Former O&M Duo Guilty of Antidrug Account Fraud

23 February 2005

A US District Court in New York on Tuesday adjudged two former Ogilvy & Mather executives guilty of falsely inflating labor costs charged to the US Office of National Drug Control Policy.

The court found that Shona Seifert, senior partner and managing director of client services at O&M's New York office at the time of the offences, and Thomas Early, director of finance, had directed certain employees to revise timesheets. They had also caused falsified timesheets to be submitted to the government.

Seifert and Early were found guilty of one count of conspiracy and nine counts of false claims. Each faces a maximum prison sentence of five years plus a $250,000 fine on the conspiracy count and on each of the nine counts of false claims.

The hapless pair now have to sweat it out until May 16 before they know their fate. Both intend to appeal the verdict.

According to the prosecution, the guilty duo faked and revised timesheets to make up a $3 million revenue shortfall on the account, allegedly responding to the anger of O&M North America's co-president Bill Gray at the loss of income. Gray was not among the accused.

Following the verdict, Early's attorney Laurence Urgenson commented bitterly: "It's a lousy time to be a corporate financial guy in America."

And Chuck Porter, chairman of independent Miami shop Crispin Porter + Bogusky, had his five cents-worth: "It makes us all look bad," he told the Wall Street Journal.

The $130 million ONCDP account is seen by many on Madison Avenue as a poisoned chalice due to its inherent and pervasive politicking. When up for pitch last September, only two contenders (Foote Cone & Belding and J Walter Thompson) displayed any serious interest in the apparently glittering prize.

Data sourced from Wall Street Journal Online; additional content by WARC staff