 companies charged in the Antitrust Division's ongoing investigation, six companies and three individuals have pleaded guilty or entered civil settlements, agreeing to pay fines anrestitution of more than $40 million.