NEC America agreed to pay a $20.6 million criminal fine, civil se...

NEC America agreed to pay a $20.6 million criminal fine, civil settlement and restitution, after the Justice Dept. (DoJ) charged the company with defrauding the E-rate program. The DoJ said NEC allocated contracts and rigged bids for E- rate projects at 5 separate school districts in Mich., Wis., Ark, and S.C. NEC was also charged with wire fraud for inflating bids and submitting false documents to the E-rate program and San Francisco school district. The DoJ said NEC filed the fraudulent documents in an effort to hide the fact that it planned on installing ineligible items. DoJ said NEC agreed to donate “free” items that it planned to bill the E- rate program and submitted false and fraudulent documents to defeat inquiry into the legitimacy of the funding request. The plea agreement calls for a $4.7 million criminal fine for bid rigging and wire fraud. “This conduct deprived the E- rate program of fair and competitive prices, caused the program to pay for unnecessary and ineligible items, and as a result, prevented the funding of projects at other needy schools,” said DoJ antitrust chief Hewitt Pate. The House Commerce Committee is investigating the E-rate program for fraud. Also, the Atlanta Journal-Constitution reported that $20 million in E-rate funds for the Atlanta school district has been frozen while the Universal Service Administrative Co., which distributes E-rate funds, investigates mishandling of that district’s funds.