A former assistant superintendent at a Michigan school has been arrested, along with his wife, on charges of fraud involving US$7.3 million obtained from a US government program intended to help schools and libraries connect to the Internet, the US Department of Justice (DOJ) said Wednesday.
A federal grand jury in Detroit on Tuesday indicted Douglas A. Benit and Mary Ann Elam Benit on fraud-related charges for allegedly using his position at Ecorse Public Schools to steer contracts from the U.S. E-Rate program to a company under his control. The contracts were awarded to Coral Technology under inflated bids, the DOJ said.
The indictment charges both the Benits and Coral with one count of conspiring to commit federal program fraud and mail and wire fraud between March 1998 and October 2003, as well as one count of mail fraud in relation to a Coral application for an E-Rate funded project in the Ecorse schools.
Douglas Benit is also charged with two counts of federal program fraud relating to school purchases of vocational labs and payments required under the federal E-Rate program, the DOJ said. He is also charged with one count of mail fraud in relation to a September to November 2005 scheme to defraud a mortgage and a lending company while obtaining a US$893,750 mortgage.
Douglas Benit and Coral are charged with two counts of wire fraud in relation to wire transmissions made in 2001 and 2002 in connection to the E-Rate fraud, the DOJ said. Benit and his wife are charged with bank fraud in a December 2002 to April 2003 scheme to defraud a Minnesota bank, the DOJ said.
The indictment charges both Benits, Coral and another company under their control, School Management Services, with conspiring to launder the fraudulently obtained money from August 1999 to October 2003. The indictment alleges that one purpose of the money laundering conspiracy was to purchase and make improvements to Douglas Benit's residence in Superior Township, Michigan.
Including Wednesday's announcement, 13 people and 12 companies have been charged as part of the DOJ's ongoing antitrust investigation into fraud and anticompetitive conduct in the E-Rate program. Six companies and three individuals have either pleaded guilty or have entered into civil settlements. So far, the defendants have agreed to pay criminal fines and restitution totaling more than US$40 million, and two people have each been sentenced to serve six years in prison.