Money manager Mario Gabelli must pay $130 million to resolve civi...
Money manager Mario Gabelli must pay $130 million to resolve civil fraud charges involving FCC spectrum auctions, the Manhattan U.S. Attorney’s office said Thurs. A Justice Dept. complaint named Gabelli and 38 others as parties to an alleged scheme…
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to misuse the FCC designated-entity (DE) process in auctions 1995-2000. Gabelli set up bogus companies to bid as DEs in auctions limited to small businesses, or to qualify for bidding credits and favorable financing in others, DoJ said. The companies “existed only on paper solely to certify that they met the FCC’s eligibility rules,” DoJ said. A company Gabelli owns has applied to bid in the Aug. AWS auction, outraging FCC Comr. Adelstein. DoJ charged that none of those Gabelli set up as small businesses “possessed any relevant telecommunications experience or knowledge,” nor did they control their companies. Those were controlled by Gabelli, who later transferred some licenses to 3rd parties at substantial profit, the complaint said. The govt. charged Gabelli and his affiliates with violating the False Claims Act, saying they unjustly enriched themselves by submitting false certifications of eligibility to the FCC. Lawyer R.C. Taylor filed the original suit under the False Claims Act’s whistleblower provisions, entitling him to $32.2 million of the recovery. FCC Chmn. Martin said Thurs. the FCC probably is powerless to bar investor Mario Gabelli from participating in future spectrum auctions. “I think that the settlement itself encompasses the actions the government will take against him,” Martin said after the agency’s agenda meeting. “I think the government committed in the settlement that they wouldn’t take any other action.”