Antitrust Lawyer Blog Commentary on Current Developments

KANSAS OWNER OF COMPUTER SERVICE COMPANIES AND FAMILY MEMBER CHARGED WITH CONSPIRING TO DEFRAUD FCC E-RATE PROGRAM

On April 24, 2008, Leonard Douglas “Doug” LaDuron, a former owner of three Kansas computer service companies (Serious ISP Inc., Myco Technologies Inc. and Elephantine Corporation), and his mother, Mary Jo LaDuron (a.k.a. Mary Jo Gault) pled guilty to conspiracy charges to defraud the Federal Communications Commission’s (“FCC”) E-Rate Program. The E-Rate Program was authorized under the Telecommunications Act of 1996 to provide economically disadvantaged school districts and libraries with funds to connect to the internet. Mr. LaDuron was also charged with making false statements by misrepresenting his employment status to gain housing assistance to the U.S. Department of Urban Development.
Mr. LaDuron submitted false statements and withheld material facts from Universal Service Administrative Company, which administers the E-Rate Program for the FCC. Ms. LaDuron identified herself as a consultant and steered E-Rate contracts to companies owned by her son and two co-conspirators Benjamin Rowner and Jay H. Soled. Mr. Rowner and Mr. Soled were indicted yesterday on similar conspiracy charges to defraud the E-Rate program. At least 10 schools from New York to California were affected by this conspiracy.

As a result of the DOJ’s investigation into fraud and anticompetitive conduct in the E-Rate Program, a total of six companies and 12 individuals have pled guilty, have been convicted and found guilty, or entered civil settlements and have paid, agreed to pay, or been sentenced to pay, criminal fines and restitution totaling more than $40 million. Trials are currently pending in three additional E-Rate cases, and one individual remains an international fugitive.

Robert Doyle
(202) 589-1834
rdoyle@dbmlawgroup.com