Howe Electric Inc. pleaded guilty in a federal court for its role in two separate conspiracies to rig bids to two Fresno-area schools by obtaining agreements from potential competitors not to compete against Howe Electric in return for Howe Electric’s agreement to use those competitors as subcontractors on the projects, according to the Department of Justice. Both conspiracies began in the late 1990s and lasted until at least summer 2001, according to the department.

Howe Electric will pay a total of $300,000 in criminal fines and $3 million in restitution and civil settlement. The plea agreement, fines and restitution are subject to court approval.

E-Rate, a program authorized by Congress in the Telecommunications Act of 1996, provides funding to economically disadvantaged school districts and libraries to connect to and utilize the Internet. Under the E-Rate program, schools can receive money for cabling, Internet backbone equipment (such as servers, PBXs and switches) and monthly Internet and telephone connectivity service.

Former education consultant played a role

During the conspiracies, Howe Electric entered into agreements with former education consultant Judy N. Green in which Howe Electric was awarded contracts for the E-Rate projects at the West Fresno Elementary School District and the W.E.B. DuBois Charter School in exchange for awarding subcontracts to other vendors, according to the Department of Justice.

The vendors had the capability to bid against Howe Electric on the projects but had agreed with Green not to compete in exchange for the award of the subcontracts, according to the department.

In both conspiracies, Green arranged for the schools’ projects to be awarded to Howe Electric, which then used the vendors as subcontractors. After completion of the projects, Howe Electric requested and received reimbursement from the E-Rate program for the work that it and the subcontractor vendors performed at the schools.

Green was convicted and sentenced to serve seven and a half years in prison for her role in the E-Rate conspiracies.

As a result of an investigation by the Justice Department’s Antitrust Division into fraud and anticompetitive conduct in the E-Rate program, seven companies and 16 individuals have pleaded guilty, have been convicted and found guilty or have entered civil settlements, resulting in more than $40 million in criminal fines, civil settlements and restitution as well as jail sentences totaling nearly 29 years, according to the Justice Department.

Trials are pending in three additional E-Rate cases, and one individual remains an international fugitive, according to the department.