A former employee of a now collapsed US communications company is suspected of forging a letter of credit (L/C) to win a contract to provide digital cable television, telephone and Internet services in the city of Provo in Utah.

This is one of several investigations into the failed company, HomeNet Communications, which filed for bankruptcy in Washington in August 2005.

Investigations

The Utah County Attorney's Office is reportedly investigating allegations that a former HomeNet bookkeeper forged a US$50,000 L/C to prove the company's financial viability before a 2004 deadline in talks between the company and Provo city authorities.

Now it is alleged that Provo awarded the US$40 million iProvo contract to HomeNet in July 2004, based in part on the alleged forgery.

No suspicion

The city's mayor, Lewis Billings, told local media that at the time, he viewed the document without undue suspicion.

"Letters of credit are goodwill documents you have to assume are legitimate," he said. "It's a pretty serious breach," he added.

Fraud to racketeering.

Court documents reportedly reveal that the county attorney is investigating whether HomeNet defrauded investors out of more than US$1 million.

A US judge is also reported to have authorised the county attorney's office to issue subpoenas for the financial records of HomeNet and six former employees for evidence of possible crimes ranging from securities and communication fraud to racketeering.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.