Computer Assets Inc. and the company’s principals, Abraham and Damon Salazar, have settled a False Claims Act lawsuit by agreeing to pay a sizable sum and to forfeit pending E-rate applications worth a lot more.  The U.S. Justice Department had charged that the firm violated the False Claims Act by making false claims to the Federal Communications Commission’s E-Rate program. 

Congress created the E-rate program as part of the Telecommunications Act of 1996.  The E-Rate program provides some of the nation’s most under-served schools with the support necessary for Internet use.  Under the program, schools and libraries in poverty-ridden neighborhoods apply for funding to pay for computer hardware and monthly Internet connectivity service fees.  The government alleged that Computer Assets, based in Espanola, New Mexico, participated in non-competitive bidding practices in the process of obtaining E-Rate contracts with the Kayenta Unified School District in Kayenta, Arizona.  Further, Computer Assets allegedly billed for installing unnecessary network cable and also double-billed for some of its work. 

The misconduct was first revealed in a whistleblower lawsuit filed in federal court in New Mexico by John Lyons, a former employee of Computer Assets.  The False Claims Act permits a private individual to file a fraud claim on behalf of the United States government and to receive a portion of any recovery. Under that statute, Mr. Lyons will receive a handsome share of the settlement. 

For the full story, go to Department of Justice’s Press Release.