Ad executives lose fraud case

Two former Ogilvy executives face prison over fabricating hours and overbilling the US government.

Shona Seifert and Thomas Early, two former executives of Ogilvy & Mather New York, have been found guilty of planning a scheme to defraud the US government while working on an anti-drug campaign for the Office of National Drug Control Policy.

Seifert, the former senior partner and executive director, and Early, the ex-senior partner and director of finance at the WPP-owned agency, were convicted on one count of conspiracy and nine of filing false claims.

The pair face up to five years' imprisonment and a fine for each count.

The jury took just six hours to return a verdict.

During the two-week case, the court heard that the pair masterminded a scheme to overbill the ONDCP by altering timesheets on the account in 1999. When Seifert, who is on leave from her position as the president of TBWA's New York office, took the stand, she was presented with an e-mail in which she said to colleagues "I'll wring the money out of (the ONDCP), I promise".

Key to the prosecution's case was testimony from former Ogilvy executives, two of whom pleaded guilty to similar charges. They swore Seifert and Early ordered employees working on the ONDCP account to fabricate hours to attempt to make up a projected $3 million shortfall at the agency. A Post-It note, written by Seifert and stuck to a timesheet for another client, read: "Put Huggies and Wings time on ONDCP."

The defence, led by Gregory Craig, centred on the defendants' testimonies.

Ogilvy won the $140 million-a-year ONDCP contract in 1998. The defence held that Seifert and Early found the labour costs built into the contract were lower than the agency had predicted, that more staff had to be brought in to service the business and that the pair had not intended to defraud the ONDCP.

In 2002, Ogilvy paid the US government $1.8 million to end a civil investigation into over-billing on ONDCP.

Early and Seifert declined to comment on the verdict.

- Perspective, page 19.

TIMELINE

August 2001: Federal probe launched into ONDCP account, held by Ogilvy. White House ends contract.

January 2002: Shona Seifert named president of TBWA's New York office.

February 2002: Ogilvy settles civil case with ONDCP for $1.8 million. Criminal charges continue.

January 2004: Thomas Early and Seifert are indicted on charges of conspiracy and false claims.

February 2005: Early and Seifert convicted on one count of conspiracy and nine of false claims.

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