NEC sub defrauds US gov

'fesses up and pays fine

By Lucy Sherriff • Get more from this author

Posted in Data Networking, 28th May 2004 12:38 GMT

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NEC Business Network Solutions, a subsidiary of NEC Corp, has pleaded guilty to charges of defrauding the US government, and will pay a $20.6m fine to settle the case.

The company was charged with collusion and wire fraud, according to Reuters, and admits to rigging bids and allocating contracts for projects in the privately funded E-Rate program.

By way of explanation, NEC's lawyer said: "We've made mistakes." He added that the company had done everything it could to ensure that the same problems could not happen again.

San Francisco US attorney Kevin Ryan takes a tougher stance: "This criminal attempt to steal funds from the program comes at the expense of children across the country and is totally unacceptable."

E-Rate is a $2.25bn funding programme that provides qualifying schools with funding for net access infrastructure and services. As part of its plea, NEC must continue to "help police with their enquiries" into the E-Rate program.

E-Rate has been under investigation by Congress for waste and abuse for some time. In January this year Investigators found that SBC Communications had left $5m of E-Rate-funded telecoms equipment, intended for schools, to gather dust in a Chicago warehouse. ®