The U.S. Seventh Circuit Court of Appeals has upheld most of the sentence of Thomas Balsiger, the former chief executive officer of one of the nation’s largest coupon clearinghouses.
Balsiger, the former head of International Outsourcing Servicing, was convicted in late 2016 on 12 of 27 counts related to a fraud scheme. Along with 10 other individuals, he was first indicted by a federal grand jury in 2007.
He was ultimately sentenced to 10 years in prison, $65 million in restitution and a $21.2 million forfeiture.
The group was accused of defrauding manufacturers who issued coupons and retail clients of $250 million, a figure that included $15 million from companies with Wisconsin ties including Racine-based S.C. Johnson, Kimberly-Clark and Plymouth-based Sargento Foods.
Balsiger and others were accused of distributing fraudulent coupons to larger retail outlets, invoicing 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.
While a number of other defendants in the case either pleaded guilty or entered into deferred prosecution agreements, Balsiger’s case carried on for a number of years. After his lead attorney died in 2014, he sought an 18-month delay to accommodate his preferred replacement’s schedule.
Concerned that Balsiger was attempting to delay the case, the district court ultimately ruled that he was waiving his right to an attorney. He ultimately represented himself and appealed, arguing the district court forced him to proceed with the case, potentially violating his constitutional rights.
The appeals court ruled against Balsiger, noting he made “a calculated decision to proceed.”
“This is not guesswork on our part,” the court wrote. “To the contrary, Balsiger vocalized his desire to ‘get this (case) to the Seventh (Circuit)’ and expressly told the district judge that he preferred not to hire an attorney, but instead to proceed pro se and ‘play the odds.’”
Balsiger also challenged the amount of the forfeiture based on the proceeds of the scheme. Prosecutors pushed for the court to require him to pay the gross proceeds of the scheme, but Balsiger pushed for a definition that subtracted the direct costs involved.
The district court sided with prosecutors, but the appeals court sided with Balsiger and remanded the case only to determine a new amount.
