LATEST GUILTY PLEA IN AD BID-RIGGING CASE

Owner of Graphics Services Shop Admits to Conspiracy

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NEW YORK (AdAge.com) -- An owner of a New York-based graphics services company pleaded guilty Monday in to one count of conspiracy as part of her participation in a bid-rigging scheme.

Lori Montgomery was in charge of the billing and estimating departments at Quality House of Graphics, where she also was minority owner. One of her company's clients was Grey Global Group's Grey Advertising, which has been at the center of ongoing federal antitrust investigation of bid-rigging, bribery, fraud and tax-related offenses in the marketing communications industry.

Ms. Montgomery is the

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fifth person to plead guilty in the case in the past two weeks.

Bid-rigging scheme
From late 1994 through 2001, Ms. Montgomery and other "co-conspirators" rigged bids and allocated contracts on graphics services work performed for Grey Advertising client Brown & Williamson Tobacco Corp., according to court papers filed in U.S. District Court for the Southern District of New York

The government alleged that Ms. Montgomery acted with a number of co-conspirators -- including Gabriel Casas, a former Color Wheel salesman who pleaded guilty Sept. 26 to charges of antitrust conspiracy and conspiracy to commit mail fraud; Mitchell Mosallem, formerly a director of graphics services at Grey now fighting a grand jury indictment on tax and fraud charges; and John Steinmetz, a former Grey associate director of graphic services -- to designate in advance that graphic services company Color Wheel would be the low bidder on contracts for retouching services.

Appearance of competition
"In order to give the appearance of competition on the Brown & Williamson contracts, Ms. Montgomery and certain of her co-conspirators submitted intentionally high bids to ensure that the designated low bidder prevailed," the government said.

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