Tech firm owner pleads guilty to E-Rate conspiracy

The former owner of an Illinois innovation firm has pleaded guilty to providing bribes and kickbacks to school districts on the other hand for networking contracts that were part of a U.S. government program designed to bring Internet services to schools and libraries in poor areas.

Tyrone Pipkin, a former co-owner of Global Networking Technologies in Illinois, pleaded guilty Monday in U.S. District Court for the Eastern District of Louisiana to participating in a conspiracy to defraud the U.S. Federal Communication Commission's E-Rate program, the U.S. Department of Justice said.

Pipkin, acting on behalf of his own company and Computer Training Associates, told schools that if they chose one of the two companies for E-Rate contracts, their matching fees required by the FCC would be waived, according to court documents. Pipkin and a co-owner at Global Networking Technologies as well offered bribes to school officials and employees if they circumvented the required competitive bidding process required in the E-Rate program in favor of one of the two companies, the court documents said.

Pipkin and the co-owner at Global Networking Technologies received E-Rate payments of near $2.6 million between January 2003 and September 2005, court documents said.

The E-Rate program

The E-Rate program was created by the U.S. Congress in the Telecommunications Act of 1996. Depending on the financial needs of the applicant schools and libraries, the program pays 20 percent to 90 percent of the cost for Internet access and telecommunications services, as so then as internal computer and communications networks.

Grant Gross covers innovation and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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