RealTime IT News

School Official Hit With E-Rate Fraud Charge

A former South Carolina school technology director is facing charges she committed mail and wire fraud in a scheme to defraud the federal E-rate program that helps schools and libraries connect to the Internet.

According to a 12-count indictment returned by a Columbia, S.C., federal grand jury, Cynthia K. Ayer used her position as the technology director of the school district to award $3.5 million of E-rate contracts to her company, Go Between Communications, without competitive bidding.

As result of her scheme to defraud the program, the Department of Justice (DoJ) claims Ayer fraudulently obtained $468,496 in E-rate payments.

If convicted, Ayer faces a maximum penalty per count of five years in jail for violations committed before July 30, 2002, or 20 years of prison time for violations after that date. In addition she faces maximum fine of $250,000 and forfeiture of any property derived from the proceeds of the offense.

"Committing fraud upon the E-Rate program harms already underprivileged school districts," Thomas O. Barnett, assistant attorney general in charge of the DoJ's Antitrust Division, said in a statement. "The Antitrust Division will continue to vigorously pursue those who cheat the competitive process and take advantage of this federal program."

The indictment resulted from an ongoing federal investigation of fraud and anticompetitive conduct in the E-Rate program. Including Ayer, 11 individuals and 10 companies have been charged as part of the DoJ's ongoing investigation.

Six companies and three individuals 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. Two of the individuals have each been sentenced to serve six years in prison.