Executive at Ad Agency Quits Over Scandal

ANUSHA SHRIVASTAVA

Associated Press

NEW YORK - A senior executive at the Ogilvy & Mather advertising agency's New York office has stepped down after being charged with conspiracy for allegedly overbilling the federal government for a public service campaign against drugs.

Thomas Early, 48, director of finance at Ogilvy's New York office, and Shona Seifert, who once directed Ogilvy's $684 million contract with the government, were accused Tuesday in a federal indictment with directing employees to exaggerate their work on the project when they filled out time sheets.

In a statement Wednesday, the company said Early has resigned "in order to devote his full energies to obtaining a full vindication in this matter."

Seifert left the agency two years ago, and now works at another agency. She has also denied any wrongdoing.

Calls to lawyers for Early and Seifert were not immediately returned.

Early and Seifert allegedly caused the company to submit false vouchers to the government to support inflated labor costs, according to an indictment filed in the U.S. District Court in Manhattan.

The overbilling occurred as the agency worked on a national media campaign for the Office of the National Drug Control Policy, a branch of the executive office of the U.S. president, the government said.

Ogilvy was awarded a contract in December 1998 to create a print and broadcast campaign to discourage drug use among the nation's young people by educating them about the dangers of illegal drugs. The campaign continued until last week.

Laurence Urgenson, a lawyer for Early, had said on Tuesday, "Sometimes the government gets it wrong. We believe that this is such a case. We fully expect that Tom Early will be completely vindicated."

Seifert, now president of TBWA/Chiat/Day, New York, said Tuesday: "Neither with respect to the indictment announced by the U.S. attorney's office nor at any other time in my life have I ever committed any criminal misdeed of any nature."

If convicted, each could face up to five years in prison on each of 11 counts in the indictment and millions of dollars in fines.

Ogilvy, which was not charged, said it was unprepared for complex and unique federal recordkeeping rules when it first signed the contract but changed its procedures when it realized it was not meeting federal requirements.

The agency said it stopped billing the government in the summer of 2000 until its recordkeeping system was changed, billing missteps were disclosed and the government was overcompensated in a civil settlement.

After its new system was certified by outside and government auditors, Ogilvy "instituted the most rigorous accounting compliance program in our industry," the agency said.

Associated Press Writer Larry Neumeister contributed to this report


[zombienote: Ha ha.]


Found: Wed Jan 07 13:18:38 2004 PST
Source: Journal Gazette, The (IN)
Copyright: 2004 The Journal Gazette
Contact: letters@jg.net
Website: http://www.fortwayne.com/mld/journalgazette/
Details: http://www.mapinc.org/media/908
Webpage: http://www.fortwayne.com/mld/newssentinel/...
Newshawk: http://drugpolicycentral.com/bot/


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Source: Yahoo News

Ogilvy Partner Resigns After U.S. Charge
Wed Jan 7, 1:39 PM ET - Reuters

LOS ANGELES (Reuters) - Advertising agency Ogilvy & Mather said on Wednesday that senior partner and finance director Thomas Early had resigned after the federal government charged him and a former employee with overbilling the government for a media campaign.



Early and Shona Seifert, former senior partner and executive group director at Ogilvy, a unit of the world's No. 3 advertising company, British-based WPP Group Plc (WPP.L), were charged in Manhattan on Tuesday with participating in an elaborate scheme to defraud the government.


The indictment charges the executives with developing an extensive scheme to fraudulently inflate labor costs for an anti-drug media campaign funded by a 1998 contract from the Office of the National Drug Control Policy (ONDCP).


Under the contract, Ogilvy could have received about $1.5 million a year for labor costs, according to an Ogilvy spokesman.


Early, 48, and Seifert, 43, are scheduled to appear before U.S. District Judge Richard Berman in Manhattan on Wednesday. Both are charged with one count of conspiracy and 10 counts of false claims, according to David Kelley, U.S. Attorney for Southern District of New York.


If convicted, each faces up to five years in prison and a fine of $250,000 or more based on the amount of gains involved.


Ogilvy on Wednesday said Early resigned to devote his time toward being vindicated of the charges.


A spokesman for the ad agency said Seifert had left the agency about two years ago. Seifert is now president of the New York office of TBWA Chiat/Day Advertising, a division of Omnicom Group Inc. (NYSE:OMC - news).


Ogilvy has said that it had been cooperating with the government review and investigation for three years and with the U.S. Attorney's Office in Manhattan for more than two years.