Sunday, June 04, 2006

Feds probe company over use of gift cards

CRAFT has always said investigate and you will find either corruption, patronage, waste and/or fraud in your schools. The Federal Government is now doing some investigations of their own. We can not stress enough you must investigate your schools before voting yes. The following article appeared in the Chicago Sun-Times on June 3rd. Buy a copy or several copies and send it to all your friends who do not have email or read the paper . School employees or spouses are getting kickbacks from companies doing deals with schools. Schools are big business and mean big money for those doing businesses with schools. According to the article in 1998 alone a company handed out 1.5 million dollars in gift cards. It would have been much better for the schools if these companies charged 1.5 million less for their products or gave 1.5 million dollars in donations. Essentially our taxes are higher because schools are getting kick backs. Hat tip to Cal Skinner of McHenry County Blog for pointing us to the article. Cal is the leader of investigative reporting. I have reposted the article here because of its importance.

This can not be said enough as pointed out in the article below "Officials with government entities are not allowed to accept money or gifts in return for doing business with companies." That includes teachers. If you find this is happening in your schools document everything and report the matter to the authorities.

Feds probe company over use of gift cards

June 3, 2006

BY NATASHA KORECKI Federal Courts Reporter

Federal authorities are investigating a Des Plaines-based company after allegations surfaced that salespeople were handing out bribes in the form of gift certificates to secure contracts, court records show.

Individuals within the company, which the Sun-Times is not naming because it hasn't been charged, allegedly handed out $1.5 million worth of gift certificates in 1998 alone. The company was doing it to secure sales contracts, in some cases with schools or local municipalities, according to an FBI affidavit. Officials with government entities are not allowed to accept money or gifts in return for doing business with companies.

To evade suspicion, salespeople at the company would sometimes send the gift certificates to people's homes in the names of their spouses, according to the affidavit.

The Des Plaines company used Winners Choice gift certificates, which can be redeemed at any of a number of different stores, from Sears to Eddie Bauer to Sam's Club to Toys R Us. Salespeople allegedly used the gift certificates as a form of kickbacks, federal authorities allege, with the thought that they were less traceable than cash.

"[The company] was using these gift certificates to reward purchasing agents of public and private companies for awarding it contracts," an FBI agent states in the affidavit.

'Not traceable'

One cooperating witness told the FBI he accepted $2,000 worth of gift certificates in return for giving the company work with a school district. The amount of the gift certificates corresponded with the amount of the contract; one customer reportedly received $10,000 worth, according to records.

An FBI agent also worked undercover to record a conversation with one salesperson who told him that the gift certificates were "not traceable, and it's cash . . . you want to store them up for 10 years, they're still good."

Records show a second North Shore company helped process the gift certificates to the salespeople. An undercover FBI agent also recorded an executive of the North Shore company. In a conversation, the executive tells the undercover agent to give out gift certificates as kickbacks -- not cash.

"You get caught and you're gonna have those f---ing feds going over every . . . nickel and dime and checking account you got," the executive unwittingly told the federal agent. "That's all those bastards do."

No one has yet been charged in the investigation.

"We are cooperating with the government and will continue to do so," a representative of the Des Plaines company said.

The company reported sales of $420 million last year.

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