Dallas Independent School District Agrees to Settle False Claims Allegations Involving E-Rate Program

WASHINGTON - The Dallas Independent School District (DISD) has agreed to settle claims that the school district violated the False Claims Act in connection with the Federal Communications Commission’s E-Rate program, the Department of Justice and the U.S. Attorney’s Office for the Northern District of Texas announced today. Under the terms of the settlement, the DISD will relinquish more than $150 million in requests for federal funds, and will pay a total of $750,000.

The E-Rate program, created by Congress in the Telecommunications Act of 1996, and overseen by the FCC, provides funding for needy schools and libraries to connect to and use the Internet. Under, the E-Rate program – which is funded by monies collected from telephone users – schools apply for funds to pay for hardware and monthly connectivity service fees.

The United States alleged that the DISD provided false information to the E-Rate program by engaging in non-competitive bidding practices for E-Rate contracts. The United States also contended that school district officials improperly received gratuities from technology vendors, including trips, meals, golfing and the free use of a yacht. The school district’s former chief technology officer, Ruben Bohuchot, was convicted in July 2008 on bribery charges stemming from the receipt of federal funds under the E-Rate program.

"The E-Rate Program provides critical support to the poorest schools in the nation, providing them with Internet access and wiring," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "Working with our partners at the FCC Office of the Inspector General, the Department of Justice is committed to ensuring that this important program, which benefits our neediest children, not be misused."

The resolution announced today resulted from an ongoing federal investigation of fraud and anti-competitive conduct in the E-Rate program in Texas. The investigation is being conducted jointly by the Civil Division, the U.S. Attorney’s Office for the Northern District of Texas and the FCC Office of the Inspector General.