4 Charged in Internet Service Scam

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

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