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Invoices, Lies & Four Trips to The Pokey

November 2002

Color Wheel supplied graphic services to Grey, including retouching. Grey used these services in the course of developing advertising and marketing campaigns. Mosallem was responsible for establishing procedures for the selection and supervision of graphics suppliers, including the initial review and authorization of their bills for payment.

Enter B&W. To ensure that it received the best value on goods and services from third-party providers working with Grey, B&W required Grey to obtain at least three competitive bids for any single contract exceeding $25,000.

Casas submitted bids for Color Wheel to Grey for retouching work, with the understanding that Color Wheel would be awarded all of the B&W contracts. Casas submitted bids with inflated prices, given that: 1. he knew Color Wheel would receive the retouching contract, 2. the inflated prices had been agreed upon beforehand and 3. a number of co-conspirators submitted intentionally high non-competitive bids. On the third count, the bogus bids would make it appear that B&W's agency, Grey, had received competition for its contracts, which was not the case. In exchange for their submission of phony high bids, these actual graphics suppliers could bid and win contracts with Grey to do work for other Grey clients.

Fuzzy Math

Certain line items on the invoices were inflated to allow Color Wheel to recover three types of expenses: a. the cost of tickets to theater, sporting and cultural events for Mosallem, Panaccione, other Grey senior employees or executives and family members; b.recover the cost of printing wedding invitations, holiday cards and other personal items for the same people; and c. charges for work Color Wheel had performed on earlier jobs for other Grey clients that were not recovered due to, among other things, budget overruns.

Casas tracked the amounts of Color Wheel's expenses while Panaccione identified which jobs should be inflated, along with where and how the price puffs should appear on the invoices.

Since much of the work, by the printers and the ad agency, involved crossing state lines, it became a federal offense. This is in violation of the Sherman Anti-trust Act. Since much of the material was mailed, it also became a matter of mail fraud.

Let this be a lesson to all printers who seek to defraud customers via second- or even third-party conspiracies—stick with counterfeiting. As Homer Simpson would say, that's a victimless crime.

By Erik Cagle


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