Ogilvy Fraudulent Billing Case Dismissed
The plaintiff who sued Ogilvy & Mather, its digital agency subsidiary Neo@Ogilvy and two agency executives for fraudulent billing and unlawful retaliation has agreed to dismiss the case.
The suit, widely reported when it was initially disclosed in February of 2011, was filed by Neo planner Audrey Gladitsch. She alleged that the agency had intentionally over-billed client IBM over a three-year period between 2006 and 2009.
In her suit, Gladitsch alleged that the defendants "had for years been engaging in fraudulent conduct by subjecting IBM to millions of dollars in overcharges for the services that the company had ostensibly provided."
In a one sentence order issued January 3, U.S. District Judge Deborah Batts of the Southern District Court of Manhattan stated that the parties had agreed to dismiss the suit “with prejudice and without costs or fees to any party.” With prejudice means the plaintiff is barred from suing again on the same claims.
As to any settlement that preceded the dismissal, neither party was talking. “My client can’t comment on the agreement or Ogilvy,” wrote Gladitsch attorney Christopher Q. Davis of the law firm of Stoll, Glickman & Bellina in response to an email query. “I can say the following: The matter has been resolved. Our firm is very grateful for having had the opportunity to represent Ms. Gladitsch and wish her the best in her future pursuits.”
Ogilvy did not have a comment at deadline.
In addition to fraud, the suit alleged unlawful retaliation by the defendants against Gladitsch under the "whistle blower" provisions of the Sarbanes-Oxley Act after she brought the over-billing matter to the attention of higher-ups at the agencies.
Shortly after the suit was filed, Ogilvy acknowledged that the client had been overcharged, but that it was inadvertent, due in large part to media vendor contract ambiguities and quickly rectified when the matter was brought to its attention. Ogilvy strongly denied any intentional wrongdoing and asked U.S. District Judge Deborah Batts to dismiss the suit -- a request that was denied in the spring of 2012. Details of discussions leading to the agreement to dismiss were not available.
The case was particularly sensitive for Ogilvy. Seven years ago, two of its senior executives were convicted of fraud in connection with over-billing the U.S. government when the agency was handling the Office of National Drug Control Policy account. One of those executives was Shona Seifert, wife of O&M North America chairman John Seifert.