Supervalu, IOS, Coupon Fraud, Money Laundering

SUPERVALU – WHAT’S THE STORY ?



In the continuing saga of IOS now comes allegations that Supervalu, a shareholder and business partner of IOS are answering questions to the U.S. Attorney’s Office as to a two transactions that generated more than $10 million in payments to sep;erate companies one identified as “Society Nights Productions, Inc,” of Silver Springs Florida.

Documents filed in the United States District Court of Idaho in an action to “forfeit and condemn” to the use and benefits of the United States of America for the sum of $7,038,941.92 with deposits beginning on 2/23/07 into Banks Accounts at HSBC Bank, US, Miami, Florida. The U.S. Attorney is seeking forfeiture for violation of 18 U.S.C. // 1341, 1956 & 1957. An additional filing seeking more than 3 million dollars is also instituted. Thus, more than $10 million in financial assets is in question and froze during legal proceedings.

The basis for the forfeiture is that the defendants property alleged conspiracy involved these specific transactions or attempted transactions in violation of section 1956 and/or 1957 (money laundering) or property traceable to such property

$6 million plus was wired into an account at HSBC Bank located in Miami Florida in the name of “Society Nights Productions, Inc, doing business as “Perini”. The money came from the Albertson/Supervalu account. In addition another $507,929.66 was wired from the account from another victim under the name “ROHM”, with additional alleged fraudulent funds which may have been deposited into said accounts and also including funds wired back into said accounts from foreign bank to which they were wired. The account holder has stated that these funds are from a source unknown to him.

In the verified answer by Supervalu Inc. to the court, Supervalu confirms the transfers, BUT denies knowledge or information as the allegations. Supervalu admits the truth in the allegation in Paragraph #2 of the Plaintiff’s Verified Complaint “in REM” to the extent that it is believed that the property identified originated from wire transfers that Supervalu was INDUCED into making under false pretenses. (“In REM” describes the jurisdiction the court may exercise over property. Jurisdiction “in rem” assumes the property or status is the primary object of the action, rather tan personal liabilities not necessarily associated with the property.) Supervalu denies the allegations in Paragraphs 3, 4 and 5 of the plaintiff’s complaint. Supervalu also denied paragraphs 6 and 7 of the verified Complaint.

Supervalu confirms that it contacted the FBI upon discovering that it had been induced under false pretenses into making wire transfers to an account not properly entitled to receive said funds.

The funds were transferred into an account owned and controlled by “Society Nights Productions, Inc.” of Silver Spring, Florida. The registered agent and named officer of this company is identified as William R. Carney lll, of Silver Springs, Fl. The company originated in 2005 is active and registered as doing business with the state of Florida under filing P05000141279.

So what’s going on here? Why the FBI? Where’s the money going too?

If you have the answer let us know!!!

Tell us what you think!!

SUPERVALU - MONEY LAUNDERING QUESTIONS

SUPERVALU – WHAT’S THE STORY ?



In the continuing saga of IOS now comes allegations that Supervalu, a shareholder and business partner of IOS are answering questions to the U.S. Attorney’s Office as to a two transactions that generated more than $10 million in payments to a company identified as “Society Nights Productions, Inc,” of Silver Springs Florida.

Documents filed in the United States District Court of Idaho in an action to “forfeit and condemn” to the use and benefits of the United States of America for the sum of $7,038,941.92 with deposits beginning on 2/23/07 into Banks Accounts at HSBC Bank, US, Miami, Florida. The U.S. Attorney is seeking forfeiture for violation of 18 U.S.C. // 1341, 1956 & 1957. An additional filing seeking more than 3 million dollars is also instituted. Thus, more than $10 million in financial assets is in question and froze during legal proceedings.

The basis for the forfeiture is that the defendants property allegedly conspiracy involved these specific transactions or attempted transactions in violation of section 1956 and/or 1957 (money laundering) or property traceable to such property

$6 million plus was wired into an account at HSBC Bank located in Miami Florida in the name of “Society Nights Productions, Inc, doing business as “Perini”. The money came from the Albertson/Supervalu account. In addition another $507,929.66 was wired from the account from another victim under the name “ROHM”, with additional alleged fraudulent funds which may have been deposited into said accounts and also including funds wired back into said accounts from foreign bank to which they were wired. The account holder has stated that these funds are from a source unknown to him.

In the verified answer by Supervalu Inc. to the court, Supervalu confirms the transfers, BUT denies knowledge or information as the allegations. Supervalu admits the truth in the allegation in Paragraph #2 of the Plaintiff’s Verified Complaint “in REM” to the extent that it is believed that the property identified originated from wire transfers that Supervalu was INDUCED into making under false pretenses. (“In REM” describes the jurisdiction the court may exercise o0ver property. Jurisdiction “in rem” assumes the property or status is the primary object of the action, rather tan personal liabilities not necessarily associated with the property.) Supervalu denies the allegations in Paragraphs 3, 4 and 5 of the plaintiff’s complaint. Supervalu also denied paragraphs 6 and 7 of the verified Complaint.

Supervalu confirms that it contacted the FBI upon discovering that it had been induced under false pretenses into making wire transfers to an account not properly entitled to receive said funds.

The funds were transferred into an account owned and controlled by “Society Nights Productions, Inc.” of Silver Spring, Florida. The registered agent and named officer of this company is identified as William R. Carney lll, of Silver Springs, Fl. The company originated in 2005 is active and registered as doing business with the state of Florida under filing P05000141279.

So what’s going on here? Why the FBI? Where’s the money going too?

If you have the answer let us know!!!

Tell us what you think!!

IOS / Balsiger et. al Civil Action

INTERNATIONAL OUTSOURCING SERVICES, THOMAS C. BALSIGER, BRUCE A FURR, STEVEN A FURR, LANCE A FURR, WILLIAM L.BABLER; OVIODIO H. ENRIQUEZ, DAVID J. HOWARD, JAMES C. CURRY and HOWARD R. MCKAY

DEFENDANTS

U.S. CIVIL ACTION – EASTERN DISTRICT of WISCONSIN

PLAINTIFFS:

BEIEDORF, INC., BRISTOL-MEYERS, SQUIBB COMPANY, COMMONWEALTH BRANDS INC., ENERGIZER BATTERY INC., GENERAL MILLS INC. GEORGIA PACIFIC CONSUMER PRODUCTS, LP, DIXIE CONSUMER PRODUCTS LLC, HORMEL FOODS CORPORATION, THE J.M SMUCKER COMPANY, JOHNSON & JOHNSON, KELLOGG COMPANY, KIMBERLY CLARK GLOBAL SALES INC., KRAFT FOOD GLOBAL INC., LAND O LAKES, INC., LORRILARD TOBACCO COMPANY, MCCORMICK & COMPANY, INC., NESTLE USA, INC., NESTLE PURINA PETCARE COMPANY, PEPSICO INC., THE PROCTOR & GAMBLE DISTRIBUTING LLC, S.C.JOHNSON & SONS, INC., CONOPCO, INC. D/B/A UNILEVER.

On October 4, 2007 the plaintiffs filed a 29 page Civil Complaint action against the defendants for violations of the Racketeer Influenced and Corrupt Organizations Act, 18 USC sec. 1961 et seq (RICO) as well as Common Law Fraud, Failure to Disclose and Unjust Enrichment.

The complaint details the Defendants scheme. It complains that IOS is the largest coupon clearinghouse for retailers. IOS and its predecessors have been in business since 1961.IOS has processed hundreds or millions of coupons annually and on behalf of major retailers.
The complaint further states that “although the defendants scheme was multi-faceted, at its most fundamental level it involved simple augmenting the substantial volumes of properly redeemed coupons that IOS received from certain of its major retailer clients with other coupons that IOS acquired and then fraudulently submitting the entire batch as if all of the coupons had been redeemed legitimately by consumers at the designated retailer.”

“Through this scheme the defendants induced manufacturers, including Plaintiffs to pay hundreds of millions of dollars pursuant to invoices that the defendants knew were fraudulent.”

The defendants were civil charged with;
Count 1 – Federal Racketeer Influenced and Corrupt Organizations Act, , Title 18 USC - 1962 (all Defendants)
Count ll – Federal Racketeer Influence And Corrupt Organizations Act – Title 18 –USC – 1962d (all defendants)
Count lll – Common Law Fraud ( Defendants IOS and Balsiger)
Count lV – Common Law Conspiracy to Defraud ( All Defendants)
Count V – Common Law Unjust Enrichment ( All Defendants)
Specific details of each act and the details of the scheme and various defendants’ roles and non-defendants role in this scheme can be found in our link to this site.

The IOS saga continues…

This is a Civil Action, while the Criminal Action is Pending…
All Defendants are presumed innocent. The claims and actions by the Plaintiffs is an effort to recover hundreds of millions (estimated at $150,000,000) in assets from the defendants.

Tell Us What You Think !!!

IOS - COURT RECORD UPDATE 9/26/07

IOS
COURT PROCEEDINGS UPDATE


www.CrimeTalkAmerica.com has been receiving numerous inquiries about the current status of the IOS court action.
Our research finds that a question of VENUE authority has been raised by Thomas Balsiger et al, with regard to the jurisdiction of the Wisconsin U.S. Attorney’s Office. Arguments in writing on both sides of the issue have been presented to Judge Patricia J. Gorence. A review of the issues is being considered.

Judge Gorence set the following schedule;

Jan. 15, 2008 – to submit defendants privileged logs and
governments position
Feb. 15, 2008 – defendants responses
Feb. 29, 2008 – government’s reply
April 15, 2008 – court sets scheduling conference

For those who are familiar with the International Outsourcing Service matter, IOS has been removed as a defendant in this matter and as a corporation is cooperating with the government. The parties, or individual’s, former executives, and contractors or employees are remaining defendants.

www.Crimetalkamerica.com will strive to keep you informed of any additional data that we deem important and necessary.

Please continue to ask questions or make comments to be posted on our blog.

TERROR ALERT - GROCERY STORE SCAMS

TERROR WATCH

GROCERY OPERATIONS ACROSS AMERICA

BABY-FORMULA SCAM –
CONTINUING MIDDLE-EAST STOREOWNER FRAUD


In the Eastern District of New York, federal charges were unsealed against Ibriham Qunbar and Salah Nabban, owners of Palco Trading LLC of Brooklyn New York. The United States Attorney charged the individuals in a scheme to defraud the Internal Revenue Service, “to attempt to evade and defeat substantial income tax due and owing to the United States of America.” It’s alleged that they filed false and fraudulent income tax returns, filed for an S Corporation, defraud the United States for “impeding, impairing, obstructing and defeating the lawful functions of the Internal Revenue Service”.

These tax charges stem from a scheme by the two defendants in a scam involving stolen and expired baby formula. It’s alleged that Qunbar and Nabban through their company Palco Trading, LLC turned black-market infant formula into profits that they never reported to the IRS.

This scam has been an ongoing method of Middle Eastern Grocery Store Owners over the past 20 years. The sale of adulterated baby formula in the South West and the Mid-West was ongoing during the late 1980’s and early 1990’s by organized criminal Middle-Eastern enterprises affiliated with terror cell operations within the United States.

In this matter, Qunbar and Nabban owned a business that supplied grocery products by distribution to numerous grocery outlets. Palco Trading LLC is located at 791 Rogers Ave. Brooklyn, New York. This address has a history as being associated with Arab Mini-Marts during the late 1980’s and early 1990’s which was identified as “M & M Supermarket” then listed as affiliated and associated with Radwan Ayoub, the “Coupon King” of the 1980’s and 1990’s who helped finance the first bombing of the World Trade Center 1993, through more than $100 million dollars in coupon fraud in the New York Metropolitan area. It was Ayoub’s scheme that financed the World Trade center bombers, all whom have been convicted of the attack on the World Trade Center, and are serving more than 200 years in Federal Prison for their criminal attack.

Qunbar and Nabban are accused of buying baby formula for between $6000 and $16000 a batch, and then through Palco Trading distributed goods to grocery chains like Key Food and Associated Supermarkets. After securing the formula at under market prices, Qunbar and Nabban would contact the two manufacturers Ross and Mead Johnson a subsidiary of Bristol Meyers Squibb it’s alleged that they would seek refunds at full price.


At times they would buy stolen non-expired formula and sell it to groceries. It’s also alleged that at times they would create fake invoices to show that they purchased the formula at full-price from the corporations to receive the refunds, profits they never reported to the IRS.

It’s reported that they sold the store in 2003 for $1.6 million, two years before Qunbar was found guilty by jury trial for falsely reporting to federal officers at JFK Airport in New York City that he and his wife were bringing $12,000 in cash with them before a trip to Jordan. He actually had $22,687.

Is this an ongoing scheme by middle-eastern grocery store owners to defraud the manufacturers or is it a method of support of terror operations within the United States. Not to say the Qunbar or Nabban are affiliated with terror cell operations within the United States, it seems that the familiar behavior, the links to the storefront operations identified as a financial supporter of the 1993 World Trade Center bombing, and the use of Enfamil Baby Formula as a product to defraud the manufacturers and the IRS follows a pattern of years identified as affiliated with PLO operations, Hezbollah Terror financing, and Abu Nidal Terror operations in the Mid West.

Is this a coincidence or is it a method of business by middle–eastern businessmen to defraud, destabilize and impact American corporations.
E-MAIL US YOUR OPINION..

IOS / A QUESTION OF SLIGHT OF HAND / AN INSIDE LOOK AT THE COUPON FRAUD FROM THE FEDERAL POINT OF VIEW AND OURS

INTERNATIONAL OUTSOURCING SERVICES

A QUESTION OF SLIGHT-OF-HAND
Or
MISDIRECTION

AN INSIDE LOOK AT THE IOS FRAUD

On June 28, 2007 FBI Special Agent, Stephen P. Vitale presented an affidavit to the United States District Court, Eastern District of Wisconsin which details numerous issues relating to the IOS fraud and the actions of Bruce Furr, Lance Furr and Steven Furr. Special Agent Vitale is the lead case agent in the IOS matter, with assignment to investigate U.S. violations of mail and wire fraud.

His affidavit details the efforts of the law firm of Greenberg Traurig a defense on behalf of IOS and its principles that the business practice of “store tag defense”, is a business practice and method used by IOS and its predecessor corporation International Data Inc. They practiced “store tag” methods in accounting for coupon redemption for small independent owned grocery stores by submitting consumer coupons for redemption to International Data, (IOS) coupon redemption processing coupling them with large grocery chain coupon submissions.

The affidavit explains the practice that was submitted by the defense attorneys for Furr’s that “store tag defense” appeared to be nothing more than an accounting practice. In an explanation of the “store tag defense”, IOS would bundle the submitted coupons from small grocery stores with large submissions from such corporate clients as Pathmark, Winn Dixie etc. As the practice of coupling the submissions to manufacturers for payment under the mask of Pathmark (as an example) the submission may have been in the amount of $1 million dollars for payment to IOS by the manufacturers and its representatives. Research finds that the average monthly submission by Pathmark often does not exceed $400,000 of consumer coupons submissions. Pathmark was not involved; Winn-Dixie had no knowledge of these excessive submissions. Only IOS, Lance Furr and others within IOS not only knew but also participated.

The defense presented by Furr’s attorneys (remember IOS was released from criminal liability in a cooperation agreement), met with the U.S. attorney’s office in Milwaukee, asserting that “since IOS invoiced coupons a certain way, the company had in fact committed no fraud.” The defense strategy asserted that although coupons from small stores were sent along with coupons from larger stores on the same IOS invoice (listing only the larger stores) it was done only as a matter of convenience. The coupons were processed at the same location and efficiency and even saving toner was the logic. The defense poised that although the coupons were shipped together, no one could have been defrauded because each packet of coupons contained a “store tag” that accurately listed the store at which they purportedly had been redeemed.

S/A Vitale investigation into this defense lasted for several weeks. The government learned from a combination of multiple witnesses and physical evidence that this defense was FALSE. Indeed it was fabricated by IOS perhaps more than a year earlier with the intent that its attorneys pass the falsehood on to the government in a bid to prevent the government from going forward with its indictment for coupon fraudulent invoicing practices. The invoicing “example” also was revealed as a fraudulent document that had been prepared for members of the joint defense group during a plant tour in March 2006.

Between February and April 2007 in the context of litigation in the grand jury matter in Case No. 07-Misc-26, IOS lawyers from the Scott Hulse law firm, assisted by Greenberg Traurig, cited the “store-tag defense” as their key argument against application of the crime-fraud exception to certain subpoenaed documents. Counsel’s reliance on this defense was withdrawn after the United States presented IOS’s lawyers and the Court with evidence indicating that the defense was a sham.

S/A Vitale explained that in April 2007 during an interview with a Greenberg Trauig attorney, the attorney had concluded that the “store tag” defense likely rested on false factual information.

The investigation has revealed that each of the Furr defendants would have known that the “store tag” defense was false. Multiple witnesses have described the Furrs’ participation in the alleged diversion scheme. Lance Furr had admitted the diversion and the reasons for it to an IOS auditor. Exhibits A & B (encompassing Lance Furr’s description of IOS’s “deuce strategy” and further indicating that in 2000 alone, over $49,000,000 in small store coupons had been billed out under the name larger retailers such as Pathmark. Likewise in late 2005 Bruce Furr admitted that IOS had billed out small-store coupons as if they had been redeemed at large stores, claiming this had been a “bad business decision” but not illegal. Similarly, a cooperating defendant has reported that in early 2007, Steve Furr had a conversation with him specifically addressing the January 10, 2007 presentation of the false “store tag” defense to the government.

In June 2005, S/A Vitale reports that Pathmark, one of IOS’s largest clients, expressed concern that IOS may be using Pathmark’s name when billing out coupons purportedly redeemed at small stores. Steve Furr wrote Pathmark the (1) only Pathmark coupons are invoiced under Pathmark’s name, (2) all small store coupons were invoiced under specific well-recognized small store designation and (3) small store coupons were processed at a location 500 miles apart from where IOS processed coupons redeemed at large stores like Pathmark.

This is inconsistent with the “store-tag” defense presented in the claim that the coupons were processed in the same place and included on a single invoice to reduce costs.

S/A Vitale continues to describe IOS’s position and efforts to obstruct justice by intimidation of witnesses, employees and using financial threats and holding back payments to resigned employees as a method to have the employee agree to sign an agreement to remain silent to the FBI and then the money would be released. Agreements were drawn up by attorneys of Greenberg Trauig in these matters on behalf of IOS. (See affidavit for further details).

RAPID PAY PROGRAMS

International Data 12/31/00 Memo of “Rapid Pay Program”
“Rapid Pay” type programs are for Mom & Pop type grocery stores which need coupons processed. These are funded programs with average terms of 14 days from receipt of the coupons. There are three general types of programs”;



DEPOSITS

These programs usually require a deposit before payments are remitted to the retailers. The purpose of the deposits is to cover International Data (International Outsourcing Services) exposure on manufacturer chargeback’s generated from coupon shipments. Manufacturers payment denials often are the based on coupon expiration, foreign coupons (coupons sent to wrong manufacturer), not able to substantiate purchase volumes, not having the proper forms on file show that the customer even exists. The chance for fraudulent coupons in the small grocery stores is greatly higher than the large funded programs.

Normally deposits are not paid directly by the retailer, but rather most of the time deposits represent retailer payments for coupons received from the manufacturer that are held by the clearinghouse ( basically the first few coupon shipments are run through the system and payments to the retailer is withheld as a deposit until a deposit threshold is met. Once the initial deposit levels are reached and retailer payments start. The deposit levels continue to be monitored and compared against chargeback’s generated to cover clearinghouse exposure.

To mitigate the higher chargeback rates, International Outsourcing (ID) has invoiced RP coupons under other big funded programs that have lower chargeback rates. ID is a major player in the Rapid Pay type program. With the purchase of UCCH (Coupon Express) and NCRS programs, they have solidified their market share. Since these purchases, ID has kept the names in tact and has not advertised that they purchased these companies. Therefore, the smaller retailers don’t have a clue that all of the programs are the same company ID. This creates a problem for ID in that store owners jump from clearing house programs to other programs. ID has had trouble merging the information to transfer the data on chargeback’s from the stores to the new accounts within the ID operation. To do so, they transferred the information data gathering to their operating in El Paso to move the chargeback’s and deposits to the store with most current shipments. ID is still trying to complete the store merger program.

The purpose of Rapid Pay is to reduce the chargeback’s from the manufacturers and get a higher collection percentage from the manufacturer for the Rapid Pay customers. This reduces ID’s chargeback’s receivables.

One can question the issue of fraudulent submissions to the manufacturers by ID to increase levels of payment from the manufacturers and reduction of chargeback’s by coupling the Rapid Pay program with the larger more stable chain grocery stores.

NCRS – National
B&M
Rapid Pay includes Coupon Express, Priority and Rapid Pay.
(See Memo dated 12/31/00)

International Data memo dated 12/31/00
“Deuce Memo and Analysis”

The “Deuce” strategy – (a) all coupons are received through Rapid Pay – The retailers are paid through Rapid Pay for all coupons received.

“Some Rapid Pay coupons are still invoiced to the manufacturers through the Rapid Pay program.

Deuce coupons are invoiced to the manufacturers through the 5 programs mentioned using specific invoice ranges (8000-9000). The range is distinctive from the programs normal invoice range to make them easily identifiable.

The invoicing is loaded onto the A/R system in the respective program that it was invoiced under.

Manufacturers pay the program and the cash is applied on the A/R in each program that it was invoiced under.

The shortfall in the Rapid Pay program between total Rapid Pay audited receipts paid to the retailer compared to the amounts received from the manufacturer for Rapid Pay invoices shows up as a negative inventory gain.

The surplus in the other five programs between the audited receipts paid to the retailer compared to the regular program invoice and deuce program invoice manufacturer receipts shows as additional inventory gain for the programs.

The end result is a lower rate of deductions from the manufacturer since they do not see Rapid Pay as the invoicing entity.

It is understood that the large grocery chains, Pathmark, Winn-Dixie, and others similar to the large grocery chains have an approximate 14% coupon rejection rate from the manufacturers, while its known in the redemption business that the Mom-Pop grocery stores, small independent stores experiences nearly a 60% return rate.

This explains why IOS and other redemption centers concentrate on the larger legitimate grocery chains. Past experiences shows that coupon fraud by organized coupon redemption rings, terrorist groups and criminal enterprises submit bulk coupons to redemption houses which submit to the centralized clearing house like NCH- NuWorld who represents manufacturers redemption programs.

It is alleged that IOS and its predecessor International Data (ID) used a method of deception, fraud and intimidation to protect its interests. Where is Nu-World in its role between the manufacturers and the coupon redemption processing houses?

Where is Supervalu is the scheme of things? They are a 25% share holder in IOS; two Supervalu executives are on the Board of IOS. Supervalu owns NAFTA, while NAFTA has a business relationship, partial ownership of IOS.

Which Supervalu stores were submitting coupons to IOS? Were they in the Rapid Pay program or the Deuces program?

Where did the money from the difference in the submissions of “Mom/Pop” stores submitted under the banner of Pathmark find its resting home? Whose pockets were lined with the excess cash collected from the coupon submissions of the bulk co-mingled manufacturers payments?

We’ve seen over the past 20 years organized groups, some associated with international terrorism, others funding terror activities, and more directly a New York operation that helped finance the 1993 Bombing of the World Trade Center, killing six and injuring more than 1000, all using coupon redemption from listed Mom/Pop grocery stores.
Without the proper verification by such systems as “Rapid Pay” and the co-mingled submissions of coupons to manufacturers questions the intent of IOS and its former ID behavior as a means of greed, while inadvertently assisting the financing of terror operations within the United States.

Such programs fuel fraud, diversion and criminal behavior by individuals and corporations. In the IOS matter, the original offenders all Middle Eastern grocery store owners or registered coupon brokers obtained payment from IOS and transferred funds to Ramallah, Palestine. Where did this money go? Too whom? What for? We need answers!

Let us know what you think!!!
This is a look inside the IOS Fraud. While the company has been released from criminal liability, the principles of IOS, officers, specific employees and others are awaiting criminal prosecution, therefore they are innocent until found guilty. This report is an explanation of the details of a portion of the fraud presented to the United States Court in response to criminal proceedings.

SEE AFFIDAVIT

Comments Accepted:

MAIL ROOM SECURITY / BIO ATTACKS / A SOLUTION IS HERE

BIO-CHEMICAL BUSINESS ATTACKS

$12.1 million TO OPEN NEW OFFICES –
.41 cent STAMP TO SHUT THEM DOWN

Corporate offices, schools, industry, manufacturing plants, governmental offices, the offices of former President William Jefferson Clinton and even Presidential Candidate John Edwards have all fallen victim to “WHITE POWDER” mail threats, hoaxes and attacks. These are not random acts of violence, but rather a selected controlled attack on the institution, corporation or person.

www.CrimeTalkAmerica.com reports our investigation to enlighten the reader, educate the corporate executive and explore our F3IR newest product to protect your business and life. While I try to make sure that Crime Talk America is independent of our consulting business, I find it EXTREMELY IMPORTANT that you the business reader, the crime talk reader and corporations within America and others from around the world that visit our site consider prevention and protection mode which is essential and NOW available.

Just after the 9/11/2001 attack on America, several news agencies, politicians, businesses and governmental agencies fell victim to an onslaught of U.S. Mail envelopes delivered that contained white powder substances. Most were false or hoax mailings. Some were not. We will never know how many of these attacks were real, but it really doesn’t matter, its VERY DISRUPTIVE to business and the individuals involved.

Let’s consider the American Media offices in Boca Raton, Florida. This world famous news agency fell victim to an anthrax attack that took the life of Robert Stevens, a photo editor with the Sun. He took ill after approximately five days. Examination by doctors at John F. Kennedy Hospital determined that he had contracted ANTHRAX. The CDC confirmed that it was anthrax. Mr,. Steven died on October 5, 2001, just a few days after becoming ill.

Upon specific tests of American Media employees, it was determined that two others tested positive. All employees of American Media were tested. The results were positive for five other employees. Those identified as having contracted anthrax exposure were hospitalized and treated and recovered.

The Florida Department of Health announces that it had discovered minuscule amounts of Anthrax spores were found in the Boca Raton Post Office. During the same period, Anthrax was sent to NBC television in New York. It was determined that this was the same as the Boca Raton anthrax.

The American Media building was closed, sealed off and guarded from any public visitors or employees. CDC members and FBI investigators explored the building wearing protective hazardous material suits.

Three years after the closing of the American Media building, the building received approval for cleaning. It took several more years to declare the building as a safe environment. It was just a .37 cent U.S. Postal Stamp that shut down a billion dollar empire.

In 2006, five years after the 9/11 attack and the Anthrax attack on American Media, NBC, Congressmen and governmental buildings, former President William Jefferson Clinton’s offices located in the heart of Harlem, New York received an envelope filled with white powder. This caused two floors of the building to be shut down. Most of the building was evacuated by New York Police but eleven people were quarantined as the police, FBI, Secret Service, Fire Department and Homeland Security responded to the building. It turned out that the white powder was not toxic, and was harmless but another disruption to businesses and people.

Anthrax hoaxes and attacks are worldwide. More than 750 such incidents have been reported around the world in 2001 and continue today. ABC News offices were victimized, Senate offices were attacked, and abortion clinics also receive these letters. More than 17 people came down with symptoms of anthrax attack around the world.

These attacks whether a Hoax or Real are ongoing today and are used to terrorize business and individuals more than ever.

While some would argue that many of the envelopes were a HOAX, its still extremely disruptive to business and law enforcement. It takes time away from business operations, creates fear by employees and can shut down a billion dollar business in a matter of seconds.

We at www.CrimeTalkAmerica.com have discovered the only actual solution to cleaning incoming mail to businesses and governmental agencies. F3International Resources, our Consulting Group, has reached an agreement to represent the Bio Chemical Cleaner to our corporate and government clients.

I decided after receiving several inquiries from our readers on how to help protect their businesses, to offer this information. It is extremely important so I decided to present this great new protective counter chemical attack measure to protect your business, offices and government agencies from that .43 cent postal stamp attack,.

Visit our www.F3IR.com website, Products section for details. It’s a great protective resource.

IOS Coupon Fraud Federal Case / POSSIBLE ADDITIONAL INDICTMENTS TO COME!!!

BREAKING NEWS

IOS FEDERAL CASE
POSSIBLE ADDITIONAL INDICTMENTS TO COME!!!

On June 14, 2007 the U.S. Justice Department summarized their case in the matter of United States v. Balsiger, et al, Case # 07-Cr-57, which details the ongoing follow-up investigation and the volume of documents being examined by FBI agents and U.S. Attorney’s Office.

The summary letter details the granting of the governments motion to dismiss the indictment against International Outsourcing Services. They report that the agreement, “as part of an Agreement for full cooperation by the corporation, including full government access to all IOS files.”

As part of the agreement, IOS secured promises from its attorneys including law firms of Scott Hulse, Matrshall, Feuille Finger & Thurmond,P.C., of El Paso, ?Greenberg Trauig LLP of Chicago and Mallor Clendening Grodner & Bohrer, LLP of Bloomington, In. to make their case and coupon related files available to the government for review.
A question on “Privileged Communication” and probable privileged litigation may exist.

The U.S. Attorney asserts that “the ongoing investigation has shown that at least some attorneys for IOS were used, perhaps unwittingly in most of all cases, to pass along false information to the government in an attempt to obstruct justice.” The U.S. Attorney further suggests that “some attorneys were also deployed to harass one or more government witnesses for the same purpose.”

The U. S Attorney also suggests that “still other witnesses were subject to coaching before they were interviewed in the government’s investigation.”

An ongoing investigation seeks to determine precisely which individuals were responsible for this apparent additional criminal conduct. The U.S, Attorney went on to suggest that “when that is determined, we expect to seek superseding indictments.”

The documents of the law firms are “highly relevant” to the inquiry into possible obstruction. The need for the U.S, Attorney’s office to seek further information will; require a court approval that the information they seek is not privileged attorney client documents. A future hearing will settle this question,

SEE the U.S. attorney case summary letter to Magistrate Judge Patricia J. Gorence, dated June 14, 2007.

( CLICK HERE TO SEE LETTER )

Comments????

PRODUCT DIVERSION .. MAUFACTURERS BIGGEST HURDLE EXPLAINED

PRODUCT DIVERSION

As requested by our readers!


At the request of many of our readers in the Johnson vs. Supervalu litigation report, they requested more information about DIVERSION and how it effects business operations. The following details a variety of methods which impacts all industries and a “Case of Diversion”.

“DIVERSION” of manufactured products, whether pharmaceutical, grocery goods or even sneakers finds corporate entities struggling within their own organizations to deal with the penetration of the production grid. Product diversion not only impacts the corporate bottom line, but seriously damages the credibility of the product identity, leaving the corporation with the potential for liability exposure, alteration and adulteration of products and its impact on the reputation of the manufacturer.

Diverted products are guided through a maze of planned manipulations, alteration of business records, and conversion of transportation from its original destination to another recipient or illicit market distribution network.

Product diversion simply starts from within the manufacturers facilities. Depending on the point line in the system, the products at any given point, from manufacturer, on the product assembly line, shipping and packaging, trucking and transport or even labeling, packaging and or the creation of false shipping label documents are all points of weakness within the corporate system. Distribution weakness points in the system chain, affords the diverters an opportunity to short the manufacturer of product, financial benefit and reputation.

What are the causes of Diversion?
Often companies maintain an internal policy that creates diverse geographical pricing and compensation programs. This contributes and triggers a diversion plan from a network of organized marketers, within or external from the corporation.

Protecting the company to reduce the level of diversion requires a need to mark the product. It also requires the company to track the product, integrate information including; production. packaging, shipping, transportation and receipt, of the products identity, computerized audit code, and even now RFD (Radio Frequency Device) marking the product from the start of the production to the finished authorized destination, protects the product in the distribution network.

With the creation of GPS tracking of containers, even individual products, creates an added expense, but will reduce diversion, or trigger information that the product has not reached its destination. Depending on the value and impact to the business, GPS tracking must be accompanied with internal controls and system wide audits.

Diversion’s impact on the business often leads to erosion of brand name, inadequate inventory levels in targeted market area, and lower revenues from high paid discounts, and higher cost of distribution due to slow sales. This has a greater impact on the financial growth of a company than counterfeited products. Supply chain partners and distributors exclusive territory rights are diluted, costs increase, brand value is eroded and profitability of all channel partners are affected.

Product diverter’s, third party marketers undercuts the company’s price of goods while reaping high profits. Diversion often referred to as “Grey Market Goods” or “parallel distributors” greatly disrupts the distribution channel of the legitimate business operations. Products that are diverted are often the result of deception and fraud. Discount, and warehouse retailer, supermarket chains, independent grocery stores and at times drug stores become the retailing marketplace for the diverted product. This impacts the legitimate distribution network, manufacturers, distributors, retailers and the consumer.

The international distribution network based on tax incentives, different pricing and new market distribution outside the United States aids in creating the diversion network. Because of these tax incentives, variable product pricing affords the diverters the opportunity to move products from its international destination and convert the product into the American marketplace at what appears to be a greatly discounted pricing from the legitimate distribution chain in America.

Hence, DIVERSION of goods from the directed international marketplace to the American retailer impacts the costs and value of the manufacturer.

In the Cigarette industry, product destined for the international market often finds their way into communities that are considered border communities. While the pack of cigarettes is marked for international sales only, they can be purchased in such cities as Miami, Arizona and Texas border towns. While legitimate business partners of the companies complain about the product availability, the goods are being diverted from the legitimate shipments to the American market.
They were sent with certain discount prices, have limited state tax restrictions and are sold on the open market through a chain of retailers with little disruption.

In the Medical Supply industry, price and volume incentives cause a dramatically lower price in the volume purchasing from distributors in different regions of the world. Thus allowing the distributors to take orders from “local trading companies”, which are then transferred to a shipping company with the manufacturer thinking the local industry is growing. However the shipping company is now sending the product to destinations where distribution prices are much higher. The Diversion of such goods creates a massive “Gray Market” for the parallel distribution line who can provide these products to stores or even manufacturers distributors at a lower price than the manufacturer would offer in that territory
Today, the pharmaceutical industry is exposed to “Parallel Importing” often seen as grey market importing is unauthorized, but not necessarily criminal, importation of patented drugs for resale via conventional distribution channels. Sourcing drugs for a free market economy from the United States to a country of price point fixed products below that found in the United States has legitimate incentives. In parallel importing cases, it robs the patent holders of legitimate profits and thus limits the incentive for pharmaceutical companies to invest in developing new drug solutions.

It is well known that pharmaceutical products purchased for third world nations at a tax free discount from United States to aid foreign markets, is purchased at discounted pricing, then converted into parallel goods for redistribution in foreign countries that were not scheduled to receive the reduced pricing of the drugs. The middle-men are receiving discounts, increase product levels at no cost, sample products and off-market goods for specific countries. In turn, the middle-men of the distribution network, sell off the reduced priced goods at an inflated price, yet under the cost prices of the United States marketplace.

Supervalu/ Johnson Diversion Program:

In the Johnson v. Supervalu litigation, in which Johnson won a $16 million dollar judgment against Supervalu, it was disclosed and alleged that Supervalu and Johnson participated in product diversion from manufacturers, causing Johnson’s grocery stores to be shorted of products, and not benefiting from the product rebates offered by the manufacturers.

In the complaint by Johnson in this matter Section 3. “Fraudulent Diverting Transactions, is detailed in the following;
“62. Diverting in its purest form is a process by which a person who can obtain a product at a discounted price resells that product to another who is not able to obtain a discounted price.”
“65. Nerveless, Johnson alleges that Richford has an entire department dedicated to diverting. Johnson also alleges that Richfood has a warehouse used for unpacking cases, removing stingers, and repacking products for resale.”

As a result of the diversion scheme, Johnson alleges that it cost his corporation more than 102,000 in billbacks that he could not claim with the manufacturers, since the products were diverted and never received by Johnson’s stores. Johnson admits that his company “participated fully”, but was unaware there was no product movement in the illegal Richfood scheme. Johnson’s company MPH’s diverting losses resulted from 35 product deals for which it was not able to obtain product movement data from Richfood to support billback invoices to manufacturers.

The world of diversion has become computer based, on-line and extremely sophisticated. Trails of today’s diversion may be very well hidden in the depth of computer generated information systems.


Supply chain professionals need to be in the front lines in the battle against diversion of manufactured goods. Manufacturers need to take charge of there supply chain to insure the integrity of the production line, the transportation and the end distributor or retailer has received the products that they sell to keep the market going. Any hiccup, hesitation, disruption or pattern of diversion should be immediately addressed, not just as a misstep, but rather as a scheme to defraud the manufacturer, its shareholders and the consumer public.

CASE STUDY WITH A POSITIVE END:

Some time ago a manufacturer of a “NEW” hygiene product, a depilatory hand-held shaver, made in Israel, was being manufactured in China and distributed around the world. The corporate owners wanted to enter the U.S. market and had been planning a major introductory advertising campaign. It was discovered, a surprise to the manufacturer that their product was already in the United States and being advertised in circulars of two of the largest retail chains in America. How did this happen?

Our investigation (Ben Jacobson) identified the marketing agent within the United States, his business name, a legitimate authorized business enterprise. He was sitting on two containers of the product that had been DIVERTED from a European shipment to a Trans-Atlantic cargo shipment into the U.S. The marketer had a distribution chain of major retailers whom he had done business with for years. He was not the originator of the diversion, just a cog in the wheel of the diversion chain, the recipient and distributor. His associates were associated with the manufacturer in Israel and China had developed access from the manufacturing plant. They knew that the product was not yet available in the United States, but the company had a marketing plan, and an advertising explosion about to be put into place. The manufacturers had spent millions in development and creating the American market buzz, but had been beaten to the distribution point by diverters. This was a very sophisticated diversion operation. The product did not have government restrictions, or was required to pass other than normal customs inspections. Like many shipping containers entering into the United States, less than 3 of ten containers are inspected. In this case, the containers would have not raised any issues.

The result of our investigation found the manufacturers with a dilemma, a decision of litigation or distribution. They had a product that was receiving tremendous positive reaction from the consuming public. The retailers had been marketing the product nationally with an advertising campaign and introductory offers.

A meeting with the marketing diverter distributor was held. An agreement with the marketer was struck. The decision was to join with the diverters that already had a distribution network in place within the United States. It didn’t make business sense to engage the distributor in litigation, when the business decision decided to join forces with the distributor and reached a distribution agreement after reaching a settlement for the cost of the diverted goods previously sold.

What did this mean to the corporation? As a result of the agreement, the American distributor provided the contacts and resource names of businesses that were part of the diversion. The manufacturer closed the loop-holes by reaching this agreement with its Chinese partner on the accountability of manufacturing, quality control and stopping over-run productions. The business decision brought an end of the diversion of the product and created a product that reached into every retail community within the United States. The loss of millions from the diversion was converted to a profitable distribution point.

This is not to say that rewarding diverters is suggested, but in this case, the corporation made a sound business decision to enter the American marketplace, with an already built distribution network. They got into bed with the diverters. It saved time and money to reach their distribution and sales objectives.

What happens when diversion occurs? All manufacturers suffer from diversion of products. The real question is what percentage of diversion impacts the manufacturers business. Often, diversion has a greater impact on the company than counterfeit products.

Controlling diversion is not a simple task, but rather the constant diligence of the entire process. From beginning of the manufacturing to the destination of the product, audited movement is required. However, in the real world, the human factor impacts the method of diversion and its destination.

You Have the Questions, We Report!!!

We look forward to you comments.

Supervalu, Bad Business, Questionable Diversions, $16 Million Judgment

SUPERVALU

THE JURY SPEAKS
$16 MILLION AGAINST SUPERVALU IN THE JONNY JOHNSON, RICHMOND, VIRGINIA CIVIL SUIT

As we reported last week, Jonathan Johnson, an African American businessman from Richmond Virginia, took on the behemoth Supervalu in a Civil Action seeking damages for breach of contract.

For approximately 12 years Johnson’s grocery business had entered into a business relationship with Richfood, Inc and Supervalu. Supervalu and Richfood extended credit, provided warehousing services, accounting and other services typical in the grocery business.

The agreements between the parties fell apart when it was discovered by Johnson that after reaching a contract “obligation to provide assistance.. With opportunities to grow” the business.

Johnson discovered that his companies were being subject to questionable business practices, such as being shorted on product deliveries, failing to receive timely credits and rebates and improper charges. Johnson also discovered that Supervalu, without his knowledge, was in discussions with his store landlord to secure sites for Supervalu’s “Save-A-Lot” chain of retail stores, a competitor to Johnson’s business.

Johnson had also discovered through inquiries with manufacturers, that without his knowledge his companies unknowingly had been involved in a series of transactions by which Supervalu/Richfood allegedly collected manufacturers rebates on products, but not actually purchased by Supervalu/Richfood through Johnson’s company stores.

These fraudulent DIVERTING transactions benefited Supervalu/Richfood financially, while siphoning substantial revenues from Johnson’s companies.

The four man - three woman jury awarded Johnson a $16 million judgment, a decision upholding the numerous allegations that the nation’s third largest grocery chain, Supervalu, forced him out of business.

Lawyers for Supervalu immediately told Judge Margaret P. Spencer that they will appeal the decision and renew motions to throw out Johnson’s evidence in the case.

Johnson and his legal team argued that Supervalu defrauded Johnson by singling him out as a troublemaker, while it had extended high-interest loans and supplied contracts worth millions.

Johnson stores went out of business in April 2004 ending a 15 year business operation in an inner-city community in the State of Virginia.

As we had reported earlier, Johnson witness Susan Rhyberg, a former technical employee for Supervalu had testified for Johnson. Supervalu Senior executives took the witness stand claiming that Rhydberg was not in meetings or even known. As rebuttal, Rhyberg returned to the witness stand this past week and provided testimony, e-mails and other information showing her employ and participation in the Supervalu business meetings disputed.

Was this a typical “BUST-OUT” takeover of a business by Supervalu, or was Johnson just a victim of aggressive business practices by the behemoth food giant.

Like the scene in the movie “Goodfellas”, the bar owner goes to the boss and asks for him to take the goons off his back. He agrees, and then takes over the business, keeping it afloat, using the bars contacts and credit with suppliers, then upon delivery moving the products out the back door, selling to other stores for cash. No payments made by the bar to the suppliers, then the bar is closed. No credit, no suppliers, no business. The next scene is the torching of the bar.

In this scenario, Johnson’s business was forced to close as the result of Supervalu’s business practices, high interest loans, rebate diversions and product diversion. So after 15 years of business Johnson lost it all. Supervalu entered into the community and began new grocery markets in the region.

What a take over!!!

Congratulations to Jonny Johnson for his taking on the goliath Supervalu. Like “David” beating the giant by the small guy is not only a win for Johnson, but a win for the community he served for so many years.

What do you think? Is a Pattern Developing in the Coupon and Rebate Industries?

Are our nations Manufacturers bearing the brunt of a deceptive industry?

Have a Comment, send it in...

We Report, You Report...

IOS UPDATE! A Question of Value , Supervalu Litigation , Sounds Familiar

IOS UPDATE

A QUESTION OF VALU

SUPERVALU LITIGATION

Research of the International Outsourcing Services indictments found that Supervalu, one of the nations leading food services company, a publicly traded corporation, rated 153 in the Fortune 500 listings, is a 25% shareholder of IOS.
IOS recently separated from the Criminal Indictment, is not relieved of it’s responsibility of cooperating with the U.S. Attorney’s prosecution of the principles of IOS, namely Thomas Chris Balsiger et al.

A look into Supervalu and its affiliation with IOS finds more than just a shareholder, but a business partner. Supervalu has built a business on development of gobbling-up small community grocery chains over the past several years. Good business, expansion of the bottom line sometimes at the expense of the local community. Lets Take A Look at the case of Jonathan F. Johnson, Richmond, Virginia.

In this matter, Johnson v. Supervalu, Inc. and Richfood, Inc., Circuit Court, Richmond. Virginia, file # L5785-4. Mr. Johnson has filed a $25 Million Dollar claim for compensatory damages and $350,000 in punitive damage claim. This is an ongoing trial.

Mr. Johnson, a 40 something African American businessman is President and CEO of Marketplace Holdings, Inc., The Market, LLC, Community Pride, Inc. and R&S Stores, Inc. in the State of Virginia. All of these businesses are grocery stores operated by Mr. Johnson. He has been in the grocery business for more than 23 years, and has been recognized as a leader and authority in the grocery industry. Particularly to the establishment and operation of retail grocery stores in urban markets and the marketing of consumer products to minority consumers. In 1999 Johnson was considered the owner of the nation’s largest African American owned grocery chain.

For 12 years, it’s claimed in the law suit, that Johnson and his companies purchased grocery products from Richfood and/or Supervalu based on specific agreements between the parties. At times both Richfood and Supervalu extended credit to the “Companies”, as well as warehousing, accounting and other services to the Companies, a common practice in the grocery business.

In 2001 a dispute between the parties arose at which time an agreement was reached between the Companies, Supervalu and Richfood. A settlement agreement was reached and specific obligations were created by the Settlement Agreement. One specific form of the agreement was that the Companies were subject to Supervalu’s “standard screening approval process and standard lending practices” As a result of the multi-year supply agreement, the defendants, Supervalu and Richfood are the “EXCLUSIVE” supplier for the Plaintiff’s retail stores.

Johnson discovered in 2000 that his Companies were being subjected to a variety of questionable business practices, such as being “SHORTED” on product deliveries, failing to receive timely credits and rebates and other improper charges.

Johnson alleges that after inquiries from manufacturers, without his knowledge, the “Companies” had allegedly been involved in a series of transactions by which the defendants, Supervalu and Richfood collected manufacturer’s rebates on products but not actually purchased by the defendants through the “Companies” stores.

Sound familiar! International Outsourcing Services (IOS) business operators have been indicted in a widespread consumer coupon scam that involved manufacturer’s consumer coupons and rebate items. The relationship between IOS and Supervalu is a shareholder relationship, whereas Supervalu owns approximately 25% of the shares of IOS.

A common practice identified that the Johnson matter is a scheme to defraud by a means of diverting product. Johnson’s confirms that his companies joined Richfood in a scheme with a value identified as $1.5 million worth of diverting sales. In most of the cases the Market Place Holdings, Inc. (MPH) would secure a discounted product price in the form of rebates or a reduced price from a vendor or broker purchase extra cases of the discounted products, then sell those cases to another retailer who would pick up the products at MPH stores or the Richfood warehouse.

It’s alleged that Richfood implemented the scheme in a manner that did not involve product movement and left MPH liable for uncollected bill backs. Analysis by MPH through January 2003 its reported in the complaint filed by Mr. Johnson, that a total of $102,946.03 in billback debited from MPH from Richfood and that MPH was not able to collect from manufacturers. MPH’s inability to collect these billbacks arises from Richfood’s inability or unwillingness to provide product movement data showing the products were actually purchased and sold.

MPH admitted that it participated fully, but was unaware there was no product movement in the illegal Richfood scheme. In May 2003, Supervalu became concerned about the decrease in the level of sales at “The Market” and wanted to increase sales in the grocery department. Johnson informed Supervalu that better pricing from Supervalu would improve sales. One month later, its alleged, that Supervalu began giving MPH what was represented as the “GreatValu” pricing on orders for all of his stores.

GreatValu store orders and purchases its groceries independently and the products are delivered to each store by SuperValu. The complaint further reports that SuperValu reports the quality of GreatValu sales “movement” for purposes of obtaining “billback” rebates from manufacturers.

Its alleged that while SuperValu represented that MPH was then receiving GreatrValu pricing, MPH did not. Johnson, MPH’s owner operator, learned from several manufacturers that SuperValu reports MPH “movement” as part of the total GreatValu movements for purposes of obtaining billbacks. SuperValu failed to inform Johnson and MPH of this “movement” reporting practice.

Other similar issues suggested by owner’s of “Shop N Save” grocery stores in Pennsylvania alleges that after agreements with SuperValu, they pulled out of a project that he had committed $4.4. Million dollars in construction. Mark Scozio of Penn Township Pennsylvania filed a federal civil action against SuperValu alleging a “Breach of Contract” and “Negligent Misrepresentation”. He accused SupervValu of misuse of advertising money contributed by the Scozio franchise and damaged the franchise sales with its Greenpoints program, a customer incentive venture that SuperValu started the previous year, 2002. Scozio family and Mark Scozio owned six grocery stores, of which were franchises of SuperValu, under three different Supervalu grocery store names, Shop N Save and Save A Lot.

It’s alleged, SuperValu mingled $1.4 million of Scozio advertising money for the benefits of Foodland retailers, a competitor of Scozio. The tension between Scozio’s and SuperValu heightened when SuperValu added 19 new corporate “Shop N Save” stores in the Pittsburgh area, closing in on Scozio’s limited territory and limiting growth.
The Scozio Group realigned themselves with other markets and left SuperValu that want to control most of their business operations.

It seems that the practice of control by SuperValu is more than an investment into local small grocery chains. Control of the product shipments, financing assistance, partnering between SuperValu and the local or regional grocery stores in the expectation of expansion of the local grocery chain, the shipping of products to the local stores, the rebates that would go to the store operations becomes part of SuperValu financial position, Manufacturers rebates alleged being diverted to other business enterprises of SuperValu, while the small grocery store partner awaits rebate funding and special pricing for selected special products offered as an incentive discount by manufacturers to have grocery stores push their products.

What’s going on here?
Today, June 4, 2007, in Richmond Virginia, Circuit Court the civil suit brought by Mr. Johnson, a local African American businessman who had partnered with SuperValu, heard the testimony of a Senior SuperValu executive. The executive was to counter one of Johnson’s primary witnesses, a former employee of SuperValu, as having no credibility. At the end of the day, Circuit Judge Margaret P. Spencer refused a renewed effort by SuperValu to strike Johnson’s evidence in the case.

Susan Rydberg, the former SuperValu employee who worked in the technology related department, returned to court today for the second time during the trial. Today she presented a letter of commendation from SuperValu Chairmen Jeffrey Noodle for her work. She also presented numerous e-mails that suggested she attended meetings with high-level company executives. The Supervalu executive testified last week that Rydberg was unknown to them and was not part of top-level discussions of the company’s business plans.

It’s apparent that Judge Spencer agreed with Johnson’s attorney and the credibility of Rydberg, by refusing to strike Johnson’s evidence in the case.

What’s going on here? Is this business practices gone wrong, or is it something more that may be corrupt business practices. Only time, documents and witnesses will tell. Perhaps we’ll see a cooperating witness in the IOS Federal Prosecution step up to the plate and bat for the bleachers to free himself of the criminal liability they face in the IOS fraud accusations. Maybe then the schemes will open up to expose those involved in the diverting and rebate programs. This all has an effect on the pricing of groceries on the shelves in every marketplace. Or, is the practice of diverting inventory a legitimate business practice and the manufacturers accept then practice of the rebates so that brand managers reach their goals and those bonuses are given based on productivity.
Who’s looking out for you the consumer?
SuperValu we’re watching this one!
We’ll report on the results when a decision is returned.

Any Opinions, you report, we’ll report.
Send us your comments.

IOS FRAUD COOPERATION AGREEMENT INTERPRETATION / THE IMPACT OF THE SCANDAL

IOS FRAUD
COOPERATION AGREEMENT INTERPRETATION
THE IMPACT OF THE SCANDAL

The IOS (International Outsourcing Services LLC,) fraud has many implications in the world business community. It has been determined that Supervalu, a publicly traded $44 billion corporation, based in Eden Prairie, Minnesota, is the third largest grocery chain, and is a 25%, (one quarter) owner of International Outsourcing Services, LLC.

Michael Horne of www.Milwaukeeworld.com tells us that the 25% ownership by Supervalu puts an “interesting twist” in the May 21, 2007, cooperation agreement by U.S. Attorney Steven M. Biskupic to DROP criminal charges against IOS for its involvement in a $250 million dollar coupon fraud scheme.

This agreement removes IOS from criminal culpability in the wire fraud charges that remain pending against eleven individuals charged in the March coupon fraud scheme. Of the eleven, two individuals own 75% of IOS. As [part of the agreement IOS is required to “installing a new management team and removing the indicted individuals from their roles with the company”. The agreement also; places “all putative distributions to shareholders, including any potential proceeds available for shareholders if the company were ever sold, in escrow pending resolution of the criminal cases.”

This provision was put into place to assure that Bruce Furr, 70, who owns approximately 51% of IOS and Thomas “Chris” Balsiger, 53, who owns 49% in his partnership with Supervalu, do not reap the financial rewards of their conduct, if found guilty. ie: Michael Horne, Milwaukeeworld.com

This leads us to evaluating the Dismissal Agreement against IOS. First, and most importantly; how does it affect the shareholders of Supervalu? It is obvious that the shareholders may not benefit from the profits of IOS, and may in fact have a chilling effect on the value of their shares. If Supervalu is implicated in any form with the coupon fraud, shareholders may suffer. What was the role of Supervalu in the management of IOS? Who sits on the Board of IOS that is an Executive of Supervalu?

We at www.CrimeTalkAmerica.com believe that the agreement by the U.S. attorney’s office took into consideration the fact the IOS business position in the coupon redemption industry can have a tremendous financial impact on the grocery manufacturers and consumers. By allowing IOS to continue operations with new management, keeping the ship afloat, as one would say, is a savvy business decision, not only for IOS, but to the entire coupon and grocery retail industry.

Dismantling IOS would not only impact the thousands of workers of IOS, those that depend on a weekly or monthly paycheck, but it would have an impact on the entire grocery distribution network; advertising, marketing, clearinghouses and possibly even NUWORLD NCH, the leader in the coupon industry. IOS has a majority of the market share in clearing coupons for grocery manufacturer’s, but was insulated by their own national and international business development. It wasn’t until a coupon fraud in New Jersey uncovered by FBI and the U.S. attorney’s office took a look at the excessive coupon submissions from this group of Middle Eastern grocery store owners.

I will say that until the testimony of Ben Jacobson (myself) before the Senate Judiciary Committee Hearings on “Terrorism and Technology” in 1998 exposed the probability connecting terror financing in the United States by Coupon Fraud, the subject of coupon fraud received little attention from law enforcement. Since 9/11 the FBI, Postal Inspectors and other law enforcement agencies now understand the impact that coupon fraud and its relationship to financing terrorism has in the big scheme of things.

The other implication in the Federal Dismissal Agreement with IOS stands at the doorway of legal hypocrisy. Understanding the implications of an indictment of the individuals and a corporation that aided, solicited and agreed to conduct itself in a criminal manner should not release the entity of its criminal liability. IOS books, records, transactions and employees all have a story to tell. It’s a story of greed, financial crimes, and possibly aiding and abetting criminal enterprises, allowing such networks as the New Jersey Coupon Fraud ring to operate with impunity and free reign on American business values. How many more rings will be identified now?

What profits did Supervalu take out of IOS? If IOS is an LLC, the implications are that of individuals, not a corporate entity. Shareholders are not part of an LLC, but rather a corporate entity. LLC ownership is generally a percentage partnership by individuals. An LLC protects individuals from certain corporate tax liabilities, and a protection from personal liability, except when the principles are acting in a criminal manner. While it has not yet been proven in a Criminal Court that all those charged are criminally liable, this would only happen after trial or pleadings of guilty to charges, then we can find that the LLC and it’s partners are all criminally liable.

Keeping IOS operating allows the investigators, FBI, U.S. Attorney and other law enforcement entities the opportunity to review documents, collect information, survey the extent of the fraud and determine if any other entities, like the New Jersey group reaped the rewards of coupon fraud while IOS management looked the other way, while their hands were allegedly in the cookie jar.

_________________

Today, May 23, 2007 IOS announced the anticipated resignation of Bruce Furr as Chairman and of Chris Balsiger as CEO of IOS. Willaim L. Babler, CFO also reigned.

Furr and Balsiger were replaced by Greg Rayburn, CEO, the new CFO is Sean Gumbs of FIT Palladiun Partners of New York. Furr and Balsiger remain the 75% ownership of the company.


Tell us what you think!!!

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IOS FRAUD! BREAKING NEWS ALERT !!! IOS Becomes Cooperating Witness !

BREAKING NEWS ALERT

May 17, 2007

United States of America

Plaintiff
v. Case No. 07-CR-57 (CNC)

INTERNATIONAL OUTSOURCING
SERVICES, LLC.

Defendant

ORDER TO DISMISS THE INDICTMENT (Corporation Only)


On May 17, 2007 IOS has reached a cooperation agreement with the U.S. attorney’s Office.

The federal charges dismissed before the Federal Court, with prejudice.

THIS DOES NOT RELEASE THE INVDIVIDUAL PARTICIPANTS, CORPORATE OFFICERS OF IOS, EMPLOYEES AND OTHERS FROM THEIR CRIMINAL INDICTMENT AND PERSONAL LIABILITY.

As part of this Dismissal agreement, the corporation agrees to cooperate with the investigation, assisting in the investigation, and prosecution of individuals concerning the fraud scheme charged in the above captioned case, provide and the collection of business records, providing statements and documentation to further the prosecution of the individuals identified and others not yet identified in this case and persons associated with IOS for possible obstruction of justice both before and after the indictment in this case.

IOS has agreed to cooperate after installing a NEW MANAGEMENT team and after removing the indicted individuals from their roles with the company.

Therefore, the DISMISSAL of the Corporations Indictment in this matter DOES NOT relieve the criminal liability of the individual officers, participants and others indicted in this matter.


READ the MOTION to DISMISS INDICTMENT by the United States Attorney Steven M. Buskupic

READ the DISMISSAL ORDER by United States District Judge, Charles N. Clevert.

In addition, IOS has agreed to replace the management of the corporation

Look for Detailed Explinations and Upcoming Stories detailing what happens next and the effects on the industry!!!

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