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Verdicts & Settlements

Concept Schools Settles False Claims Act Civil Suit for $4.5M

— November 17, 2020

Concept Schools settles allegations of engaging in non-competitive bidding practices.

The Department of Justice (DOJ) has announced Concept Schools, a charter school managing company in Des Plaines, Illinois, has agreed to pay a $4.5 million civil settlement resolving allegations that it violated the False Claims Act by engaging in non-competitive bidding practices in connection with the Federal Communications Commission’s (FCC) E-Rate Program.  The program was created by Congress in the Telecommunications Act of 1996 and subsidizes schools to make internet access and internal networking more affordable.

United States prosecutors claimed Concept Schools fixed the bidding for E-Rate contracts between 2009 and 2012 in favor of chosen technology vendors “so that its network of charter schools located in several states, including Illinois, Ohio, and Indiana, selected the chosen vendors without a meaningful, fair and open bidding process,” according to the DOJ’s release.  Concept Schools’ chosen vendors were also found to have provided equipment at higher prices than those approved by the FCC for similar equipment.  Furthermore, Concept Schools “failed to maintain sufficient control over equipment reimbursed by the FCC, some of which was discovered missing,” according prosecutors.

Concept Schools Settles False Claims Act Civil Suit for $4.5M
Photo by Annie Spratt on Unsplash

Under the government’s program, schools and libraries that are found to be eligible to participate “may receive discounts on telecommunications, telecommunications services, and Internet access, as well as internal connections, managed internal broadband services and basic maintenance of internal connections,” the FCC explains on its website. “Discounts range from 20 to 90 percent and are based on the poverty level of the schools.  Rural schools and libraries may also receive a higher discount.  Recipients must pay some portion of the service costs.”

The federal legislation lists seven different types of conduct that would constitute violations of the act.  According to the Department of Justice, “After listing the seven types of conduct that result in FCA liability, the statute provides that one who is liable must pay a civil penalty of between $5,000 and $10,000 for each false claim (those amounts are adjusted from time to time; the current amounts are $5,500 to $11,000) and treble the amount of the government’s damages. Where a person who has violated the FCA reports the violation to the government under certain conditions, the FCA provides that the person shall be liable for not less than double damages.”

“Today’s settlement demonstrates our continuing vigilance to ensure that those doing business with the government do not engage in anticompetitive conduct,” said Acting Assistant Attorney General Jeffrey Bossert Clark for the Department of Justice’s Civil Division.  “Government contractors and schools that seek to profit at the expense of taxpayers will face serious consequences.”

“E-Rate contractors and schools receiving E-Rate funds must understand and know that actions that undermine the contracting process, such as conspiring to rig competitive bidding, will not be tolerated and will be investigated aggressively,” said David L. Hunt, Inspector General of the FCC.

Concept Schools has also agreed to enter into a corporate compliance plan with the FCC and its participation in the program will be monitored by the agency moving forward.


The False Claims Act: A Primer

E-Rate: Universal Service Program for Schools and Libraries

llinois-Based Charter School Management Company To Pay $4.5 Million To Settle Claims Relating To E-Rate Contracts

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