Two north Chicago businesses plan to plead guilty to mail fraud for allegedly using the Twin Buttes School District to bilk the government out of more than $100,000 through a federal program that provides funding to schools and libraries for technology and communications equipment.

Global Networking Technology Inc., and Computer Training and Associates were indicted last October for mail fraud and conspiracy to commit mail fraud. Also indicted were the owners of the businesses, Tyrone Pipkin and Gloria Harper. Global Networking Technology Inc. was a business owned by Pipkin and in which Harper was a part owner. Computer Training and Associates is a business owned by Harper.

They were accused of getting the Twin Buttes School District, which is on the Fort Berthold Indian Reservation in northern Dunn County, to enter into a contract that would allow the companies to provide services to the school through the federal E-Rate Program.

Under a plea agreement filed in U.S. District Court in June, the businesses will plead guilty to mail fraud on Sept. 8, and all charges against Pipkin and Harper will be dismissed.

Through the agreement, prosecutors and the defendants plan to jointly recommend the businesses pay $241,000 in restitution to the government. Also, neither the businesses nor Pipkin or Harper can demand further payment for unpaid bills related to the scheme.

Though the charges against them will be dismissed, Pipkin and Harper also will face consequences for the allegations, according to the plea agreement. Neither will be allowed to participate in anything related to the E-Rate program for three years. Their names will be listed on government Web sites listing people who cannot participate in the program. After the three years are up, they must provide written notice if they plan to participate in the program.

Other government agencies also may choose to exclude them from contracting with them for services, according to the plea agreement.

"That may very well be the case," Assistant U.S. Attorney Dave Peterson said.

The E-Rate Program is a government program that provides funding to schools and libraries for technology and communications equipment. One of the program's objectives is to encourage economically disadvantaged schools to install and upgrade their Internet and communications infrastructure.

Twin Buttes School District, because of its financial standing, is qualified to get 90 percent funding for services while providing 10 percent of the cost. An indictment alleges that Pipkin and Harper found out about the 90 percent funding for Twin Buttes School District and peddled their services to the school and completed all necessary forms.

The proper procedure for the program is for schools to apply to the program, post their requests for goods and services on a government Web site and receive bids from companies. Federal Communications Commission rules prohibit a business that will enter a bid from completing the form on behalf of a school.

Investigators learned of the alleged misuse of the E-Rate Program through an investigation into embezzlement by school officials and school board members from Twin Buttes Elementary School.

Peterson said it is not uncommon for corporations to plead guilty in exchange for dismissed charges for individuals. He said it depends on the elements of proof. Also, the past scandal at Twin Buttes is part of the reason the charges against Pipkin and Harper will be dismissed, he said. Some of the potential witnesses would have "credibility issues."

The defendants will not get off completely, he said.

"They are paying back a considerable amount of money," Peterson said.

Bill Michael, Harper's attorney from Minneapolis, said the case is being resolved in a "fair and equitable fashion" for the government, Harper, and Twin Buttes.

"At this point, we're glad this matter is being resolved,"he said.

Pipkin's attorney, Christopher Zaetta of Washington, D.C., did not return two messages seeking comment about the case.

Though the case is scheduled to wrap up soon in North Dakota, the repercussions of it are being felt all the way to North Chicago. Harper is a school board member for the North Chicago Community Unit Schools, and Pipkin has served as the district's director of technology. Charles Shipley, another school board member, said Pipkin has been placed on paid administrative leave, but Harper is active on the school board.

Some citizens have been calling for Harper's resignation from the school board, which Shipley thinks would be appropriate.

"People are highly irate," he said. "It has really aroused the citizens to a point where now they're coming out to meetings and asking questions."

(Reach reporter Jenny Michael at 250-8225 or jenny.michael@;bismarcktribune.com.)