Former Grey Graphic Executive Indicted in Ongoing Print Scandal Case

NEW YORK — A Manhattan federal grand jury today returned an indictment charging John Steinmetz, a former vice president and associate director of graphic services at Grey Worldwide, with conspiring to rig bids, evade taxes and conspiracy to do both. The charges stem from an ongoing Department of Justice investigation of the print and advertising industries.

Steinmetz, a resident of Lincroft, New Jersey, was charged in U.S. District Court in Manhattan, with one count of conspiring to rig bids and allocate contracts for the supply of retouching and separation services purchased by Grey on behalf of one of its clients from late 1994 until 2001. The charges are related to a scheme involving The Color Wheel and its former owner and several former salesman connected to it.

Last month, The Color Wheel and its former owner Haluk Ergulec pleaded guilty to bid-rigging, conspiracy and tax evasion charges in this case. The DOJ is recommending that Ergulec be sentenced within a range of 37 to 46 months in prison and pay $1.5 million in restitution to the victims of his crimes, with $1.1 million going to Grey.

Steinmetz was charged along with three other defendants who were indicted earlier this year. Back in May, Steinmetz’s former boss, Mitchell Mosallem, the erstwhile evp and director of graphic services at Grey, had been indicted — along with Ergulec, The Color Wheel and two former salesman — under similar charges related to work on the agency’s client, tobacco giant Brown & Williamson.

The bid-rigging charge carries a maximum penalty for an individual of three years imprisonment and a $350,000 fine. The conspiracy charges each carry a maximum penalty of five years’ imprisonment, three years’ supervised release, and a $250,000 fine. Each of the counts of subscribing to false and fraudulent tax returns carries a maximum penalty per count of three years in prison, one year of supervised release, and a $100,000 fine, together with the cost of prosecution.