WASHINGTON – Computer Assets Inc. and its principals, Abraham Salazar and Damon Salazar, have agreed to pay $350,000 over three years and surrender up to $35 million in pending E-Rate applications to settle allegations that the company violated the False Claims Act in connection with the Federal Communications Commission’s E-Rate program, the Justice Department and the U.S. Attorney’s Office for the District of New Mexico announced today.
The E-Rate program, which Congress created in the Telecommunications Act of 1996, provides funding for needy schools and libraries to connect to and utilize the Internet. Under the program, which is supported by fees collected from telephone users, schools apply for funds to pay for hardware and monthly connectivity service fees.
The United States contended that the Española, N.M.-based company violated the E-Rate program’s requirements by engaging in non-competitive bidding practices for E-Rate contracts with the Kayenta Unified School District in Kayenta, Ariz. Additionally, the United States alleged that Computer Assets billed for installing excess and unnecessary networking cable, and in some instances billed twice for the same work.
These allegations arose from a False Claims Act lawsuit filed in New Mexico federal court by John Lyons, a former Computer Assets employee. The False Claims Act allows private individuals to bring civil actions for fraud on behalf of the United States and to share in the proceeds of any recovery. Mr. Lyons’ share in the settlement will amount to $77,000.
"The E-Rate program provides critical support for Internet access to the most under-served schools in the nation," said Tony West, Assistant Attorney General for the Department of Justice’s Civil Division. "Working with our partners at the FCC’s 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 by those seeking to defraud the public."
The Justice Department’s Civil Division, with assistance from the FCC’s Office of the Inspector General, handled the investigation and settlement of this matter. The case is entitled United States ex rel. John Lyons v. Computer Assets, Inc. et al., Case No.: 05-540 RB/WPL.