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Coupon Clearinghouse Responsible for $250 Million in Coupon Fraud!

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Coupon Clearinghouse Responsible for $250 Million in Coupon Fraud!

"I don't like the coupon business, never did..."
"It's a lying, cheating, dirty business"
- Chris Balsiger, former CEO of IOS

International Outsourcing Services LLC (IOS) was once the nation’s largest clearinghouse of discount coupons. IOS would receive coupons from retailers, process them, receive payments from manufacturers, and pay retailers after subtracting fees for its services.

Eleven executives of International Outsourcing Services were charged in 2007 in a scam which laundered coupons through large retail accounts, including CVS, HEB Stores, Food Lion, Hannaford Brothers, Winn-Dixie and Kash n’ Karry Stores, without the knowledge of the retailers.

Among the allegations contained in the indictment:
• That IOS and the individual defendants included fraudulent coupons in shipments of coupons redeemed at IOS’ larger retail clients including HEB, Food Lion, Winn-Dixie and other major retailers

• That IOS and individual defendants submitted false invoices to coupon providers and their agents to make it appear as if the fraudulent coupons had been redeemed at IOS’ larger clients

• That Balsiger and Bruce Furr sent a private investigator into Mexico to forcibly obtain physical evidence held by a witness in that country.
All but four of the defendants have agreed to plead guilty to lesser charges in exchange for the most serious charges being dropped, court documents show.

In September 2015 one of the remaining four defendants entered into a deferred prosecution agreement, in which prosecutors generally agree to drop charges if a defendant agrees to change their conduct.

The long-awaited trial had been scheduled for Oct. 26, 2015 but was delayed until February after defendant Chris Balsiger said he could not be ready for trial due to the death of his lawyer, Sib Abraham.

The coupon clearinghouse has since been sold and liquidated.

"I have seen my reputation destroyed, I have seen my firm raped and destroyed, and I am not happy," Balsiger says. "We are proceeding to go to trial because I want the truth to come out."


update 03/07/17

Chris Balsiger, former CEO of IOS sentenced to 10 years in federal prison

Thomas "Chris" Balsiger was sentenced to 10 years in prison and ordered to pay $65 million in restitution by U.S. District Judge Charles Clevert in federal court in Milwaukee. Balsiger was found guilty on 12 counts including 10 fraud counts, one count of conspiracy to commit fraud and one count of attempted conspiracy. Clevert rejected Balsiger’s suggestion of a probationary sentence, calling it “totally inappropriate," according to release from the U.S. Attorney's Office issued Tuesday. Prosecutors called Balsiger a "shameless and unrepentant fraudster," they argued for 15 years in prison.

Balsiger has repeatedly vowed to appeal his conviction and sentence. He claimed he was the victim of a plot by his competitors, and an overzealous investigation by FBI agents and federal prosecutors who didn't understand the coupon business.

sources:
el paso, inc | el paso, inc | washington post | huffington post | cic press release | copy of indictment | iosnet.com | wall street journal | el paso times | el paso, inc | journal sentinel