On June 18, 2008, Howe Electric Inc., a California-based electrical contractor, pled guilty and agreed to pay a fine of $3.3 million for rigging bids on Federal Communications Commission’s (“FCC”) E-Rate Program (“E-Rate”) projects in two Fresno, CA schools. The company will pay a total of $300,000 in criminal fines and $3 million in restitution.

The Telecommunication Act of 1996 authorized the E-Rate Program to provide economically disadvantaged school districts and libraries with funds to connect to the internet.

According to the charges, Howe Electric entered into agreements with a co-conspirator, Judy N. Green, who steered contracts for E-Rate projects at the West Fresno Elementary School District and W.E.B. DuBois Charter School to the electric company. In exchange, Howe Electric agreed to award subcontracts to other vendors which had the opportunity to bid against Howe Electric but refrained. Ms. Green was convicted and sentenced to 7½ years in prison for her role in these two conspiracies.

As a result of this ongoing investigation a total of seven companies and 16 individuals have pleaded guilty, have been convicted and found guilty, or entered civil settlements, resulting in more than $40 million in criminal fines, civil settlements and restitution and jail sentences totaling nearly 29 years. Trials are currently pending in three additional E-Rate cases, and one individual remains an international fugitive.

Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com