No Trial in Sight for Dunkin' Donuts Marketing Kickback Case

Last Updated Oct 2, 2009 12:09 PM EDT

There's been a series of changes at Dunkin' Donuts over the last year that have left the company with a new CEO and new marketing management. The musical chairs made me wonder what happened to Carolyn Kravetz, the former director of external communications for Dunkin' Brands between August 2004 and October 2005. Don't recognize her name? She hasn't been the subject of many DD press releases recently because she was indicted in 2008 for allegedly taking nearly $200,000 in kickbacks from Luminophore Inc., a print and graphics shop run by Boris Levitin, her college buddy from Boston University.

The Kravetz and Levitin case has absolutely nothing to do with the other departures from DD. The case has yet to come to trial. The indictment describes how Kravetz's scheme worked:
KRAVETZ agreed to steer Dunkin' Brands business to LEVITIN's company and LEVITIN agreed to kick back to KRAVETZ one-half of his gross receipts from Dunkin' Brands. KRAVETZ then authorized payments from Dunkin' Brands to LEVITIN's company totaling approximately $396,875, including payment in full for multiple projects on which LEVITIN had performed no work. In turn, LEVITIN kicked back to KRAVETZ approximately $198,437.50.
The feds provided this nice graphic of the individual alleged kickbacks:

(Click to enlarge.) Levitin has filed a pretrial motion asking that the case be dismissed. In its response, prosecutors alleged that in addition to allegedly bribing Kravetz for the contracts, Levitin didn't actually do any work for DD:
With the exception of one project, these authorizations and payments occurred even though Levitin failed to complete the projects for which he submitted invoices; indeed, he did not perform any work whatsoever on twelve of them.
Kravetz and Levitin are filing their motions by hand in the courthouse so they are not available on the court system's electronic web site. But both have pled not guilty.

In the indictment, the feds describe DD's marketing vendor procurement policy this way:
As the Director of External Communications for Dunkin' Brands, KRAVETZ had the authority to approve invoices to vendors for up $100,000.
One hopes that since the scandal came to light the new management at DD has changed its policy to prevent individual executives in its marketing department from cutting unsupervised checks to agency vendors.

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