Magazine Circulation-Fraud Case Enters Plea Negotiations

Accused Consultant at 'Laptop' Also Worked for Other Titles

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NEW YORK (AdAge.com) -- One of the publishing executives accused of circulation fraud at Laptop magazine has entered plea negotiations with the U.S. Justice Department, court documents filed in the case show.

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Deal likely
Proceedings regarding the executive, John Jay Annis, are on hold through Jan. 30 while the parties try to hammer out a deal, which Judge Steven M. Gold has indicated he considers likely.

The U.S. attorney's office for the Eastern District of New York, which has been investigating circulation practices since schemes by Newsday and Hoy to inflate their numbers became public, secured the arrests of Edward D. Brown, president-publisher, Bedford Communications, and Mr. Annis, Bedford's circulation director, last October.

Bogus distribution
Prosecutors accused the pair of scheming to inflate circulation at Laptop magazine by hiring a distributor to accept 15,000 copies that they would claim as paid circulation -- whether or not they were ever distributed. The distributor they hired was really an undercover postal inspector, prosecutors said.

It is unclear what a plea arrangement would mean to the circulation investigation. According to the Bedford Web site, Mr. Annis serves as a circulation consultant to "several other publishing companies," so he may have information of interest to prosecutors about magazines beyond Laptop. That could explain the surprising effort by the government to arrange an elaborate sting on executives at Bedford, a relatively small target.

No comment
The lead prosecutor on the case, Jonathan Edward Davis, declined to comment on any such speculation or other facets of the negotiations. An attorney for Mr. Annis did not respond to a message seeking comment.

The U.S. attorney's office has also subpoenaed Time Inc. for information on that company's bulk-distribution programs. Time Inc. disclosed the subpoena in September and said it was complying.

But a plea deal may produce nothing more than testimony against Mr. Brown or a quicker resolution of the case.

Mr. Brown's status is also unclear. After the original order for his arrest and a reported not-guilty plea, court documents do not mention him again and do not list an attorney for him. Mr. Brown did not return a call seeking comment.

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