Third former Grey exec indicted in print probe

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A Manhattan grand jury last week indicted John Steinmetz, a former VP-associate director, graphic services at Grey Global Group's Grey Advertising, New York. He was charged with one count of conspiring to rig bids and allocate contracts for services provided by graphics services companies.

Mr. Steinmetz is the third ex-Grey employee named as a defendant in the past year on charges resulting from a long-running Justice Department probe into criminal activity in the advertising and printing industries.

Mr. Steinmetz, according to papers filed on Dec. 12 in U.S. District Court, Southern District of New York, participated in a scheme, along with his former boss, Mitchell Mosallem, Grey's then exec VP-director of graphic services, and others, to rig bids and allocate contracts for retouching and separation services. The services were for advertisements created by Grey for its client, Brown & Williamson Tobacco Corp. Calls to Mr. Steinmetz's attorney were not returned at press time.

Others involved in the scheme, according to court papers, included Birj Deckmejian, a former salesman representing graphic-services firm Color Wheel and Gabriel Casas, also an ex-Color Wheel salesman; and Lori Montgomery, a part owner of Quality House of Graphics in Queens.

Mr. Mosallem, who left Grey in December, 2001, on May 16 was indicted by a federal grand jury for conspiring to rig bids and allocate contracts and for conspiring to defraud certain Grey clients. Nine additional fraud and tax charges were brought against Mr. Mosallem by a federal grand jury in September. Mr. Mosallem has pleaded not guilty to all charges ( QwikFIND aan98o).

One month later, on Oct. 1, Joseph Panaccione, former Grey VP-manager, graphic services, also supervised by Mr. Mosallem, pleaded guilty to one count of bid rigging and contract allocation; one count of conspiracy in connection with his participation in a scheme to inflate invoices issued by graphics services company The Color Wheel to Grey; and one count of conspiracy in connection with his participation in another scheme to defraud Grey clients by inflating invoices.

A spokeswoman for Grey Global Group said that Grey is cooperating with the Justice Department investigation. She had no comment on the charges against Mr. Steinmetz.

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