Advertisement (Why?)
The owner of an Internet service company and three employees were charged yesterday with conspiring to steal millions of dollars from a federal program that provides Web access to disadvantaged schools.
John Angelides, 65, of Staten Island, owner of Connect 2 Internet Networks Inc. and three employees were named in a criminal complaint with conspiracy, lying on federal program claims and obstruction of justice stemming from the scheme, which prosecutors charge operated between the fall of 1999 until October.
According to prosecutors in the office of Manhattan U.S. Attorney James Comey, the defendants took advantage of the Federal Communications Commission's "E-Rate Program," which helps qualified schools purchase equipment and Internet service for their students.
The government pays up to 90 percent of the cost of technology upgrades but requires that the schools pay at least 10 percent to prevent government waste.
However, in the complaint, prosecutors charge that Angelides and his employees promised five schools that if they agreed to hire Connect 2 as a service provider the schools could receive the services for free.
News source: Newsday - 4 Charged in Internet Service Scam
John Angelides, 65, of Staten Island, owner of Connect 2 Internet Networks Inc. and three employees were named in a criminal complaint with conspiracy, lying on federal program claims and obstruction of justice stemming from the scheme, which prosecutors charge operated between the fall of 1999 until October.
According to prosecutors in the office of Manhattan U.S. Attorney James Comey, the defendants took advantage of the Federal Communications Commission's "E-Rate Program," which helps qualified schools purchase equipment and Internet service for their students.
The government pays up to 90 percent of the cost of technology upgrades but requires that the schools pay at least 10 percent to prevent government waste.
However, in the complaint, prosecutors charge that Angelides and his employees promised five schools that if they agreed to hire Connect 2 as a service provider the schools could receive the services for free.
News source: Newsday - 4 Charged in Internet Service Scam
The defendants asked the schools to write them phony checks to make it appear as if they were paying their share, thus selling a limitless amount of E-Rate services paid for entirely with federal funds, the complaint charges.
In one example, the defendants Gary Blum, 60, of Whitestone and Oscar Alvarez, 50, of Staten Island, allegedly promised administrators at the Islamic Elementary School in Queens thousands of dollars in Internet services for free.
The school received E-Rate funding for more than $645,000 in computer services installed by Connect 2 but did not pay their share, prosecutors charge.
According to video and audiotaped conversations secretly recorded in October, Angelides advised administrators at the Islamic school to submit phony checks and said the school should "use 9/11 as a wedge" and tell the FCC that they lacked funds because of the terrorist attacks.
It is unclear if the schools realized they were committing wrongdoing or if they would be charged criminally, said a law enforcement source, who added that the investigation is continuing.
Angelides, Blum and another employee, John Dotson, 54, of the Bronx, were arraigned yesterday afternoon before U.S. Magistrate Kevin Nathaniel Fox and were released on personal recognizance bonds.
If convicted, Angelides faces up to 60 years in prison and a fine of at least $2 million. Blum faces up to 20 years in prison and a $1 million fine while Dotson faces up to 15 years in prison and a $750,000 fine. Alvarez, who faces up to 30 years in prison and a $1.5 million fine, was slated to surrender to authorities last night.
Commenting has either been disabled on this article or you are not logged in. Click here to login or register, its free!
Note: Anonymous commenting is disabled in order to keep the quality of responses to a high standard.