NEC Business Network Solutions Inc. (BNS)--part of Japanese electronics giant NEC Corp.--has agreed to pay $20.6 million after pleading guilty to defrauding the eRate program, which helps schools and libraries connect to the internet. More than $3 million of that amount will go to San Francisco schools as a result of Superintendent Arlene Ackerman's diligence in reporting the scam, federal officials said.

The settlement isn't the first decision reached against a company for trying to defraud the eRate, but it's by far the largest in terms of a dollar amount--and U.S. Justice Department officials hinted there could...

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