Jam Piper Jam
Truth Seeker
NEC Unit Admits It Defrauded Schools
By MATT RICHTEL and GARY RIVLIN
http://www.nytimes.com/2004/05/28/technology/28net.html?th=&pagewanted=print&position=
SAN FRANCISCO, May 27 - Criminal investigations into corruption and waste in the E-Rate program, a federal plan to bring Internet access to poor schools and libraries, yielded their biggest legal settlement to date on Thursday. NEC Business Network Solutions, a subsidiary of NEC, the computer giant, agreed to plead guilty to two federal felony counts, one for wire fraud and one for antitrust violation, and to pay $20.7 million in fines and restitution.
The settlement, announced in federal court in San Francisco, comes amid increasing scrutiny of the multibillion-dollar E-Rate program. Congressional hearings on the program may be held as early as next month, according to Congressional staff members. Lawyers involved in the case said there were likely to be additional, and even larger, settlements with other technology vendors.
"This is just one piece of a nationwide scheme that is all coming to light," said Eric R. Havian, a lawyer who is representing the San Francisco Unified School District, which tipped federal prosecutors to the fraud. "There are many school districts that were victimized."
Gerald P. Kenney, general counsel of NEC America, said in a statement: "We made mistakes with E-Rate. We've acknowledged and accepted responsibility for those mistakes, cooperated fully with the government and taken action to ensure that these problems can't happen again."
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By MATT RICHTEL and GARY RIVLIN
http://www.nytimes.com/2004/05/28/technology/28net.html?th=&pagewanted=print&position=
SAN FRANCISCO, May 27 - Criminal investigations into corruption and waste in the E-Rate program, a federal plan to bring Internet access to poor schools and libraries, yielded their biggest legal settlement to date on Thursday. NEC Business Network Solutions, a subsidiary of NEC, the computer giant, agreed to plead guilty to two federal felony counts, one for wire fraud and one for antitrust violation, and to pay $20.7 million in fines and restitution.
The settlement, announced in federal court in San Francisco, comes amid increasing scrutiny of the multibillion-dollar E-Rate program. Congressional hearings on the program may be held as early as next month, according to Congressional staff members. Lawyers involved in the case said there were likely to be additional, and even larger, settlements with other technology vendors.
"This is just one piece of a nationwide scheme that is all coming to light," said Eric R. Havian, a lawyer who is representing the San Francisco Unified School District, which tipped federal prosecutors to the fraud. "There are many school districts that were victimized."
Gerald P. Kenney, general counsel of NEC America, said in a statement: "We made mistakes with E-Rate. We've acknowledged and accepted responsibility for those mistakes, cooperated fully with the government and taken action to ensure that these problems can't happen again."
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