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Ogilvy's DiOrio Pled Guilty in ONDCP Case

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NEW YORK Al DiOrio, the contract coordinator at WPP Group's Ogilvy & Mather on the $1 billion Office of National Drug Control Policy ad account, pled guilty to conspiracy and fraud two weeks before he died at the end of 2003, it emerged in court Thursday.

He is the third Ogilvy executive revealed to have pled guilty in connection with allegations that the ad agency illegally inflated its billings on the ONDCP account.

The first was Peter Chrisanthopoulos, the former director of broadcast at Ogilvy and sister agency MindShare. The details of that plea remain sealed.

The second was Robert Zach, who pled guilty in September 2003 to conspiracy to defraud the United States. Zach's conviction was discovered by a search of the federal court datatbase conducted by Brandweek. Zach declined comment. The former strategic planning director for media at Ogilvy retired in September 2003.

While the convictions of DiOrio and Zach were not sealed, they had nonetheless never been mentioned until last week, either in open court or in press accounts, or by the agency itself.

It brings to five the number of Ogilvy employees charged in the investigation.

The other two executives under indictment are senior partner and executive group director Shona Seifert (who is currently the president of Omnicom Group's TBWA\Chiat\Day in New York), and Thomas Early, former senior partner and director of finance. Seifert and Early have pled not guilty to conspiracy and fraud charges, and will stand trial in February.

DiOrio's name came up in a pretrial hearing in which Judge Richard Berman asked questions about the identities of two Ogilvy execs mentioned in a May 22, 2001, memo written by Ira Raphaelson, a lawyer for Ogilvy and PwC. In a discussion of an employee who couldn't remember which manager ordered time sheets to be altered, Raphaelson wrote, "There is strong, if not conclusive extrinsic evidence that the manager who gave the instruction was the Ogilvy contract coordinator. He admits as much and the account manager denied doing so. Moreover, the contemporaneous handwritten instructions to move the time are in his and not the account manager's handwriting," the document states. No names are mentioned.

In court Thursday, however, Assistant U.S. Attorney Kim Berger said that the contract coordinator was DiOrio. "He passed away two weeks after his guilty plea," Berger added. The government intends to introduce some of his posthumous statements as evidence at the trial.

Berger also identified the account manager as Melissa Cunningham, who has since left Ogilvy and is believed to be employed at Saatchi Consumer Healthcare in New York. Cunningham did not return a call.

Raphaelson's memo was mentioned in a Government Accountability Office investigation of Ogilvy that found widespread billing irregularities.

Since the indictments were first brought in January, Ogilvy has emphasized that it cooperated fully with the government's investigations of its billing. It reimbursed the government $1.8 million in 2002 to settle all civil accusations. The agency has also put in place an ethics officer and an ethics hotline to prevent dubious conduct in the future, according to a statement.