FORMER GREY GLOBAL EXEC PLEADS GUILTY

Mitch Mosallem Faces up to 78 Months in Prison

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NEW YORK (AdAge.com) -- The former head of graphic services at Grey Global Group's Grey Worldwide pleaded guilty today to 11 counts of antitrust, fraud and tax evasion in U.S. District Court in Manhattan.

Mitch Mosallem, 59, pleaded guilty before U.S. District Court Judge Thomas Griesa as part of a plea agreement. Prosecutors from the Justice Department's antitrust division, which worked with the Internal Revenue Service's criminal investigation unit, recommended that Mr. Mosallem receive a prison sentence between 63 and 78 months. Sentencing is scheduled for July 10.

Federal investigation
Mr. Mosellem's plea is the latest

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in a series of guilty pleas resulting from the government's ongoing probe into bid-rigging, bribery, fraud and tax-related activities in the advertising and marketing communications industry.

According to the plea agreement, Mr. Mosallem pleaded guilty to two counts of rigging bids and allocating contracts for the supply of graphic services purchased by Grey on behalf of Grey client Brown & Williamson, and for conspiring to defraud certain Grey clients in a phony billing; three counts of conspiracy in connection with his receipt of kickbacks from Grey vendors between 1990 and 2001; one count of conspiracy to defraud the Internal Revenue Service, and five counts of signing false tax returns.

$1.3 million in kickbacks
U.S. attorney Rebecca Meiklejohn for the Southern District of New York said Mr. Mosallem received from kickbacks unreported income of $245,000 in 1996; $224,000 in 1997; $300,000 in 1998; $260,000 in 1999; and $318,000 in 2000 totaling $1.3 million.

Thirteen months ago, Mr. Mosallem was arrested on charges of conspiracy to commit mail fraud. Mr. Mosallem was scheduled to go to trial on April 14. His attorneys said in court today that negotiations for a plea agreement began April 4.

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