WPP Asks Judge to Dismiss Former Grey Exec's Lawsuit

Mosallem Says He 'Took the Fall' for Scandal

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NEW YORK (AdAge.com) -- Even though Mitchell Mosallem, former exec VP-director graphic services at Grey Global Group's Grey Worldwide, New York, is in prison for 70 months, he's rekindling chatter in the ad world over the scandal that landed him in Brooklyn's Metropolitan Detention Center.
Mitchell Mosallem, currently serving a prison sentence, alleges in his lawsuit that senior managers at Grey were involved in the printing services scandal.
Mitchell Mosallem, currently serving a prison sentence, alleges in his lawsuit that senior managers at Grey were involved in the printing services scandal.

Maintaining he was not the mastermind of the kickback and bid-rigging scheme between the agency and graphics house Color Wheel for which he was convicted, Mr. Mosallem is suing Grey and parent WPP Group for $4 million in damages. He charges that he "took the fall" for Grey, which covered up the role of senior managers.

Yesterday, lawyers for WPP convened in State Supreme Court before Judge Ira Gammerman to try to dismiss a lawsuit filed Nov. 10, 2005, by Mr. Mosallem against Robert Berenson, former vice chairman and general manager of Grey; Steven Felsher, Grey's chief financial officer; Ed Meyer, chairman of Grey; WPP Group; and Grey's former law firm, Skadden, Arps, Slate, Meagher & Flom.

A decision on the motion to dismiss should be made in the next 60 to 90 days.

He said, they said
Mr. Mosallem, who is representing himself against these heavyweights, is charging the parties participated in breach of contract, breach of fiduciary duty, abuse of process, and intentional and negligent misrepresentation.

In December 2005, Mr. Mosallem sent a cover letter and copy of the complaint to WPP Group Chief Executive Martin Sorrell, saying he said he had nearly 20 boxes of evidence to support his claim. "I was made to take the fall for Grey," he wrote.

In March 2002, Mr. Mosallem was arrested by federal authorities on charges of conspiracy to commit mail fraud. By September 2002, he was indicted on charges of conspiring to rig bids, allocating contracts for the supply of print production services purchased by Grey, conspiring to defraud Grey clients in a phony billing scheme, three counts of conspiracy in connection with kickbacks, one count of conspiracy to defraud the Internal Revenue Service and five counts of signing false tax returns. The various illegal activities occurred from 1991 to 2001.

Cash, clothes, cars and travel are among the handouts proffered to Mr. Mosallem by graphics-supply companies and print brokers in exchange for business, according to documents filed in U.S. District Court, Southern District of New York, by the Justice Department. Authorities said the gifts, given in exchange for business, ultimately were paid for by Grey clients.

'That is tragic'
Other Grey employees supervised by Mr. Mosallem indicted in the 2002 proceedings were John Steinmetz, a former VP-associate director of graphic services, and Joseph Panaccione, VP-manager of graphic services at the time.

Mr. Mosallem pleaded guilty to 11 counts of antitrust, fraud and tax evasion in April 2003. On Nov. 13 of that year, Mr. Mosallem was sentenced to 70 months in prison. The judge had said, "You contributed to others who, in my view, would never have violated the law at all, now being convicted of felonies. That is tragic."

Grey spokesman Owen Dougherty said: "Mitch Mosallem's complaint has no merit." WPP's spokesperson didn't comment, and Mr. Berenson didn't return a call for comment by press time.
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