Business

Tech Firm's Co-owner Sentenced for E-Rate Fraud

The former co-owner of Illinois networking vendor Global Networking Technologies was sentenced Tuesday to serve one year and one day in prison for his participation in a conspiracy to defraud a U.S. government program delivering Internet service to schools and libraries in poor areas.

Tyrone Pipkin, who gave bribes and kickbacks to school officials in four states, was also sentenced in U.S. District Court for the Eastern District of Louisiana to pay a US$6,000 fine for conspiring to defraud the E-Rate program, the U.S. Department of Justice said.

Pipkin, who acted on his own behalf and on behalf of Computer Training Associates and Global Networking Technologies, participated in the conspiracy from December 2001 to September 2005, the DOJ said in a press release. Pipken participated in a conspiracy to provide bribes and kickbacks to school employees responsible for the procurement of Internet services at schools in Arkansas, Florida, Illinois and Louisiana, the DOJ said.

The school employees gave control of the E-Rate competitive bidding process to Pipkin and his co-conspirators, allowing them to ensure E-Rate contracts at these schools were awarded to their companies, the DOJ said.

The DOJ's ongoing investigation into fraud and anticompetitive conduct in the E-Rate program has resulted in seven companies and 24 people either pleading guilty, being convicted or entering into civil settlements. The companies and people have been sentenced to pay fines and restitution of more than $40 million.

Seventeen people, including Pipkin, have been sentenced to serve prison time. Earlier this month, Barrett White, Pipkin's co-conspirator, was sentenced to one year and one day in prison for his role in the conspiracy, and Gloria Harper, a second conspirator, pleaded guilty to the conspiracy.

The E-Rate program was created by Congress in the Telecommunications Act of 1996 and is administered by the Universal Service Administrative Co., under the oversight of the U.S. Federal Communications Commission. The program provides subsidies to economically disadvantaged schools and libraries, paying 20 to 90 percent of the cost for Internet access and telecommunications services, as well as internal computer and communications networks.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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