'Overbilling' Trial Date Set for O&M Executives

17 February 2004

Whether eventually judged innocent or guilty, two former senior executives at Ogilvy & Mather New York have been sentenced by the US District Court for the Southern District of New York to eight months on tenterhooks.

Ex-chief financial officer Thomas Early (48) and Shona Seifert (43), onetime executive group director, indicted on January 6, appeared before the court on Friday only to learn that their trial will not start until September 7. They face charges of conspiracy to defraud the US government by overbilling on the White House Office of National Drug Control Policy antidrug ad campaign.

Early and Seifert each entered pleas of not guilty and were released after signing a $500,000 (€391,212; £264,234) bond and pledging $25,000 in cash or collateral. Each has been charged on one count of conspiracy and ten of making false claims. They are scheduled to appear again before the court on April 12.

Each count carries a statutory maximum of five years in prison and millions of dollars in fines. However, under federal sentencing guidelines the period of imprisonment would be less than the maximum term.

According to the grand jury indictment, Early and Seifert worked with unnamed co-conspirators to defraud the US government by inflating labor costs while servicing the ONDCP account from May 1999 through April 2000.

A third O&M ex-staffer who also worked on the account -- head of broadcasting both at O&M and sibling agency MindShare, Peter Chrisanthopoulos -- pleaded guilty two weeks ago. He still awaits sentence, although it may transpire he has entered into a plea-bargain agreement with prosecutors.

Two years ago O&M made a $1.8 million settlement relating to civil charges that it had overbilled the government. Despite this -- and in the face of heated congressional criticism -- the ONDCP agreed in July 2002 to let Ogilvy retain the account.

This year, however, it must repitch for the business as the client plans to switch to a performance-based contract [WAMN: 28-Nov-03].

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