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Former Consultant To The New York City Department Of Education Sentenced In Manhattan Federal Court To 37 Months In Prison For $1.7 Million Fraud Scheme

FOR IMMEDIATE RELEASE
Tuesday, September 18, 2012

Preet Bharara, the United States Attorney for the Southern District of New York, announced that WILLARD LANHAM, a/k/a “Ross Lanham,” a former consultant to the New York City Department of Education (“DOE”), was sentenced today in Manhattan federal court to 37 months in prison for illegally obtaining $1.7 million in DOE funds that were intended to provide Internet access to New York City Public Schools. LANHAM directed the funds to “Lanham Enterprises,” a company he owned and controlled, but performed no work to justify receipt of the funds. He was convicted in March 2012 of one count of theft concerning a program receiving federal funds and three counts of mail fraud after a six-day jury trial. LANHAM was sentenced by United States District Judge George B. Daniels.

Manhattan U.S. Attorney Preet Bharara said: “The Department of Education entrusted Willard Lanham with the vitally important task of helping young students get connected to the Internet – thereby connecting them to the world around them and the infinite resources that can be found online. Instead, Lanham chose to steal precious dollars from DOE to help underwrite his lifestyle, and he will now pay for his crimes.”

According to the Complaint, Information, and the evidence at trial:

From 2002 through October 2008, LANHAM was a consultant to DOE, responsible for managing multiple major initiatives, including Project Connect, a large-scale cabling, integration, and wireless deployment project designed to provide Internet access to all New York City public school classrooms. During his tenure as a consultant to the DOE, LANHAM was involved in all aspects of managing Project Connect and two other DOE initiatives, responsible for providing oversight and supervision of the various contractors and subcontractors engaged on the projects. Between 2002 and 2008, LANHAM was paid an annual salary of approximately $200,000, for a total of approximately $1.4 million in compensation, all of which was billed to, and ultimately paid for by, DOE.

Without authority, LANHAM unlawfully converted an additional $1.7 million in DOE funds that was intended to be used for Project Connect for his own personal use. He accomplished this in two ways. First, LANHAM orchestrated the hiring of outside consultants (the “LANHAM Consultants”), including his own brother, to work for him on a DOE project that he oversaw, and arranged for Lanham Enterprises to pay these consultants directly. LANHAM also billed a Project Connect subcontractor for work performed by the LANHAM Consultants, which was unrelated to the work the subcontractor was performing for DOE. He billed for the work at a much higher rate than what he had actually paid the LANHAM Consultants, and then pocketed the difference.

Second, LANHAM instructed a subcontractor working on DOE projects he managed to pay a LANHAM Consultant, and to bill Lanham Enterprises for approximately the same amount. LANHAM then used his company to charge another subcontractor a greatly inflated amount for the same work and again pocketed the difference. In both of these circumstances, Lanham Enterprises contributed nothing of value to the work that the LANHAM Consultants performed, other than to submit significantly marked-up invoices for the work that was ultimately paid for by DOE.

In addition, LANHAM affirmatively misled DOE along with the contractors and subcontractors he was responsible for overseeing. For example, LANHAM told certain individuals at DOE that DOE was not paying for the LANHAM Consultants, and that they were being paid for by a DOE contractor.

LANHAM used some of the proceeds from the scheme to fund a lavish lifestyle that included purchasing luxury cars, and purchasing and developing significant real estate holdings on Long Island.

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In addition to the prison term, Judge Daniels sentenced LANHAM, 58, of East Northport, New York, to three years of supervised release and ordered him to pay a $100 special assessment fee. Judge Daniels also ordered Lanham to forfeit $1,727,112.00, and to pay $1,727,112.00 in restitution to the DOE.

Mr. Bharara praised the outstanding investigative work of the New York City Department of Investigation and the Special Commissioner of Investigation for the New York City School District.

This case is being handled by the Office's Public Corruption Unit. Assistant United States Attorneys Brian A. Jacobs and Alvin Bragg are in charge of the prosecution.

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