Ad Strategist Sentenced to 5-7 Years in Prison for Faking $269 Million in Client Contracts

WINSTON-SALEM, N.C.—"There are certain politicians in this country who could probably take notes from this man. ... I've never seen anything quite like this." With those words, North Carolina Superior Court Judge John O. Craig sentenced former senior strategist and agency partner William John "Bill" Grizack to serve 57 to 81 months in state prison for defrauding ad agencies McKinney and The Variable (formerly known as Pave Advertising) with fake contracts from Coca-Cola and Brown-Forman. According to documents filed by state prosecutor W. Scott Harkey, these fictional accounts would have been worth a combined $269.9 million. "This is a case about lies and deception that fueled an upper-class lifestyle," said Harkey today in arguing for a harsh sentence, stating that Grizack "perpetuated his scheme for eight months" and that the fraud persisted long after Pave partnered with Cheil Worldwide's McKinney. The agencies hired 40 advertising professionals from around the country to work on the fake business. All of these employees lost their jobs when executives discovered the deceptions pulled off by Grizack, who was employed by both agencies at the time. UPDATE: After the sentencing hearing, The Variable released an official statement to Adweek which appears at the bottom of this story. The case, which has been covered extensively by Adweek's AgencySpy blog, officially began in November 2015 when the state of North Carolina charged Grizack with three felonies related to obtaining or attempting to obtain money or property via false pretenses. But the story of Grizack's deception is more than five years in the making, and it involves at least six different agencies that employed Grizack before his crimes caught up with him. "Right after his scheme was discovered by executives at Pave and McKinney," Harkey said, "he went to [Colorado's Egg Strategy] and did the exact same thing" by falsifying a $14 million contract with McDonald's. Timeline of Deceit Pave Advertising of Winston-Salem hired Grizack in the summer of 2010, and he moved up within the organization largely on the strength of a proprietary data-based software program that he called Brand Forensics. The agency later renamed itself The Variable and promoted this product as a key differentiator, describing it in a 2011 press release as "a derivative of the search engine results page algorithm that allows The Variable to determine with statistical significance where a query starts, where it ends, and where it stops along the way." Grizack and his fellow executives used the software to pitch new business and sought other agencies to form a partnership based on the advantages that it could supposedly grant to clients. His attorney says the software was real and effective, but Grizack began to falsify contracts when he couldn't land the clients he wanted. "[Grizack] created a software program that, from the victim's own mouth, was 'revolutionary,'" said defense attorney Bernard Desrosiers, adding, "He started getting legitimate contracts from clients, but the two he wanted most he couldn't get." Grizack then developed a plan to fake the wins using what The Variable president and partner Keith Vest described as "fake contracts, fake email addresses, fake phone numbers and fake documents" that allowed him to "[impersonate] officers at these companies." The False Promise of New Business Grizack badly wanted to become a partner at Pave. In order to do so without paying a $150,000 partnership fee, he was required to bring in at least $500,000 in new business revenue—a requirement he satisfied via what Judge Craig called "a very ingenious scheme." Desrosiers conceded that Grizack was motivated by greed and pride, stating: "He thought he could get away with it. He didn't." Multiple current and former employees of The Variable attended the court hearing, and as Desrosiers described Grizack's "crime-free life," a female attendee began shaking her head emphatically, earning a rebuke from the judge who threatened to remove her from the courtroom. "Grizack was not out to please anyone. He is a con man who is addicted to lying," said Vest in his subsequent statement to the court. "We don't want to see Grizack do this to other companies," Vest said. "He conned the company he worked for before us. He conned us and McKinney. The company he moved to after ours was able to uncover his deceit before it went too far." His newer deception was only revealed, Vest said, because an unidentified person contacted Egg Strategy to alert the agency that the McDonald's account was fake. $4 Million Lost, Along With Jobs Harkey claimed that Grizack's deceptions led to $4 million in combined losses for The Variable and McKinney. These losses also took a human toll, as Harkey illustrated by reading from emails written by former employees at the two agencies, one of whom had worked at Pave/The Variable for more than a decade before losing the job. In the years after Grizack was fired, the two agencies worked with the North Carolina State Bureau of Investigation to build a case against him. Those efforts were led by special agent Kevin Snead, who received thanks from both Harkey and Vest in the courtroom. Grizack pleaded guilty to all charges on March 3 of this year, but he continued to gain employment as a highly paid senior strategist for nearly five months after the charges were first filed. After leaving Egg Strategy in late 2014, he moved to California and worked at Los Angeles' Dailey Advertising as chief strategy officer for nearly a year. He listed his address as West Hollywood when entering his plea, but up to that very day, he was simultaneously employed or contracted by three agencies in the San Francisco area: Goodby Silverstein & Partners, Venables Bell & Partners and Omnicom consultancy Interbrand. In a statement, Grizack apologized to his former employers while shaking his head profusely, thanking the court, his wife and his two daughters. "From my heart, I am truly, truly sorry," he said. The judge said that the most important factor in his sentencing decision was the fact that dozens of people lost their jobs because of Grizack's actions. He then cited an unnamed "rare genetic disorder that could be fatal and most likely will greatly shorten his lifespan" in explaining why he did not choose a longer sentence. But the judge also pointed out that the agencies deserve some blame for letting their judgment be clouded by wishful thinking and the potential for financial gain. "There is just a small amount of gullibility and greed on the part of the victims," he said, comparing the case to the tale of the goose that laid the golden eggs. "I hope you will take this as a hard-earned lesson." After the sentencing, Keith Vest released an official statement on behalf of his agency. It reads: "Bill Grizack caused employees to lose their jobs; he caused unimaginable emotional turmoil and he almost destroyed a company whose only fault was an instinct to trust." "For the past three years, we have worked closely with the authorities so that no other company falls victim to Grizack's duplicity," Vest writes. "Since 2013, The Variable has thrived – more than quadrupling agency revenues, tripling the size of our staff and we are currently a reigning AdAge Southeast Small Agency of the Year. These accomplishments are a testament to the talent and tenacity of our team. We are happy to officially put this matter to rest and to continue the jobs we love with our focus on the future." Spokespeople for McKinney and Egg Strategy declined to comment on the case. If you have worked with Bill Grizack, were involved in any of his agency activities or have more information regarding his case, please contact the author at patrick.coffee@adweek.com.

Brand Marketing

Ad Strategist Sentenced to 5-7 Years in Prison for Faking $269 Million in Client Contracts

Bill Grizack deceived multiple agencies, costing dozens of jobs

Patrick Coffee

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Patrick Coffee