Controversy around the FCC’s Broadband Deployment Advisory Committee (BDAC) continues to swirl as one of the group’s advisers was arrested last week on claims that she lured investors into providing funds for what appears to be a multimillion-dollar investment fraud scheme.
Elizabeth Pierce, the former CEO of Anchorage, Alaska-based submarine fiber cable provider Quintillion, raised over $250 million from two New York-based investment companies using forged contracts with other companies guaranteeing hundreds of millions of dollars in future revenue.
According to findings made by an FBI investigation, Pierce pretended Quintillion had wholesale contracts worth $1 billion.
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“As it turned out, those sales agreements were worthless because the customers had not signed them,” said U.S. attorney Geoffrey Berman said in prepared remarks, according to a WSJ report. “Instead, as alleged, Pierce had forged counter-party signatures on contract after contract. As a result of Pierce’s deception, the investment companies were left with a system that is worth far less than Pierce had led them to believe.”
In August, Pierce resigned from Quintillion. She later stepped down from her role in FCC Chairman Pai’s BDAC program. Pierce had been named president and CEO of Quintillion Networks in December 2013 after having been director of risk management at Alaska Communications
For its part, Quintillion says that it "became aware of the situation" last year and "took swift action and self-reported to the Department of Justice,” adding that it "has been cooperating fully with the authorities during this ongoing investigation."
William Sweeney, FBI assistant director, said in a statement that Pierce’s scheme was revealed by an unnamed customer.
"It’s important for stakeholders to maintain a certain level of awareness into how their investments are being managed,” Sweeney said. “In this case, thanks to a customer who was paying close attention to their invoices and noticed something was up, Pierce’s alleged scheme began to fall apart."
Quintillion was conceptualized with the aim of extending broadband services to residential and business customers in rural Alaska.
In March 2017, Alaska Communications and Quintillion announced plans to extend fiber-based services to rural communities in Northwest Alaska, an area where service options were limited to high-cost microwave and satellite communications from one provider.
To enhance its reach, Alaska Communications and Quintillion purchased a fiber network from ConocoPhillips that they said will enable them to target business service opportunities in the region's growing oil and gas industry as well as Arctic Fibre’s assets.