# May 19, 2008

# **DA 08-1182**

# 

# **[VIA CERTIFIED MAIL]{.underline}** 

## [RETURN RECEIPT REQUESTED AND FACSIMILE (510-452-8405)]{.underline}

Ms. Judy Green

c/o Erik G. Babcock

Law Offices of Erik Babcock

1212 Broadway, Suite 726

Oakland, CA 94612

> **Re: Notice of Suspension and Initiation of Debarment Proceedings,**
>
> **File No. EB-08-IH-1139**

Dear Ms. Green:

The Federal Communications Commission ("FCC" or "Commission") has
received notice of your conviction on multiple counts of fraud,
collusion, aiding and abetting, and conspiracy to commit wire and mail
fraud, in violation of 15 U.S.C § 1 and 18 U.S.C. §§ 2, 371, and 1343,
in connection with your participation in the schools and libraries
universal service support mechanism ("E-Rate program").[^1]
Consequently, pursuant to 47 C.F.R. § 54.8, this letter constitutes
official notice of your suspension from the E-Rate program. In addition,
the Enforcement Bureau ("Bureau") hereby notifies you that we are
commencing debarment proceedings against you.[^2]

I.  **Notice of Suspension**

The Commission has established procedures to prevent persons who have
"defrauded the government or engaged in similar acts through activities
associated with or related to the schools and libraries support
mechanism" from receiving the benefits associated with that program.[^3]
On March 19, 2008, the United States District Court in San Francisco
sentenced you to serve seven and a half years in prison following your
conviction of twenty-two counts of fraud, collusion, aiding and
abetting, and conspiracy in connection with your leadership of multiple
schemes to defraud the E-Rate program.[^4] As a former education
consultant and sales representative for the companies Video Network
Communications, Inc. ("VNCI") and ADJ Consultants, Inc. ("ADJ"), you
orchestrated multiple fraudulent schemes and conspiracies involving more
than twenty-five separate E-Rate projects in school districts throughout
seven states from 1998 to 2003.[^5] The fraudulent schemes involved
conspiring with various individuals and businesses for the purpose of
engaging in conduct in restraint of competition by submitting collusive,
noncompetitive, or rigged bids for telecommunications services eligible
for E-Rate subsidies and ensuring telecommunications services contracts
were awarded to conspirators and bids from non-conspirators were
disqualified.[^6] The schemes also involved inflating the costs of
eligible equipment and services in applications for funding submitted to
Universal Service Administrative Company ("USAC") in order to pay for
ineligible equipment and services and by misrepresenting schools'
ability and willingness to pay for their portion of the school
projects.[^7]

Pursuant to section 54.8(a)(4) of the Commission's rules,[^8] your
conviction requires the Bureau to suspend you from participating in any
activities associated with or related to the schools and libraries fund
mechanism, including the receipt of funds or discounted services through
the schools and libraries fund mechanism, or consulting with, assisting,
or advising applicants or service providers regarding the schools and
libraries support mechanism.[^9] Your suspension becomes effective upon
the earlier of your receipt of this letter or publication of notice in
the Federal Register.[^10]

Suspension is immediate pending the Bureau's final debarment
determination. In accordance with the Commission's debarment rules, you
may contest this suspension or the scope of this suspension by filing
arguments in opposition to the suspension, with any relevant
documentation. Your request must be received within 30 days after you
receive this letter or after notice is published in the Federal
Register, whichever comes first.[^11] Such requests, however, will not
ordinarily be granted.[^12] The Bureau may reverse or limit the scope of
suspension only upon a finding of extraordinary circumstances.[^13]
Absent extraordinary circumstances, the Bureau will decide any request
for reversal or modification of suspension within 90 days of its receipt
of such request.[^14]

II. **Initiation of Debarment Proceedings**

Your conviction of criminal conduct in connection with the E-Rate
program, in addition to serving as a basis for immediate suspension from
the program, also serves as a basis for the initiation of debarment
proceedings against you. Your conviction falls within the categories of
causes for debarment defined in section 54.8(c) of the Commission's
rules.[^15] Therefore, pursuant to section 54.8(a)(4) of the
Commission's rules, your conviction requires the Bureau to commence
debarment proceedings against you.

As with your suspension, you may contest debarment or the scope of the
proposed debarment by filing arguments and any relevant documentation
within 30 calendar days of the earlier of the receipt of this letter or
of publication in the Federal Register.[^16] Absent extraordinary
circumstances, the Bureau will debar you.[^17] Within 90 days of receipt
of any opposition to your suspension and proposed debarment, the Bureau,
in the absence of extraordinary circumstances, will provide you with
notice of its decision to debar.[^18] If the Bureau decides to debar
you, its decision will become effective upon the earlier of your receipt
of a debarment notice or publication of the decision in the Federal
Register.[^19]

If and when your debarment becomes effective, you will be prohibited
from participating in activities associated with or related to the
schools and libraries support mechanism for at least three years from
the date of debarment.[^20] The Bureau may, if necessary to protect the
public interest, extend the debarment period.[^21]

Please direct any response, if by messenger or hand delivery, to Marlene
H. Dortch, Secretary, Federal Communications Commission, 236
Massachusetts Avenue, N.E., Suite 110, Washington, D.C. 20002, to the
attention of Diana Lee, Attorney Advisor, Investigations and Hearings
Division, Enforcement Bureau, Room 4-C330, with a copy to Vickie
Robinson, Assistant Chief, Investigations and Hearings Division,
Enforcement Bureau, Room 4-C330, Federal Communications Commission. If
sent by commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail), the response should be sent to the
Federal Communications Commission, 9300 East Hampton Drive, Capitol
Heights, Maryland 20743. If sent by first-class, Express, or Priority
mail, the response should be sent to Diana Lee, Attorney Advisor,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, 445 12^th^ Street, S.W., Room 4-C330,
Washington, DC, 20554, with a copy to Vickie Robinson, Assistant Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, 445 12^th^ Street, S.W., Room 4-C330,
Washington, DC, 20554. You shall also transmit a copy of the response
via email to diana.lee@fcc.gov and to vickie.robinson@fcc.gov.

If you have any questions, please contact Ms. Lee via mail, by telephone
at (202) 418-1420 or by e-mail at diana.lee@fcc.gov. If Ms. Lee is
unavailable, you may contact Ms. Vickie Robinson, Assistant Chief,
Investigations and Hearings Division, by telephone at (202) 418-1420 and
by e-mail at vickie.robinson@fcc.gov.

> Sincerely yours,

Hillary S. DeNigro

Chief

Investigations and Hearings Division

Enforcement Bureau

cc: Kristy Carroll, Esq., Universal Service Administrative Company (via
e-mail)

Michael Wood, Antitrust Division, United States Department of Justice
(via mail)

[^1]: Any further reference in this letter to "your conviction" refers
    to your twenty-two count conviction. *United States v. Judy Green*,
    Criminal Docket No. 3:05-CR-00208-WHA-007, Judgment (N.D.Cal. filed
    and entered March 19, 2008) ("*Judy Green Judgment*").

[^2]: 47 C.F.R. § 54.8; 47 C.F.R. § 0.111 (delegating to the Enforcement
    Bureau authority to resolve universal service suspension and
    debarment proceedings). The Commission adopted debarment rules for
    the schools and libraries universal service support mechanism in
    2003. *See Schools and Libraries Universal Service Support
    Mechanism*, Second Report and Order and Further Notice of Proposed
    Rulemaking, 18 FCC Rcd 9202 (2003) ("*Second Report and Order*")
    (adopting section 54.521 to suspend and debar parties from the
    E-rate program). In 2007, the Commission extended the debarment
    rules to apply to all of the Federal universal service support
    mechanisms. *Comprehensive Review of the Universal Service Fund
    Management, Administration, and Oversight; Federal-State Joint Board
    on Universal Service; Schools and Libraries Universal Service
    Support Mechanism; Lifeline and Link Up; Changes to the Board of
    Directors for the National Exchange Carrier Association, Inc.*,
    Report and Order, 22 FCC Rcd 16372, 16410-12 (2007) (*Program
    Management Order*) (renumbering section 54.521 of the universal
    service debarment rules as section 54.8 and amending subsections
    (a)(1), (5), (c), (d), (e)(2)(i), (3), (e)(4), and (g)).

[^3]: *See* *Second Report and Order*, 18 FCC Rcd at 9225, ¶ 66;
    *Program Management Order*, 22 FCC Rcd at 16387, ¶ 32. The
    Commission's debarment rules define a "person" as "\[a\]ny
    individual, group of individuals, corporation, partnership,
    association, unit of government or legal entity, however,
    organized." 47 C.F.R. § 54.8(a)(6).

[^4]: *See* http://www.usdoj.gov/opa/pr/2008/March/08_at_219.html
    (accessed Apr. 22, 2008) ("*DOJ March 19, 2008 Judy Green Press
    Release*"); *Judy Green Judgment* at 1.

[^5]: *See United States v. Video Network Communications, Inc. et al*.,
    Criminal Docket No. 3:05-CR-00208-CRB, Superseding Indictment at
    ¶¶ 5, 15 (N.D.Cal.filed Dec. 8, 2005 and entered Dec. 12, 2005) also
    available at http://www.usdoj.gov/atr/cases/f213600/213626.htm
    (accessed May 1, 2008) ("*VNCI Superseding Indictment*"); *see also
    DOJ March 19, 2008 Judy Green Press Release*. The following four
    individuals, who were also charged in the *VNCI Superseding
    Indictment*, have pled guilty and subsequently have been sentenced:
    Earl Nelson, George Marchelos, William Holman and Allan Green. We
    are sending separate notices of suspension and initiation of
    debarment proceedings to these individuals. VNCI and ADJ are now
    defunct; charges against these companies have been dropped.

[^6]: *See VNCI Superceding Indictment* at ¶¶ 79-151; *DOJ March 19,
    2008 Judy Green Press Release* at 1.

[^7]: *See VNCI Superceding Indictment* at ¶¶ 12-78; *DOJ March 19, 2008
    Judy Green Press Release* at 1.

[^8]: 47 C.F.R. § 54.8(a)(4). *See* *Second Report and Order*, 18 FCC
    Rcd at 9225-9227, ¶¶ 67-74.

[^9]: 47 C.F.R. §§ 54.8(a)(1), (d).

[^10]: *Second Report and Order*, 18 FCC Rcd at 9226, ¶ 69; 47 C.F.R. §
    54.8(e)(1).

[^11]: 47 C.F.R. § 54.8(e)(4).

[^12]: *Id*.

[^13]: 47 C.F.R. § 54.8(e)(5).

[^14]: *See Second Report and Order*, 18 FCC Rcd at 9226, ¶ 70; 47
    C.F.R. §§ 54.8(e)(5), 54.8(f).

[^15]: "Causes for suspension and debarment are the conviction of or
    civil judgment for attempt or commission of criminal fraud, theft,
    embezzlement, forgery, bribery, falsification or destruction of
    records, making false statements, receiving stolen property, making
    false claims, obstruction of justice and other fraud or criminal
    offense arising out of activities associated with or related to the
    schools and libraries support mechanism, the high-cost support
    mechanism, the rural healthcare support mechanism, and the
    low-income support mechanism." 47 C.F.R. § 54.8(c). Such activities
    "include the receipt of funds or discounted services through \[the
    Federal universal service\] support mechanisms, or consulting with,
    assisting, or advising applicants or service providers regarding
    \[the Federal universal service\] support mechanisms." 47 C.F.R.
    § 54.8(a)(1).

[^16]: *See Second Report and Order,* 18 FCC Rcd at 9226, ¶ 70; 47
    C.F.R. § 54.8(e)(3).

[^17]: *Second Report and Order,* 18 FCC Rcd at 9227, ¶ 74.

[^18]: *See id.,* 18 FCC Rcd at 9226, ¶ 70; 47 C.F.R. § 54.8(e)(5).

[^19]: *Id*. The Commission may reverse a debarment, or may limit the
    scope or period of debarment upon a finding of extraordinary
    circumstances, following the filing of a petition by you or an
    interested party or upon motion by the Commission. 47 C.F.R. §
    54.8(f).

[^20]: *Second Report and Order*, 18 FCC Rcd at 9225, ¶ 67; 47 C.F.R. §§
    54.8(d), 54.8(g).

[^21]: *Id*.