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Graphics Supplier Pleads Guilty to Conspiracy

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NEW YORK -- The federal investigation into the billings practices of print production companies has claimed another graphics supplier: Martin Schwartz, the owner of K & S Supply, AAMM Printing and Storia Offset Services, has pleaded guilty to various conspiracy charges and is awaiting sentencing, said representatives of the U.S. Attorney's Office for the Southern District of New York.

Schwartz faces 10 years in prison for selling phony invoices. From January 1992 to June 1999, he illegally billed his companies $12 million using false invoices, according to court papers filed last month in U.S. District Court. Calls to executives at the three companies, all New York, were not returned.

Additionally, according to court papers filed on March 28, Schwartz conspired with Ivan Glick, a salesman of commercial printing services, to defraud Brouillard Communications and Deltakos Advertising. Glick pleaded guilty to conspiracy and tax- evasion charges.

This comes as one of New York's largest print production houses, Color Wheel, is being investigated by the Justice Department's Antitrust Division, said sources, in relation to the upcoming hearing for Mitchell Mosallem, the former evp and director of print services for Grey Global Group's Grey Worldwide.

Mosallem is charged with committing mail fraud and is accused of overbilling Grey clients.

Color Wheel's former CFO, Donald LaPorte, 54, committed suicide on Jan. 23, a representative for the New York City Medical Examiner's Office said.

Separately, Color Wheel and subsidiary Moving Images are named in a civil lawsuit filed in State Supreme Court on March 21. The suit, brought by New York postproduction facility Editing Concepts for its subsidiary, The Tape House, alleges Color Wheel has raided its employees since 1998. A ruling is pending in that case.