Source: http://www.fcc.gov/print/node/45035
Timestamp: 2013-06-19 22:39:51
Document Index: 252290467

Matched Legal Cases: ['§ 63', '§ 63', '§ 63', '§ 63', '§ 63', '§ 63', '§ 63', '§ 63', '§ 503', '§ 1', '§ 312', '§ 503', '§ 1', '§ 63', '§ 63', '§ 214', '§ 63', '§ 503', '§ 503', '§ 1', '§ 2461', '§ 3701', '§ 214', '§ 63', '§ 503', '§ 1', '§ 1', '§ 503', '§ 503', '§ 1', '§ 1', '§ 1']

StanaCard, a Delaware limited liability company, is a resale provider primarily of prepaid international telecommunications services.9 On February 1, 2010, the Commission’s International Bureau (IB) granted international Section 214 authority to StanaCard.10 At that time, the Company also obtained blanket domestic Section 214 authority by operation of the Rules.11 5.
On January 27, 2012, StanaCard self-disclosed to the Enforcement Bureau (Bureau) that it apparently had: (a) failed to timely notify the Commission of a pro forma transfer of control of international Section 214 authority during 2010 and (b) had not obtained Commission approval before consummating a substantial transfer of control of domestic and international Section 214 authority during 2010.12 In response, the Bureau launched an investigation. 6.
Prior to October 23, 2010, Michael Choupak held an 88.88 percent membership interest (8000 out of a total of 9000 Class A Units) in StanaCard and was its managing member.13 On October 23, 2010, Mr. Choupak transferred half of that membership interest (44.44 percent or 4000 Class A Units) to Anastasia Koroleva.14 Mr. Choupak retained a 44.44 percent membership interest in StanaCard and 5 See 47 C.F.R. §§ 63.04, 63.18.
6 See 47 C.F.R. §§ 63.03(d); 63.24(f). 7 47 C.F.R. § 63.24(f).
8 47 C.F.R. § 63.03(d)(1). Notification must be given of pro forma transfers of control of domestic Section 214 authority that are consummated as part of a bankruptcy proceeding. See 47 C.F.R. § 63.03(d)(2). 9 See StanaCard, LLC, Joint International and Domestic Application for Consent to the Transfer of Control, Attach. I at 5, WC Docket No. 12-18, IBFS File No. ITC-T/C-20120116-00003 (filed Jan. 16, 2012) (Joint Domestic/International Sec. 214 Application); Domestic Section 214 Application Filed for the Transfer of Control of StanaCard, LLC; Streamlined Pleading Cycle Established, WC Docket No. 12-18, Public Notice, 27 FCC Rcd 427 (Wireline Comp. Bur. 2012).
10 International Authorizations Granted, Public Notice, 25 FCC Rcd 1860 (Int. Bur. 2010). 11 47 C.F.R. § 63.01; see also Section 402 Implementation Order, supra note 3.
12 Letter from Cheng-yi Liu, Law Offices of Thomas K. Crowe, P.C., Counsel to StanaCard, LLC, to Robert Krinsky, Attorney Advisor, Investigations and Hearings Div., FCC Enforcement Bureau (filed Jan. 27, 2012) (on file in EB-12-IH-0076).
13 See Joint Domestic/International Sec. 214 Application at 3; StanaCard, LLC, Notification of the Pro Forma Transfer of Control of International Section 214 Authority, IBFS File No. ITC-T/C-20120215-00051 at 1, 3 (filed Feb. 15, 2012) (StanaCard Pro Forma Int’l Sec. 214 Application).
14 See StanaCard Pro Forma Int’l Sec. 214 Application at Attach. 1 (Answer to Question 13). 2
remained its managing member.15 StanaCard did not notify the Commission of this transaction until February 15, 2012.16 On February 16, 2012, IB granted StanaCard’s application for approval of this transaction.17
In a separate transaction, on June 21, 2011 Mr. Choupak transferred his remaining 44.44 percent membership interest in StanaCard to Ms. Koroleva, who then held an 88.88 percent membership interest (8000 Class A Units) in StanaCard. 18 On the same day, Mr. Choupak resigned his role as managing member and Ms. Koroleva was elected as his replacement, putting her in control of the Company.19 On January 17, 2012, StanaCard filed an application for a substantial transfer of control of StanaCard’s domestic and international Section 214 authority from Mr. Choupak to Ms. Koroleva as well as requests for Special Temporary Authority (STA) to continue providing domestic and international service while its transfer of control application was pending. 20 On January 26, 2012, IB and the Commission’s Wireline Competition Bureau (WCB) granted StanaCard’s STA requests.21 On March 2, 2012 and March 9, 2012, IB and WCB respectively approved the transfer of control of StanaCard’s international and domestic Section 214 authority from Mr. Choupak to Ms. Koroleva.22
15 Joint Domestic/International Sec. 214 Application, Attach. 1 at 3 (stating that the October 23, 2010 transaction “effectively transferr[ed] control of the company to [Ms.] Koroleva”).
16 See Notification of Pro Forma Transfer of Control of International Section 214 Authorization, IBFS File No.: ITC-T/C-20120215-00051 (filed Feb. 15, 2012) (on file in EB-12-IH-0076) (notification of pro forma transfer of control of international Section 214 authority held by StanaCard) (Pro Forma Transfer of Control Notification).
17 See International Authorizations Granted – Section 214 Applications (47 C.F.R. 63.18); Section 310(b)(4) Requests, Public Notice, Report No. TEL-01546, 27 FCC Rcd 1998, 2001 (Int’l Bur. 2012) (notice of grant of IBFS File No. ITC-T/C-20120215-00051) (International Sec. 214 Pro Forma Transfer Grant Public Notice).
18 See Joint Domestic/International Sec. 214 Application, Attach. at 2–3.
20 Joint Domestic/International Sec. 214 Application, supra note 9; Streamlined International Applications Accepted for Filing, Section 214 Applications (47 C.F.R. § 63.18), Public Notice, Report No. TEL-01545S, 2012 WL 524111 ( rel. Feb. 17, 2012) (accepting for filing StanaCard’s application for consent to transfer control of international Section 214 authority from Mr. Choupak to Ms. Koroleva); IBFS File No. ITC-STA-20120116-00004 (filed Jan. 16, 2012) (Application for STA related to StanaCard’s application for consent to transfer control of international Section 214 authority from Mr. Choupak to Ms. Koroleva) (on file in EB-12-IH-0076); Domestic Section 214 Application for the Transfer of Control of StanaCard, LLC, WC Docket No. 12-18 (filed Jan. 17, 2012) ( StanaCard’s application for consent to transfer control of domestic Section 214 authority from Mr. Choupak to Ms. Koroleva) (on file in EB-12-IH-0076).
21 See International Authorizations Granted, Section 214 Applications (47 C.F.R. § 63.18), Public Notice, Report No. TEL-01548, 27 FCC Rcd 2351, 2354 (Int’l Bur. 2012) (International Sec. 214 Grant PN) (notice of grant of IBFS File No. ITC-T/C-20120116-00003); Domestic Section 214 Application Filed for the Transfer of Control of StanaCard, LLC, Streamlined Pleading Cycle Established, WC Docket No. 12-18, Public Notice, 27 FCC Rcd 427 n.2 (Wireline Comp. Bur. 2012).
22 See Domestic Section 214 Granted, Domestic Sec. 214 Application Filed for the Transfer of Control of StanaCard, LLC, WC Docket No. 12-18, Public Notice, 27 FCC Rcd 2381 (Wireline Comp. Bur. 2012); International Sec. 214 Grant PN, 27 FCC Rcd at 2354.
Under Section 503(b)(1) of the Act, any person who is determined by the Commission to have willfully or repeatedly failed to comply with any provision of the Act or any rule, regulation, or order issued by the Commission shall be liable to the United States for a forfeiture penalty.23 Section 312(f)(1) of the Act defines willful as “the conscious and deliberate commission or omission of [any] act, irrespective of any intent to violate” the law.24 The legislative history to Section 312(f)(1) of the Act clarifies that this definition of willful applies to both Sections 312 and 503(b) of the Act,25 and the Commission has so interpreted the term in the Section 503(b) context.26 The Commission may also assess a forfeiture for violations that are merely repeated, and not willful.27 “Repeated” means that the act was committed or omitted more than once, or lasts more than one day.28 To impose such a forfeiture penalty, the Commission must issue a notice of apparent liability, and the person against whom the notice has been issued must have an opportunity to show, in writing, why no such forfeiture penalty should be imposed.29 The Commission will then issue a forfeiture if it finds, based on the evidence, that the person has violated the Act or a Rule.30 9.
The issues in this case are whether StanaCard apparently violated Section 214 of the Act and Sections 63.03, 63.04, 63.18, and 63.24 of the Rules by willfully or repeatedly failing to provide timely notice of a pro forma transfer of control of international Section 214 authority and by willfully or repeatedly engaging in unauthorized transfers of control of its domestic and international Section 214 authority. We answer these questions in the affirmative. StanaCard apparently failed to give timely notice of a pro forma transfer of control of international Section 214 authority and apparently neglected to obtain prior authority for the substantial transfers of control of domestic and international Section 214 authority. Based on the facts and circumstances before us, we conclude that StanaCard is apparently liable for forfeiture penalties totaling twenty-one thousand dollars ($21,000). 10.
Section 63.24(f) of the Rules requires that a carrier provide notice to the Commission that it has consummated a pro forma international Section 214 transaction no later than 30 days after such consummation.31 We conclude that StanaCard apparently willfully or repeatedly violated this Rule in connection with Mr. Choupak’s October 23, 2010 assignment of half of his 88.88 percent membership interest in StanaCard to Ms. Koroleva, giving her a 44.44 percent membership interest in the Company.32 23 See 47 U.S.C. § 503(b)(1)(B); 47 C.F.R. § 1.80(a)(1). 24 47 U.S.C. § 312(f)(1).
25 See H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982).
26 See, e.g., Southern California Broadcasting Co., Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388, para. 5 (1991) (Southern California Broadcasting).
27 See, e.g., Callais Cablevision, Inc., Notice of Apparent Liability for Monetary Forfeiture, 16 FCC Rcd 1359, 1362, para. 10 (2001) (Callais Cablevision) (issuing an NAL for, inter alia, a cable television operator’s repeated violation of the cable signal leakage rules). 28 Southern California Broadcasting, 6 FCC Rcd at 4388, para. 5; Callais Cablevision, 16 FCC Rcd at 1362, para. 9.
29 47 U.S.C. § 503(b); 47 C.F.R. § 1.80(f).
30 See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589, 7591, para. 4 (2002).
31 See 47 C.F.R. § 63.24(f).
32 See supra paragraph 6.
As a result of this transaction, Mr. Choupak and Ms. Koroleva held equal membership interests in StanaCard, but Mr. Choupak retained his position as the managing member, which kept him in de factocontrol of the Company.33 StanaCard apparently failed to provide notice to the Commission of this pro forma transfer of control of an international Section 214 authorization within 30 days after the October 23, 2010 transaction. StanaCard did not notify the Commission of this pro forma international Section 214 transaction until nearly 15 months after the date the transaction notification was due.34 Based on a preponderance of the evidence, we find that StanaCard apparently willfully or repeatedly violated Section 214 of the Act and Section 63.24(f) of the Rules. 11.
We also conclude that StanaCard apparently violated Section 214 and related Rules35 by consummating substantial transfers of control of a domestic Section 214 authority and an international Section 214 authority without prior Commission approval. These two apparent violations arose from the June 21, 2011 transfer by Mr. Choupak of all of his membership interest in StanaCard to Ms. Koroleva, his resignation as manager of the Company, and the election of Ms. Koroleva as StanaCard’s managing member.36 These transactions transferred ultimate control of domestic and international Section 214 authority from Mr. Choupak to Ms. Koroleva. These apparent violations persisted for over six months before StanaCard filed corrective applications.37 Based on a preponderance of the evidence, we therefore find that in two instances StanaCard apparently willfully or repeatedly violated Section 214 of the Act and Sections 63.03, 63.04, 63.18, and 63.24 of the Rules.
Section 503(b)(1) of the Act provides that any person who willfully or repeatedly fails to comply with any provision of the Act or any rule, regulation, or order issued by the Commission shall be liable to the United States for a forfeiture penalty.38 Section 503(b)(2)(B) of the Act authorizes the Commission to assess a forfeiture of up to $150,000 for each violation or each day of a continuing violation by a common carrier, up to a statutory maximum of $1,500,000 for a single act or failure to act.39 In determining the appropriate forfeiture amount, we consider the factors enumerated in Section 503(b)(2)(E) of the Act, including “the nature, circumstances, extent, and gravity of the violation and, 33 See Pro Forma Transfer of Control Notification, supra note 16; International Sec. 214 Pro Forma Transfer Grant Public Notice, 27 FCC Rcd at 2001; see also 47 C.F.R. § 63.24(d) (defining pro forma assignments and transfers of control as transactions that “do not result in a change in the actual controlling party. . . .”).
35 47 U.S.C. § 214; 47 C.F.R. §§ 63.03, 63.04, 63.18, 63.24; see also supra paragraph 2.
36 See supra paragraph 7.
38 47 U.S.C. § 503(b)(1)(B).
39 47 U.S.C. § 503(b)(2)(B); see also 47 C.F.R. § 1.80(b)(2). The Commission has amended Section 1.80(b)(2) of the Rules three times to increase the maximum forfeiture amounts, in accordance with the inflation adjustment requirements contained in the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. § 2461 note, as amended by the Debt Collection Improvement Act of 1996, 31 U.S.C. § 3701 note. The most recent inflation adjustment took effect September 2, 2008 and applies to violations that occur after that date. See Amendment of Section 1.80(b) of the Commission’s Rules, Adjustment of Forfeiture Maxima to Reflect Inflation, Order, 23 FCC Rcd 9845 (2008) (adjusting the maximum statutory amounts for common carriers from $130,000/$1,325,000 to $150,000/$1,500,000).
with respect to the violator, the degree of culpability, any history of prior offenses, ability to pay, and such other matters as justice may require,” as well as our forfeiture guidelines.40
Section 1.80 of the Rules establishes a base forfeiture amount of $1,000 for an “unauthorized pro forma transfer of control.”41 We find that StanaCard apparently engaged in one unauthorized pro forma international Section 214 transfer of control. Accordingly, we find that StanaCard is apparently liable for a forfeiture of one thousand dollars ($1,000) for its willful or repeated failure to timely notify the Commission of one pro forma international Section 214 transfers of control. 14.
Section 1.80 of the Rules establishes a base forfeiture amount of $8,000 for an “unauthorized substantial transfer of control.”42 The Commission has applied that same forfeiture amount to substantial transfers of international Section 214 authority.43 StanaCard engaged in two unauthorized substantial transfers of control. These two unauthorized Section 214 transactions persisted for more than six months before StanaCard filed corrective STA requests, which were granted.44 Taking the duration of these delays into account and applying the factors set forth in Section 503(b)(2)(E) of the Act as well as Commission precedent,45 we find that the appropriate forfeiture amount for the two unauthorized substantial transfers of control is twenty thousand dollars ($20,000).
In light of the seriousness, duration, and scope of the apparent violations, we propose forfeitures totaling twenty-one thousand dollars ($21,000) against StanaCard, consisting of one thousand dollars ($1,000) for failure to timely notify the Commission of one pro forma transfer of control of international Section 214 authority and twenty thousand dollars ($20,000) for two unauthorized substantial transfers of control of domestic and international Section 214 authority. V. ORDERING CLAUSES
ACCORDINGLY, IT IS ORDERED that, pursuant to Section 503(b) of the Act,46 and Section 1.80 of the Rules,47 StanaCard, LLC is hereby NOTIFIED OF ITS APPARENT LIABILITY FOR A FORFEITURE in the amount of twenty-one thousand dollars ($21,000) for willfully or repeatedly violating Section 214(a) of the Communications Act of 1934, as amended, 47 U.S.C. § 214(a), and Sections 63.03, 63.04, 63.18, and 63.24 of the Rules, 47 C.F.R. §§ 63.03, 63.04, 63.18, and 63.24.
40 See 47 U.S.C. § 503(b)(2)(E); see also 47 C.F.R. § 1.80(b)(6), Note to paragraph (b)(6): Guidelines for Assessing Forfeitures.
41 See 47 C.F.R. § 1.80(b)(6), Note to paragraph (b)(6).
43 See Kajeet Inc. and Kajeet/Airlink, LLC, Notice of Apparent Liability for Forfeiture and Order, 26 FCC Rcd 16684, 16697, para. 29 (2011) (Kajeet NAL).
44 See supra paragraph 7.
45 See 47 U.S.C. § 503(b)(2)(E); Kajeet NAL, 26 FCC Rcd at 16697, para. 29 (upwardly adjusting the $8,000 base forfeiture to $16,000 in response to a two-year delay in seeking Commission approval of a substantial unauthorized assignment of international Section 214 authority).
46 47 U.S.C. § 503(b).
47 47 C.F.R. § 1.80.
IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the Rules, within thirty (30) calendar days of the release date of this Notice of Apparent Liability for Forfeiture, StanaCardSHALL PAY the full amount of the proposed forfeitures or SHALL FILE a written statement seeking reduction or cancellation of the proposed forfeitures.
Payment of the forfeiture must be made by check or similar instrument, wire transfer, or credit card, and must include the NAL/Account number and FRN referenced above. StanaCard shall also send electronic notification within forty-eight (48) hours of the date said payment is made to Terry.Cavanaugh@fcc.gov [4], Pamela.Kane@fcc.gov [5], William.Kehoe@fcc.gov [6], and Robert.Krinsky@fcc.gov [7]. Regardless of the form of payment, a completed FCC Form 159 (Remittance Advice) must be submitted.48 When completing the FCC Form 159, enter the Account Number in block number 23A (call sign/other ID) and enter the letters “FORF” in block number 24A (payment type code). Below are additional instructions regarding the form of payment:
Any request for full payment under an installment plan should be sent to: Chief Financial Officer – Financial Operations, Federal Communications Commission, 445 12th Street, SW, Room 1-A625, Washington, DC 20554.49 Questions regarding payment procedures should be addressed to the Financial Operations Group Help Desk by phone, 1-877-480-3201, or by e-mail, ARINQUIRIES@fcc.gov [8].
The written statement seeking reduction or cancellation of the proposed forfeitures, if any, must include a detailed factual statement supported by appropriate documentation and affidavits pursuant to Sections 1.80(f)(3) and 1.16 of the Rules.50 The written statement must be mailed to Theresa Z. Cavanaugh, Chief, Investigations and Hearings Division, Enforcement Bureau, Federal Communications Commission, 445 12th Street, SW, Room 4-C330, Washington, DC 20554 and must include the NAL/Account number referenced above. The written statement shall also be e-mailed to Theresa Z. Cavanaugh at Terry.Cavanaugh@fcc.gov [4] and to Robert B. Krinsky at Robert.Krinsky@fcc.gov [7].
48 An FCC Form 159 and detailed instructions for completing the form may be obtained at http://www.fcc.gov/Forms/Form159/159.pdf [9].
49 See 47 C.F.R. § 1.1914.
50 See 47 C.F.R. §§ 1.80(f)(3), 1.16.
IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability for Forfeiture shall be sent by first class mail and certified mail, return receipt requested, to: Manlio Carrelli, Chief Executive Officer, StanaCard, LLC, 424 West 33rd Street, Suite 410, New York, NY 10001; Michael Choupak, StanaCard, LLC, 424 West 33rd Street, Suite 410, New York, NY 10001; Anastasia Koroleva, StanaCard, LLC, 424 West 33rd Street, Suite 410, New York, NY 10001; and David E. Bronston, Esq., Phillips Lytle LLP, 437 Madison Avenue, 34th Floor, New York, NY 10022-7021.
Theresa Z. CavanaughChief, Investigations and Hearings DivisionEnforcement Bureau
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