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.
Balsiger was also accused of providing false information to law enforcement and retail clients who had received subpoenas, attempting to persuade individuals to provide false information to law enforcement, threating lawsuits or financial harm to employees who cooperated and concealing or destroying records.
He was convicted on 10 counts of wire fraud relating to coupons for S.C. Johnson and LaSaffre Yeast, one count of wire fraud conspiracy and one count of conspiring to obstruct justice. 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.
Balsiger also faces a potential restitution order.
He was permitted to travel home to El Paso, Texas pending his sentencing and will be under electronic monitoring.
A number of the other defendant s in the case have either pleaded guilty or entered into deferred prosecution agreements. Some of the cases remain open or are awaiting sentencing.