[Federal Register Volume 74, Number 127 (Monday, July 6, 2009)]
[Notices]
[Pages 31947-31949]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-15823]


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FEDERAL COMMUNICATIONS COMMISSION

[DA 09-1345]


Notice of Suspension and Initiation of Debarment Proceedings; 
Schools and Libraries Universal Service Support Mechanism

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: The Enforcement Bureau (the ``Bureau'') gives notice of Mr. 
Douglas A. Benit's suspension from the schools and libraries universal 
service support mechanism (or ``E-Rate Program''). Additionally, the 
Bureau gives notice that debarment proceedings are commencing against 
him. Mr. Benit, or any person who has an existing contract with or 
intends to contract with him to provide or receive services in matters 
arising out of activities associated with or related to the schools and 
libraries support, may respond by filing an opposition request, 
supported by documentation to Rebekah Bina, Federal Communications 
Commission, Enforcement Bureau, Investigations and Hearings Division, 
Room 4-C330, 445 12th Street, SW., Washington, DC 20554.

DATES: Opposition requests must be received by August 5, 2009. However, 
an opposition request by the party to be suspended must be received 30 
days from the receipt of the suspension letter or August 5, 2009, 
whichever comes first. The Bureau will decide any opposition request 
for reversal or modification of suspension or debarment within 90 days 
of its receipt of such requests.

FOR FURTHER INFORMATION CONTACT: Rebekah Bina, Federal Communications 
Commission, Enforcement Bureau, Investigations and Hearings Division, 
Room 4-C330, 445 12th Street, SW., Washington, DC 20554. Rebekah Bina 
may be contacted by phone at (202) 418-7931 or e-mail at 
<a href="/cdn-cgi/l/email-protection#85d7e0e7e0eee4edabc7ecebe4c5e3e6e6abe2eaf3"><span class="__cf_email__" data-cfemail="6c3e090e09070d04422e05020d2c0a0f0f420b031a">[email protected]</span></a>. If Ms. Bina is unavailable, you may contact Ms. 
Michele Berlove, Acting Assistant Chief, Investigations and Hearings 
Division, by telephone at (202) 418-1477 and by e-mail at 
<a href="/cdn-cgi/l/email-protection#82cfebe1eae7eee7acc0e7f0eeedf4e7c2e4e1e1ace5edf4"><span class="__cf_email__" data-cfemail="da97b3b9b2bfb6bff498bfa8b6b5acbf9abcb9b9f4bdb5ac">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: The Bureau has suspension and debarment 
authority pursuant to 47 CFR 54.8 and 47 CFR 0.111(a)(14). Suspension 
will help to ensure that the party to be suspended cannot continue to 
benefit from the schools and libraries mechanism pending resolution of 
the debarment process. Attached is the suspension letter, DA 09-1345, 
which was mailed to Mr. Benit and released on June 17, 2009. The 
complete text of the notice of suspension and initiation of debarment 
proceedings is available for public inspection and copying during 
regular business hours at the FCC Reference Information Center, Portal 
II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. In 
addition, the complete text is available on the FCC's Web site at 
http://www.fcc.gov. The text may also be purchased from the 
Commission's duplicating inspection and copying during regular business 
hours at the contractor, Best Copy and Printing, Inc., Portal II, 445 
12th Street, SW., Room CY-B420, Washington, DC 2055, telephone (202) 
488-5300 or (800) 378-3160, facsimile (202) 488-5563, or via e-mail 
http://www.bcpiweb.com.

Federal Communications Commission.
Hillary S. DeNigro,
Chief, Investigations and Hearings Division, Enforcement Bureau.

    The suspension letter follows:

June 17, 2009

DA 09-1345

VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED
AND E-MAIL (<a href="/cdn-cgi/l/email-protection#167372617f657e7879615677797a3875797b"><span class="__cf_email__" data-cfemail="cca9a8bba5bfa4a2a3bb8cada3a0e2afa3a1">[email protected]</span></a>) AND FACSIMILE (248) 258-6007
Mr. Douglas A. Benit, c/o Edward C. Wishnow, 240 Daines, Birmingham, MI 
48009

Re: Notice of Suspension and Initiation of Debarment Proceedings, File 
No. EB-09-IH-0402

    Dear Mr. Benit: The Federal Communications Commission (``FCC'' or 
``Commission'') has received notice of your conviction of mail fraud, 
in violation of 18 U.S.C. 2, 1341, and 1346 in connection with your 
participation in the schools and libraries universal service support 
mechanism (``E-Rate program'').\1\ Consequently, pursuant to 47 CFR 
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\
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    \1\ Any further reference in this letter to ``your conviction'' 
refers to your guilty plea and subsequent conviction of one count of 
mail fraud. United States v. Douglas A. Benit, Criminal Docket No. 
2:06CR20285-1, Plea Agreement (D. Mich. filed Nov. 24, 2008 and 
entered Nov. 25, 2008) (``Douglas Benit Plea Agreement''); United 
States v. Douglas A. Benit, Criminal Docket No. 2:06CR20285-1, 
Judgment (D. Mich. filed Mar. 31, 2009 and entered Apr. 1, 2009) 
(``Douglas Benit Judgment''). See also United States v. Douglas A. 
Benit, Criminal Docket No. 2:06CR20285, Indictment (D. Mich. filed 
May 24, 2006 and entered May 25, 2006) (``Benit Indictment''). You 
also plead guilty to one count of bank fraud, in violation of 18 
U.S.C. 2 and 1344. See Douglas Benit Plea Agreement; see also 
Douglas Benit Judgment. This notice of suspension and initiation of 
debarment proceedings arises from your conviction of mail fraud, and 
as such, does not discuss your guilty plea and subsequent conviction 
of bank fraud.
    \2\ 47 CFR 54.8; 47 CFR 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)).

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[[Page 31948]]

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 November 24, 2008, you, Douglas A. Benit,\4\ plead 
guilty to mail fraud in connection with your participation in the E-
Rate program.\5\ Specifically, you were employed as a school official 
in the Ecorse Public Schools District (``EPS'' or ``District'') from 
1997 to 2003, serving first as the Director of Facility Development and 
subsequently as the Assistant Superintendent.\6\ While employed at EPS, 
you were also an owner, employee, agent or subcontractor of Coral 
Technology, Inc. (``Coral'').\7\ During your tenure at EPS, you were 
responsible for approving the construction of new facilities in the 
District using funds from several sources, including the E-Rate 
program.\8\ You admitted that while employed at EPS and while 
concealing your associations with Coral from EPS, you and others 
devised a scheme to defraud the District and the E-Rate program by 
steering contracts for EPS to various companies that directly or 
indirectly benefited you and your companies, primarily Coral.\9\ In 
furtherance of the scheme, you submitted to the Universal Service 
Administrative Company (``USAC'') documents supporting Coral's 
application for federal E-Rate funding, while employed at EPS and 
within the scope of your official responsibilities.\10\ As a result of 
these contracts, which were paid in part from the E-Rate program, you 
and your company personally benefited from the fraudulent scheme by at 
least $2.276 million.\11\
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    \3\ Second Report and Order, 18 FCC Rcd at 9225, ] 66. 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 CFR 54.8(a)(6).
    \4\ Also known as J.D. Howen, D.J. Howen, and Jack Howen. See 
Douglas Benit Indictment.
    \5\ See supra note 1. See Douglas Benit Plea Agreement. See also 
Department of Justice Press Release (Mar. 26, 2009), available at 
http://www.usdoj.gov/criminal/npftf/pr/press_releases/2009/mar/03-26-09benit-sentenced.pdf (DOJ March 2009 Press Release). See also 
Benit Indictment at 18 (Count 4).
    \6\ Benit Indictment at 1-4; see also Douglas Benit Plea 
Agreement at 2-3.
    \7\ See Benit Indictment at 3.
    \8\ Id.
    \9\ Id. at 1-15, 18; see also Douglas Benit Plea Agreement at 2-
3.
    \10\ Benit Indictment at 10-14.
    \11\ See Douglas Benit Plea Agreement at 3.
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    On March 31, 2009, you were sentenced to serve forty-six months in 
federal prison, to be followed by thirty-six months of supervised 
release for your role in the scheme to defraud EPS and the E-Rate 
program. You were also ordered to pay $1.34 million in restitution for 
your role in the scheme.\12\
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    \12\ See Douglas Benit Judgment at 1, 5 (ordering $1.34 million 
for your role in the schemes; $489,702 in restitution to the Ecorse 
Public Schools and $853,000 to USAC); see also DOJ March 2009 Press 
Release at 1.
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    Pursuant to section 54.8(a)(4) of the Commission's rules,\13\ 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.\14\ Your suspension becomes 
effective upon the earlier of your receipt of this letter or 
publication of notice in the Federal Register.\15\
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    \13\ 47 CFR 54.8(a)(4). See Second Report and Order, 18 FCC Rcd 
at 9225-27, ]] 67-74.
    \14\ 47 CFR 54.8(a)(1)(d).
    \15\ Second Report and Order, 18 FCC Rcd at 9226, ] 69; 47 CFR 
54.8(e)(1).
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    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.\16\ Such requests, however, will not 
ordinarily be granted.\17\ The Bureau may reverse or limit the scope of 
suspension only upon a finding of extraordinary circumstances.\18\ 
Absent extraordinary circumstances, the Bureau will decide any request 
for reversal or modification of suspension within 90 days of its 
receipt of such request.\19\
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    \16\ 47 CFR 54.8(e)(4).
    \17\ Id.
    \18\ 47 CFR 54.8(e)(5).
    \19\  See Second Report and Order, 18 FCC Rcd at 9226, ] 70; 47 
CFR 54.8(e)(5), (f).
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II. Initiation of Debarment Proceedings

    Your guilty plea to 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.\20\ Therefore, pursuant to section 54.8(a)(4) of 
the Commission's rules, your conviction requires the Bureau to commence 
debarment proceedings against you.
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    \20\ ``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.'' 47 CFR 
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 
mechanism.'' 47 CFR 54.8(a)(1).
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    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.\21\ Absent 
extraordinary circumstances, the Bureau will debar you.\22\ 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.\23\ 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.\24\
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    \21\  See Second Report and Order, 18 FCC Rcd at 9226, ] 70; 47 
CFR 54.8(e)(3).
    \22\  Second Report and Order, 18 FCC Rcd at 9227, ] 74.
    \23\  See id., 18 FCC Rcd at 9226, ] 70; 47 CFR 54.8(e)(5).
    \24\ 47 CFR 54.8(e)(5). 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 CFR 
54.8(f).
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    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 three years from the 
date of debarment.\25\ The Bureau may, if necessary to protect the 
public interest, extend the debarment period.\26\
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    \25\ Second Report and Order, 18 FCC Rcd at 9225, ] 67; 47 CFR 
54.8(d), (g).
    \26\ 47 CFR 54.8(g).
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    Please direct any response, if by messenger or hand delivery, to 
Marlene H. Dortch, Secretary, Federal Communications Commission, 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002, to the 
attention

[[Page 31949]]

of Rebekah Bina, Attorney Advisor, Investigations and Hearings 
Division, Enforcement Bureau, Room 4-C330, with a copy to Michele 
Berlove, Acting 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 Rebekah Bina, Attorney Advisor, 
Investigations and Hearings Division, Enforcement Bureau, Federal 
Communications Commission, 445 12th Street, SW., Room 4-C330, 
Washington, DC 20554, with a copy to Michele Berlove, Acting Assistant 
Chief, Investigations and Hearings Division, Enforcement Bureau, 
Federal Communications Commission, 445 12th Street, SW., Room 4-C330, 
Washington, DC 20554. You shall also transmit a copy of the response 
via e-mail to <a href="/cdn-cgi/l/email-protection#cf9daaadaaa4aea7e18da6a1ae8fa9acace1a8a0b9"><span class="__cf_email__" data-cfemail="c89aadaaada3a9a0e68aa1a6a988aeababe6afa7be">[email protected]</span></a> and to <a href="/cdn-cgi/l/email-protection#c78aaea4afa2aba2e985a2b5aba8b1a287a1a4a4e9a0a8b1"><span class="__cf_email__" data-cfemail="14597d777c7178713a567166787b6271547277773a737b62">[email protected]</span></a>.
    If you have any questions, please contact Ms. Bina via mail, by 
telephone at (202) 418-7931 or by e-mail at <a href="/cdn-cgi/l/email-protection#4d1f282f28262c25630f24232c0d2b2e2e632a223b"><span class="__cf_email__" data-cfemail="89dbecebece2e8e1a7cbe0e7e8c9efeaeaa7eee6ff">[email protected]</span></a>. If 
Ms. Bina is unavailable, you may contact Ms. Michele Berlove, Acting 
Assistant Chief, Investigations and Hearings Division, by telephone at 
(202) 418-1477 and by e-mail at <a href="/cdn-cgi/l/email-protection#014c686269646d642f4364736d6e7764416762622f666e77"><span class="__cf_email__" data-cfemail="1b567278737e777e35597e6977746d7e5b7d7878357c746d">[email protected]</span></a>.

 Sincerely yours,

Hillary S. DeNigro,
    Chief, Investigations and Hearings Division, Enforcement Bureau.

cc: Taurus N. Ziedas, United States Attorney's Office, Department of 
Justice (via e-mail); Kristy Carroll, Esq., Universal Service 
Administrative Company (via e-mail)

[FR Doc. E9-15823 Filed 7-2-09; 8:45 am]
BILLING CODE 6712-01-P


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