Arctic cable founder faces 22 years in jail after admitting $250m fraud
Elizabeth Ann Pierce, former CEO of the Quintillion subsea cable project around Alaska, has pleaded guilty to using fraud to persuade investors to back the scheme.
She faces a maximum sentence of 20 years in prison on one count of wire fraud and guilty to eight counts of aggravated identity theft. Each of those carries a mandatory two-year term in prison, though sentencing rules mean she’s likely to be sentenced to just two years on top of the 20. Pierce is 55.
According to US reports, she is due to be sentenced on 16 May.
In April 2017, three months before the fraud was uncovered, Ajit Pai, chairman of the Federal Communications Commission, named Pierce as chair of his newly set up Broadband Deployment Advisory Committee (BDAC). This was charged with finding ways “to accelerate the deployment of broadband by reducing and/or removing regulatory barriers to infrastructure investment”.
She was replaced on 1 August with Elizabeth Bowles, head of a fixed wireless internet provider, Aristotle.
In July 2017 the FBI charged that Pierce forged sales agreements with four local Alaska telecoms companies – and used those fake deals to win $250 million worth of financial backing from two investors.
She forged signatures and falsified genuine agreements, said the FBI. She also faked email correspondence with one of the pretend telecoms partners to try to prevent Quintillion and the investors from finding out.
Quintillion discovered the fraud and reported it to the Department of Justice. The FBI interviewed Pierce on 25 July 2017 and were due to continue the interview on the following day, but she cancelled the second interview, with her lawyer claiming ill health.
Quintillion announced her resignation “for personal reasons” two weeks later, announcing George Tronsrue as interim CEO. He is still listed as interim CEO on Quintillion’s website.
The FBI documents say that “the cumulative value of the fake revenue agreements was more than $24 million during the first year of [Quintillion’s] subsea system’s operation, approximately $10 million during the first year of the terrestrial system’s operation, and approximately $1 billion over the life of the agreements”.
Phase one of Quintillion’s planned network (see picture) went into service in December 2017, running round the north and west coasts of Alaska, with a terrestrial fibre crossing from north to south. Quintillion still aims for phases two and three, linking Asia and then northern Canada and Europe.
According to her LinkedIn profile, Pierce was president and CEO of Quintillion Networks from December 2013. She was previously a director of Alaska Communications, moving from HR to risk management.
She now gives her status as “semi-retired”. She now lives in Austin, Texas, though she still gives Anchorage in her LinkedIn profile.
When Pierce was charged, Kristina Woolston, Quintillion’s vice president of external relations, told Capacity: “Quintillion is proud of the project we have built and are committed to expand the footprint of our fibre optic network. This is a transformative project for Alaska and beyond.”