NEW YORK — Former Grey head of print production Mitch Mosallem was indicted by a federal grand jury on Thursday and charged with two counts of conspiracy.
The first count was for allegedly engaging with co-conspirators in a “combination and conspiracy in unreasonable restraint of interstate trade and commerce,” from 1994-2001, according to the indictment. Also charged on this count were print production house Color Wheel and graphic services salesperson John Ghianni.
Specifically, Mosallem and the other defendents, along with co-conspirators, allegedly rigged bids so that Color Wheel, New York, would be the lowest bidder on contracts to supply retouching and separation services for Grey’s client Brown & Williamson Tobacco corp., based in Louisville, Ky., when in fact Grey had agreed to obtain at least three competitive bids on the contracts.
Color Wheel, Color Wheel owner Haluk Ergulec and Color Wheel salesperson Birj Deckmejian were charged on the second count of conspiracy, along with Mosallem. This charge alleges that, beginning in 1991 until 2000, Mosallem and Ergulec, Deckmejian, Color Wheel, and other co-conspirators agreed to defraud Grey clients by issuing inflated invoices for prepress and print production services.
The inflated invoices were allegedly used to pay for theater tickets, sporting and cultural events purchased by Color Wheel or Deckmejian for Mosallem and other Grey executives and their families. The inflated invoices were also allegedly used to pay for printing wedding invitations, holiday cards, brochures and personal photographs. Other inflated invoices, according to the charges, were used to recoup losses on accounts, frequently for Grey clients, for which Color Wheel was not fully paid due to running over budget or if the client went bankrupt.
The charges stem from an investigation that began in January 2001 by the U.S. Department of Justice’s antitrust division.
Former Grey Exec Indicted for Bid-Rigging
