WASHINGTON, Feb. 9 LAWFUEL – US Legal News — A federal jury in
McAllen, Texas, convicted the former president and owner of ATE Tel
Solutions Inc., which does business as ATE Telecom Solutions Inc. (ATE
Tel), on seven of nine counts of wire fraud in a scheme to defraud the
federal E-Rate program, the Department of Justice announced today. Rafael
G. Adame was convicted of submitting fraudulent applications for payment on behalf of ATE Tel to the Federal Communications Commission’s (FCC)
Universal Service Administrative Company (USAC). The indictment against
Adame was returned on Dec. 6, 2006.
Adame was convicted of submitting fraudulent invoices for payment to
the Schools and Libraries Division of USAC from December 2001 to May 2003.
As a result of the scheme to defraud the E-Rate program, Adame fraudulently obtained $106,514 in payments from USAC.
“Committing fraud upon the E-Rate program harms underprivileged school districts,” said Thomas O. Barnett, assistant attorney general in charge of the department’s Antitrust Division. “The Antitrust Division will continue to vigorously pursue those who cheat the competitive process and steal money from this federal program.”
The E-Rate program subsidizes the provision of Internet access and
telecommunications services, as well as internal computer and
communications networks, to economically disadvantaged schools and
libraries. The program was created by Congress in the Telecommunications
Act of 1996 and is administered by USAC, a non-profit corporation, under
the auspices of the FCC.
Adame owned and operated ATE Tel, a vendor that provided
computer-related goods and services through the E-Rate program to various
school districts, including Weslaco Independent School District in South
Texas. Adame devised a scheme to defraud the E-Rate program through
illegitimate invoices, which were transmitted via wire communications to
USAC. On these invoices Adame entered fabricated data, such as false
customer bill dates and false amounts for reimbursement. USAC then relied
on this illegitimate information to transmit wire transfers for the
indicated amount into ATE Tel’s bank account. By making false
representations on invoices filed with USAC, Adame received payments in
excess of what was authorized and for work that was not actually performed.
The wire fraud conviction under 18 U.S.C. § 1343 carries a maximum
penalty per count of 20 years in jail, and a $250,000 fine. Adame has not
yet been sentenced.
Today’s conviction resulted from an ongoing national investigation of
fraud in the E-Rate program. The trial and prosecution of this case was
conducted by the Antitrust Division’s Dallas Field Office and the Federal
Communications Commission’s Office of Inspector General.
The Antitrust Division’s ongoing investigation into fraud and anti-
competitive conduct in the E-Rate program has yielded charges being filed
against 14 individuals and 12 companies. Six companies and four individuals have either been found guilty at trial, pleaded guilty, agreed to plead guilty, or have entered civil settlements. The defendants have collectively agreed to pay criminal fines and restitution totaling more than $40
million. Two of the individuals have each been sentenced to serve six years in prison.
Anyone with information concerning fraud or anticompetitive conduct in the E-Rate program should contact the Dallas Field Office of the Antitrust Division at +1-214-661-8600.
SOURCE U.S. Department of Justice