Cleveland OH Dec 9 2016 Former CEO of nation's largest coupon clearinghouse convicted in $250M coupon fraud scheme
The former chief executive officer of one of the nation's largest coupon clearinghouses has been convicted in a fraud scheme involving retail coupons.
Thomas C. Balsiger, the former CEO of Cleveland, Ohio-based International Outsourcing Services, was found guilty on 12 of 27 counts related to the scheme earlier this week. His sentencing is scheduled for March.
Balsiger along with 10 other individuals were first indicted by a federal grand jury in 2007. They were accused of defrauding manufacturers who issued coupons along with retail clients of $250 million. That figure included $15 million from Wisconsin manufacturers including Racine-based S.C. Johnson, Kimberly-Clark and Plymouth-based Sargento Foods.
The indictment alleged Balsiger and others distributed fraudulent coupons to larger retail outlets, invoiced manufacturers as if coupons were redeemed at larger retail stores instead of small ones to avoid suspicion, set targets for the volume of fraudulent coupons and took steps to cover up the scheme when manufacturers noticed problems.
The indictment also says ISO directed employees to use a cement mixer to mix fraudulent coupons into shipments.
He faces a maximum of five years in prison for the obstruction charge and up to 20 years in prison for each of the other 11.
A number of the other defendants in the case have either pleaded guilty or entered into deferred prosecution agreements. Some of the cases remain open or are awaiting sentencing.