Antitrust & Crime
Macworld has an interesting article about the antitrust investigation into E-Rate fraud in South Carolina. E-Rate is a government program intended to bring the Internet to schools and libraries in poor areas. According to the article,
11 people and 10 companies have been charged as part of the DOJ Antitrust Division’s ongoing investigation into fraud and anticompetitive conduct in the E-Rate program, DOJ said. Six companies and three people have either pleaded guilty, agreed to plead guilty or have entered civil settlements. The defendants have agreed to pay criminal fines and restitution totaling more than $40 million.
Most recently, “A former South Carolina school official [Ayrer] has been indicted on mail and wire fraud charges.”
Between April 1999 and February 2003, Ayer used her position as the school district’s technology director to award technology contracts to her company, Go Between Communications, according to the indictment. Ayer is charged with submitting fraudulent applications for E-Rate funding of more than US$3.5 million without a competitive bidding process. Ayer fraudulently obtained $468,496 in E-Rate payments, the indictment said. … The mail fraud charges against Ayer carry a maximum penalty per count of five years in jail for violations committed before July 30, 2002, or 20 years in jail for violations committed after that date. She also faces a fine of $250,000 plus restitution on each mail fraud charge. The wire fraud charges carry a maximum penalty per count of 20 years in jail, plus a $250,000 fine.
A chilling reminder that in rare cases an antitrust investigation can result in a criminal indictment against an individual. [Ms. Ayer has only been indicted and has not been found guilty of any crime.]
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