MORE CHARGES BROUGHT AGAINST FORMER GREY EXEC

Mosallem Faces Nine New Counts in Bid-Rigging Case

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NEW YORK (AdAge.com) -- A Manhattan federal grand jury today added nine tax and fraud charges against a former ad executive indicted in May on charges of conspiring to rig bids and defraud certain clients of Grey Worldwide.

The new charges against Mitchell E. Mosallem, who was executive vice president and director of graphic services at Grey Worldwide, include three additional counts of conspiracy in connection with kickbacks received by Mr. Mosallem between 1990 and 2001; one additional count of conspiracy to defraud the Internal Revenue Service; and five additional counts of signing false tax returns.

According to court papers

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made public today, Mr. Mosallem allegedly received kickbacks from three graphic services vendors who were contracted by Grey and did not account for the kickbacks on his tax returns. The alleged kickbacks included cash, travel, clothing and limousine services. According to the court papers, in return for the kickbacks, Mr. Mosallem included the suppliers on the advertising agency's limited list of approved vendors and ensured that those suppliers received a portion of the total amount of contracts awarded by Grey.

Calls to Paul Bergman, Mr. Mosallem's lawyer, were not returned by press time.

Earlier charges
In May, Mr. Mosallem, graphics supplier The Color Wheel, and John Ghianni, a salesman of an unnamed graphic services company, were indicted for conspiring to rig bids and allocate contracts for retouching and separation services provided to Grey on behalf of its clients from 1994 until 2001. In addition, Mr. Mosallem, Color Wheel, Color Wheel owner Haluk Ergulec and Birj Deckmejian, a Color Wheel salesman, were charged with conspring to defraud certain Grey clients in a false billing scheme from 1991 through July 2000.

The charges made today have no effect on the prior charges.

The investigation is part of an ongoing federal antitrust investigation of bid-rigging, bribery, fraud and tax-related offenses in the advertising and printing industries.

A pretrial conference on the case is set for Sept. 19.

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