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Year In Review : 2011 - Year of the Felony

December 2011 By Erik Cagle
Senior editor

If no news truly is good news, then perhaps 2011 offered the printing industry a respite from the calamity and tumult of the past three campaigns. Alas, that was not the case, but if we grade the year on a curve, then 2011 gets acceptable marks. 

While 2010 was resplendent with major acquisitions—Quad/Graphics added Worldcolor and HGI Inc., RR Donnelley obtained Bowne & Co., and IWCO Direct acquired the U.S. direct mail operations of Transcontinental Inc.—its successor came and went with little fanfare. Asset sales and closures took center stage, and crime continued to play a leading role from a news standpoint. According to our Website tracking statistics, the police blotter proved to be a popular subject.

Among the crimes reported during the year, former Harold M. Pitman Co. CFO John Eichner pleaded guilty to wire fraud and tax evasion stemming from a $2 million embezzlement scheme. In August, he was sentenced to 56 months in prison.

Brian Steele, the former controller for Dataflow Inc., was sentenced to concurrent sentences that could see him spend 12 years in prison after pleading guilty to stealing nearly $1 million from the Binghamton, NY, printer. Steele forged company checks, made fraudulent wire transfers of Dataflow’s funds, set up phony credit card accounts and took petty cash. He reportedly doctored the books to hide the crimes.

Maureen Beers took a plea deal and agreed to repay $40,000 to
Roemer Printing after being charged with two counts of misdemeanor theft. Beers, the former office manager and bookkeeper of the Middleton, WI-based firm, was accused of giving herself unauthorized pay raises of about $123,000.

The experience cost the printer one of its facilities, which was closed, and $176,000 counting the overpayment, cost of an audit and resulting IRS fines stemming from unpaid payroll taxes.

Canada had a difficult time trying to figure out how to handle alleged Ponzi schemer Tzvi Erez, the owner of print brokerage E Graphix who was accused of defrauding 70 investors of $27 million. At first, the Ontario Crown Attorney’s Office withdrew the charges in part because the court “lacked the resources to go after Erez.” But a new set of charges were filed in October, claiming Erez stole $9 million from investors through phony printing contracts. He was due back in court this month.

In one of the more odder developments of the year, publisher Condé Nast fell victim to a phishing scam of sorts. Its accounts payable department, acting on what it believed to be a request from Sussex, WI-based Quad/Graphics to send work payments to another bank account (“Quad Graph”), wired $8 million between Nov. 17 and Dec. 30, 2010. The con job was discovered when the real Quad/Graphics reached out to Condé Nast regarding outstanding payments. The money was recovered.



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