• by Steve McClellan , November 9, 2018

The Association of National Advertisers has issued a follow-up report to last month’s member missive confirming an FBI-U.S. Attorney’s Office probe into possible fraudulent conduct in the media-buying sector.

The new report, compiled by ANA outside counsel Reed Smith, details the potential crimes the FBI is looking into, including mail and wire fraud, conspiracy and racketeering.

The report notes the FBI and DOJ would not have begun the probe “unless they believe, at a threshold level, that potentially criminal activity has taken place.”

But the report also clarifies the kind of cooperation from potential victims the government investigators are looking for. “Meaningful cooperation,” it notes, means that potentially aggrieved parties need to conduct their own formal internal investigations before calling the FBI.

“If and when you uncover indications of fraud, supported by actual evidence, then the FBI wants to hear from you. It is not expected that your evidence will establish proof beyond a reasonable doubt. That is the job of the government. The FBI wants concrete reasons supporting your belief that you may have been defrauded.”

Those that decide to conduct internal investigations should probably retain outside counsel to assist. Such probes, to be effective, would cover contract analysis, communications histories with agencies, review of prior media audits, financial analyses and other elements.

“All investigations and audits should be structured to maintain the attorney-client privilege,” Reed Smith recommends.

The report notes that some ANA members have expressed concerns about “retaliation” in the event their cooperation is exposed. If retaliation does occur, that behavior itself would constitute a crime, per the report. It also notes that exposure would not likely occur before the discovery phase of a trial and that “only a very few cases result in a trial.”

Following an internal probe, if an advertiser does decide to cooperate, its counsel would then notify the FBI. The report urges that cooperators insist they receive a grand jury subpoena, the terms of which would be negotiated before evidence is provided.

Cooperation could lead to the FBI interviewing former and current employees with potential knowledge of fraud. Potential benefits of cooperating include financial restitution if fraud is proven.

The industry may benefit as well from potential deferred or non-prosecution agreements that might help to curb future illicit behavior.