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A former owner of an Illinois-based technology company has pleaded guilty to participating in a conspiracy to defraud the federal E-Rate program, the Justice Department announced this week.
Tyrone Pipkin, a former co-owner of Global Networking Technologies Inc. pleaded guilty earlier this week to conspiring to defraud the E-Rate program. Court document say Pipkin participated in the conspiracy to provide bribes and kickbacks to school officials and employees responsible for the procurement of Internet access services at certain schools in Arkansas, Illinois and Louisiana. In return, those individuals ceded control of the E-Rate competitive bidding process to Pipkin and his co-conspirator, ultimately allowing them to ensure E-Rate contracts at these schools were awarded to their companies.
The E-Rate program was created by Congress in the Telecommunications Act of 1996, and provides subsidies to economically disadvantaged schools and libraries. Depending on the financial needs of the applicant schools, the program pays 20 to 90 percent of the cost for Internet access and telecommunications services, as well as internal computer and communications networks.
Charged with conspiracy, Pipkin could face a maximum penalty of five years in prison and a $250,000 fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either amount is greater than the statutory maximum fine.
