Former Sales Rep Convicted for E-Rate Fraud

By
Grant Gross
September 18, 2007, 12:25 PM ET
2 min read

— -- A California woman who had positions with two tech vendors has been convicted on 22 counts related to fraud, collusion and conspiracy in connection with E-Rate projects at schools in seven states.

Judy Green, of Temecula, California, was convicted late Friday by a jury in U.S. District Court for the Northern District of California in San Francisco, according to court documents. She will be sentenced in January.

The E-Rate program helps schools and libraries in poor areas buy equipment to connect to the Internet. In recent years, the U.S. Department of Justice has brought several cases against telecom and tech vendors involved in the program, and critics have said the E-Rate program is rife with fraud and abuse.

Green was a former sales representative with Video Network Communications Inc. (VNCI) of Portsmouth, New Hampshire, and co-owner of ADJ Consultants Inc. Green and those two companies were among six people and six companies indicted by the DOJ in April 2005 for schemes to defraud the E-Rate program.

The DOJ accused the defendants of charging ineligible equipment and services to the E-Rate program and filing false reports with the program during projects in Arkansas, California, Michigan, New York, Pennsylvania, South Carolina and Wisconsin.

Also charged with Green were:

-- Howe Electric Inc. of Fresno, California;

-- Sema4 Inc. of San Juan Capistrano, California;

-- Digital Connect Communications of San Juan Capistrano, California;

-- Expedition Networks, Ltd. of North Hills, California;

-- Allan Green of Temecula, California, Judy Green's husband and co-owner of ADJ;

-- George Marchelos of Saratoga, California, a former sales representative for VNCI;

-- Steven Newton of San Juan Capistrano, California, a former vice president at Premio Computer Inc.;

-- Earl Nelson of Sonora, California, a former branch manager for Inter-Tel Technologies Inc.;

-- William Holman of Dallas, former vice president of sales for NEC-Business Network Solutions Inc.

Expedition Networks has plead guilty and fined US$5 million. Allan Green, Marchelos, Newton, Nelson, and Holman have pleaded guilty and are awaiting sentencing. Charges against Howe Electric Inc. are pending.

VNCI, Sema4, Digital Connect, and ADJ Communications are defunct; charges against them have been dropped.