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Judge Says Dunkin' Donuts Kickbacks Stay Secret Because It's "Personal"

A Massachusetts federal judge has rebuffed a request by BNET to unseal documents regarding a kickback scheme at Dunkin' Donuts on the grounds that the papers are "predominantly personal" to the marketing executive convicted in the scheme. The seal order makes it difficult to know how many companies were victimized by Carolyn Kravetz, although at least two have been named in the case.

Little is known about how Kravetz became director of external communications for Dunkin' Brands between August 2004 and October 2005 -- and almost immediately began taking bribes for no-work contracts. (Kravetz pled guilty to taking kickbacks a year ago.)

How the scam worked
Kravetz's co-conspirator, Bruce Levitin, ran Luminophore Inc., a print shop. He would invoice Kravetz for bogus work and she would approve payment. The pair would split the money. Dunkin's corporate policy was to allow Kravetz to approve invoices of up to $100,000. The pair -- who met in college -- took nearly $400,000 between them.

Such was the success of their scheme that Kravetz was let go by Dunkin' for unrelated reasons before the company figured out what had happened. Prosecutors said at her sentencing that as she cleared her desk she approved another bogus payment for $133,175, "right as she was going out the door."

But what was Kravetz up to before Dunkin'?
The case was particularly interesting because before she got the job at Dunkin', prosecutors alleged, Kravetz conducted a similar scheme between 1996 and 2002 that netted an unknown amount from Arnold Worldwide, the Boston ad agency famed for handling the Volkswagen ad account during the relaunch of the Beetle.

Levitin admitted in a pre-sentencing report -- also sealed by the court -- that they had done it before in 2002 and 2003, according to prosecutors. Kravetz -- who had a previous conviction for credit card fraud -- also worked at PR firms Landis Communications and Edelman PR Worldwide.

I requested documents from the case in 2010 and again in 2011 after noticing that Kravetz, Levitin and prosecutors were filing papers confidentially in the case. In the U.S., litigation is presumptively conducted in open court. Among the sealed documents are Kravetz and Levitin's pre-sentencing memos, in which defendants explain their actions to the judge in the hope of leniency. Even though Judge Joseph L. Tauro sentenced both Kravetz and Levitin to 32 months' probation with six months' home confinement, he ruled in April that the public need not know the whole truth:

The court has reviewed the documents in question and is persuaded from that review that the documents contain matters that are predominantly personal to Kravetz and that there is no
apparent justification for their general publication.
At her sentencing, Kravetz argued that she was depressed during the time of her crimes "because of confusion about her sexual identity," her lawyer said.


Images by Flickr user opensourceway and psd, CC.
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