The Anatomy of an Ad World Scam

For many hungry ad agencies hit by alleged fraudster Gilbert Solnin, the pitch was promising if somewhat vague.

“I do have a very unique opportunity which I wish to discuss with you and would like to follow up with a telephone call to speak to you about it,” he wrote to Maris, West & Baker, a shop in Jackson, Miss. “I am seeking an agency that understands more than traditional advertising and would be of great value to the business I have, which includes managing a unique venture very soon.”

For Scott Burke of Mortar Agency in San Francisco, Solnin’s offer was just too good to pass up.

“Last year wasn’t exactly going gangbusters for anyone, so if we could get some leads, that would be great,” Burke explained. Eight-year-old Mortar eventually forked over $10,000 to Solnin in order to secure business which the firm says was never forthcoming.

On Wednesday last week, the U.S. Postal Service issued a warrant for the arrest of Solnin, 61, on charges of mail fraud related to his beverage venture, maintaining that these agencies were just a few of over a dozen that the Long Island resident allegedly bilked out of a total of at least $400,000. In response to the warrant, Solnin surrendered himself to authorities at the federal court house in Central Islip, Long Island. He was released on $250,000 bond.

HOW DID IT HAPPEN?
Solnin, who provided a biography to Adweek stating that he spent 12 years at Seagram in the 1980s revamping and revitalizing the Crown Royal whiskey brand, approached a selection of mid-size and boutique agencies, claiming he was in on the ground floor of a new beverage campaign in the U.S.

A letter that Solnin provided to one agency said that U.K. venture capital group CVC had agreed to bankroll the introduction of three new beverages in the U.S.: Vodka 14 from Colorado, Ronin energy drink from Minnesota and Finn Aqua from Finland. He just needed ad agencies that could handle the accounts.

For many of the businesses, a few kind words helped steer them toward the deal. “I’m really impressed and delighted by our discussions and accomplishments of your agency,” Solnin wrote to Kaiser Marketing, a 40-year-old boutique ad and PR firm in Los Angeles.

“They’ve heard of us. We do good work. We deserve this,” said Bryan Ward, founder of the 34-person firm Giant Ideas in Pittsburgh, explaining how the flattery worked.

Interviews with a dozen agencies confirmed to Adweek that Solnin flew to San Francisco, Los Angeles, Salt Lake City, New Orleans, Pittsburgh, Minneapolis, Dallas, St. Louis, Portland, Ore., and other cities around the country from 2006 to late 2010, on each firm’s dime, to pitch his drinks campaigns.

Once the agency expressed serious interest, Solnin offered a contract. The terms were loose. The agreement with Giant Ideas, for example, stipulated that Solnin would be paid $3,500 to $8,000 via direct deposit on the 15th of every month.

Secrecy was paramount. Agencies that reached out to any of these drink companies on their own risked violating the terms of Solnin’s contract and blowing the deal. On the flip side, if the agency decided to back out, Solnin had a year to return the fees.

Once the contract was signed and the fees were paid, Solnin was charged with drumming up new business for the agency for the next five years, starting with this beverage deal.

DISAPPEARING ACT

Yet both the USPS complaint against Solnin and the agencies interviewed for this story claim that Solnin’s work was never done. Federal court records describe Solnin as an erratic communicator who attributed his lack of progress to a variety of ailments: dizzy spells, complications from a car accident and even multiple sclerosis, which he allegedly had been diagnosed with recently.

Matt Baris, who runs Vodka 14, said that he had a three-month-long flirtation in 2006 with Solnin, who promised to promote his brand nationally and then disappeared.

“We were all going to make a fortune,” said Baris. “We gave him all of this information, and then he completely fell off the face of the earth.”

Over the next four years, Baris said that he fielded calls from 25 different ad agencies looking to verify his connection with Solnin.

Jeff Nachreiner, who ran energy drink brand Ronin, LLC, until 2007 when it was discontinued, had a similar experience.

He said that he paid Solnin $6,000 to go in on the beverage campaign but, like the others, lost contact.

Nachreiner has also received calls from ad agencies looking to verify his involvement. “[Solnin] was trying to use the Ronin name three years after it no longer existed,” he said.


THE BACK STORY

Solnin’s history is difficult to verify. He reported in a 1998 bankruptcy filing that he made more than $200,000 in 1996 working at Seagram. He appears to know people in the advertising and beverage fields, according to the ad agencies interviewed for this story, but it’s not clear how deep his connections go. One ad executive, who asked not to be named, hired Solnin several years ago to help build his company’s relationship with drink manufacturers.

“He really didn’t appear to have the connections that he said he had,” said the ad man. “He started getting viciously vituperative if people didn’t return his phone calls. He seemed to be a guy who was getting frustrated with his life.”

The company let the relationship peter out when Solnin did not come through with the promised connection, which the source said is not unusual in the industry.

BREAKING THE SILENCE

Eventually, the agencies started talking to each other on the phone and via electronic message boards.

Michael Kaiser of Kaiser Marketing, who retired not long after his dealings with Solnin, started calling around to other agencies that Solnin mentioned during his pitch. He went to the police in L.A. and the FBI but got nowhere because the amount that Solnin had allegedly taken did not reach their threshold for action. Most of the agencies involved credit Kaiser for pushing federal investigators to act.

Dave Newbold, the head of 39-year-old Richter7 in Salt Lake City, posted a warning about Solnin on the Web site Ripoffreport.com, after paying him $10,000 to get in on the deal.
Despite the accusation, Solnin has remained unrepentant. He has boasted to Adweek in previous interviews that he has never been sued by any of the agencies that have complained about him. In fact, he has threatened civil and criminal action himself against some agencies for breach of contract, according to e-mails from Solnin to agencies.

After vodka distiller Baris continued to receive phone calls about Solnin, Baris also posted a note on his Web site in November 2010, alerting people that he was not in business with the pitchman.

That’s when Solnin finally rematerialized—after three years of silence—with a threatening e-mail.

“I do not want to have to do something that will harm your brand and you, but will have to do it if you leave me no other choice,” Solnin wrote, advising Baris that they were still under contract despite the years of inactivity. He warned Baris to “scrub” his Web site.

Baris took the post down but told Solnin that if he heard of him using the Vodka 14 name in his pitch again, he would repost the warning.

Most of the ad agencies have been reluctant to fight Solnin.

“That’s his MO all along: to make these threats,” said Pat McGuinness, who runs the startup and turnaround-focused Trumpet Group in New Orleans. “He’s right that no one has ever taken him to court. I think that many of these agencies are having an internal conversation about how much it would cost to get their money back—if it’s worth it—and if they won [in court], how they would go about collecting it.”

McGuinness had a particularly vicious exchange with Solnin. After speaking with some of the other ad agencies that felt they had been taken advantage of, McGuinness e-mailed and called Solnin at home vowing to get back the $10,000 in fees that his business had paid.
Solnin responded via e-mail.

“Attorneys have been notified of your harassment of my wife and son, and the police are on their way over now. The FBI has been contacted as well. Your threats are finished, and I AM taking legal action against you starting tomorrow. You just took a contract dispute and made it into a criminal activity by you. Attorneys are starting tomorrow. You threaten my wife and kid, you sick person,” Solnin wrote.

But it was Solnin the feds were interested in on Wednesday, arresting him when he turned himself in on the federal mail fraud charges in connection with his alleged beverage business scam. Under the terms of his bail, the U.S. Attorney’s office in Long Island comprised a list of 40 companies that Solnin is barred from contacting.

“The arrest of Gilbert Solnin on Wednesday was the result of a months-long investigation by Postal Inspectors into an advance fee scheme he allegedly conducted,” the U.S. Postal Service said in a statement. “Solnin was charged with allegedly defrauding advertising firms across the U.S. of almost a half-million dollars by convincing them to pay fees for a ‘unique opportunity’ that never materialized.”

Despite repeated requests, Solnin declined to comment for this article.