These details emerged after a Manhattan grand jury Sept. 17 indicted Mr. Mosallem on nine tax and fraud charges, adding to existing charges, made in May, of bid-rigging, conspiring to defraud certain Grey clients and conspiracy to commit mail fraud in a false and fraudulent billing scheme.
Mr. Mosallem's lawyer, Paul Bergman, said he and his client intend to defend against the charges "as vigorously as we can." Mr. Mosallem pleaded not guilty to all charges.
Other parties indicted by a federal grand jury in May have pleaded not guilty, including: Manhattan print-production company Color Wheel and John Ghianni, a longtime printing-services broker representing Quality House of Graphics, on charges of bid-rigging from late 1994 until 2001; and Color Wheel owner Haluk Ergulec; Color Wheel salesman Birj Deckmejian; and Color Wheel, on charges of conspiring to defraud certain Grey clients in a phony billing scheme from 1991 to July 2000.
Documents filed most recently outline relationships Mr. Mosallem allegedly maintained with a handful of brokers, or independent salesmen representing certain graphics suppliers, and printing company owners, who participated in the alleged scam but are not named as defendants.
The brokers, according to court papers, include "CC-3", who represented a Manhattan graphics-supply company called "GS-1," and "CC-4," who as a broker represented two Manhattan pre-press companies and is also a co-owner of a printing company in New York City. CC-4's printing company and the two pre-press firms he represented are called "GS-2." Another group, the owner and executives of affiliated graphics-supply companies, as well as sales representatives of those companies, who all allegedly conspired with Mr. Mosallem, are referred to as "GS-3."
Between 1990 and 2001, broker CC-3 paid Mr. Mosallem cash kickbacks, usually over lunch or dinner at Manhattan restaurants, according to the papers. In return, Mr. Mosallem ensured that the printer represented by CC-3 was on Grey's list of approved vendors, and that the printer received work from Grey, the papers said.
People familiar with Mr. Mosallem's activities said he frequently dined at The Palm Too, a steakhouse located near Grey's New York headquarters.
The kickbacks also enabled broker CC-3 to keep the printer's prices at noncompetitive levels, allege authorities, forcing Grey and its clients to pay higher prices than they would have if Mr. Mosallem had arranged for a competitive review. The papers also allege CC-4 allowed Mr. Mosallem to charge clothing, meals and limo services to its company accounts, in exchange for GS-2 being included on Grey's vendor lists. Again, the court papers said, the result was that Grey clients paid higher prices, and also indirectly paid for the extras and cash received by Mr. Mosallem.
GS-2 paid $6,267.67 for three suits and one jacket ordered by Mr. Mosallem from a Manhattan retailer. GS-2 also paid $1,463 for 38 golf shirts also ordered by Mr. Mosallem, according to the documents.
GS-3, the court papers said, paid for $2,556.42 in airline tickets used by Mr. Mosallem or a member of his family. The destination is not cited, but people familiar with Mr. Mosallem's travels say that a Puerto Rico hotel, Il Conquistador, was a favorite getaway. Mr. Mosallem's lawyer declined to comment.
no further charges
At a pretrial conference Sept. 19, the government attorneys said they did not plan to add further charges against Mr. Mosallem or the other defendants, and requested that the case move to trial. They also said they have been in plea discussions with certain of the defendants, but did not say who. Mr. Bergman, attorney for Mr. Mosallem, requested 45 days to review new material pertaining to the additional charges. Judge Thomas Griesa granted Mr. Bergman's request. No trial date was set.
Who: Mitch Mosallem, former exec VP-director graphic services, Grey Worldwide
What: Indicted on nine additional charges
For: Allegedly accepting kickbacks for guaranteeing work to graphics suppliers and defrauding the IRS