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Evertec to pay $4.8 million in E-Rate fraud

Evertec Inc., formerly known as GM Group, has agreed to pay $4.8 million to settle allegations that it defrauded the government E-Rate program. The government alleges that the company violated the False Claims Act by submitting claims for goods and services that were ineligible for E-Rate funding. The federal program provides funding to schools and libraries to connect to and use the Internet.

The U.S. Attorney’s Office for the Northern District of California brought the suit. Other companies that have settled E-Rate fraud allegations include Inter-Tel Tecnologies, which paid $8.7 million in civil and criminal penalties, and NEC Business Network Solutions, which paid $20.6 million.

The October 13, 2005 press release from the U.S. Attorney’s Office can be found at their website.

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