Dunkin' Donuts Kickback Case Shows Al Capone's Legacy Is Alive and Well
Carolyn Kravetz, Dunkin Donuts' former director of external communications, has pled guilty to taking $396,875 in kickbacks from an advertising vendor.
While ad world types continually tell themselves that the days of signing printing contracts in return for envelopes full of used bills pushed across a table at the local steakhouse are over, this case is a reminder that they're not.It also shows how the feds handle bid-rigging cases against client or ad agency execs who are steering work to a favored vendor: They got her in the same way they got mobster Al Capone (pictured).
Kravetz pled guilty to six counts of mail fraud and two counts of tax evasion. She faces 20 years in prison and restitution of the $396,875 to Dunkin. She'll probably get less than that when sentenced as she's signed a plea agreement. Prosecutors have recommended 32 months in prison. Also pleading guilty was Boris Levitin, who ran Luminophore, a print and graphics shop. The pair met in college. When Kravetz went to work at Dunkin', she approved checks payable to his shop and in return he gave half the cash to her. Luminophore didn't actually perform any work for Dunkin -- making the scheme unusually brazen. Normally these scams are layered on top of real work for the client, making it harder to spot. Prosecutors have recommended an unspecified sentence at the "low end" of the incarceration range for Levitin.
Note to agency execs who enjoy "hospitality" from their vendors: The feds rarely get you on straight-up bid-rigging charges -- it's always the use of the U.S. Postal Service to conduct the fraud and failing to pay tax on the gains that trips you up. It's the same way they put Al Capone into Alcatraz -- the racketeering and bootlegging cases fell apart, so they nailed him on tax evasion.
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