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News Article
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2 plead out in IOS case
By Timothy Roberts
Two former plant managers have pleaded guilty in a $250 million coupon-redemption scheme and are ready to testify against nine executives of International Outsourcing Services, including three prominent El Paso businessmen.
Plant managers Ovidio Enriquez, of El Paso, and David Howard, now of Del Rio, each pleaded guilty Tuesday to one count of conspiracy to obstruct justice.
In pleading guilty, Enriquez, who managed IOS’s Juarez plant, and Howard, who managed plants in southern Mexico, agreed to cooperate with the government.
But defendant Thomas “Chris” Balsiger, an El Pasoan and the former CEO of the company, says the guilty pleas do not put a hole in his defense.
The Enriquez and Howard plea deals, Balsiger told El Paso Inc., mean only “that for two years they were able to withstand the government onslaught and when they ran out of funds they had to plead. … Government coercion forced the plea.”
The two other prominent El Pasoans are James Currey, who was president of Currey Adkins, a firm that handled information technology; and Steven Furr, IOS executive vice president and board member.
IOS, once the largest coupon processor in the country, was responsible for verifying claims for redemption. Last June, the company sold off its assets to settle $110 million in debt.
Balsiger was indicted March 6, 2007, in U.S. District Court in Wisconsin, along with Currey, Steven Furr, and Bruce Furr, IOS board chair; Lance Furr, an executive vice president, board member and CFO; William Babler, CFO; Howard McKay, consultant and sales manager; Daxesh Patel, a coupon broker in New Jersey; Bharatkumar Patel, another coupon broker; and Enriquez and Howard.
They were accused of deceiving manufacturers into redeeming coupons that were fraudulent. Among the devices used to further the fraud was a cement mixer at the Juárez plant that made pristine coupons appear dog-eared on the path from home to store to redemption center, according to court documents.
The executives pocketed $250 million in the scheme, according to the indictment.
There were 25 counts. Several months later, the U.S. Attorney’s office got two more counts added, these for conspiracy to commit fraud and obstruct justice. All but one — the conspiracy to obstruct justice charge — were dropped for the two men who pleaded guilty.
In return, they agreed “to fully and completely cooperate with the government in its investigation of this and related matters,” according to the plea agreements, obtained by El Paso Inc.
Balsiger and Bruce Furr have tried to have the case dismissed, in part because of “outrageous conduct” of the government. Furr says the FBI improperly searched his office, the Department of Justice has denied him a speedy trial, the IRS has withheld a $5 million tax refund, and denied him access to proceeds of the sale of IOS, money he needed to mount his defense.
Balsiger claims that the U.S. Attorney in Milwaukee indicted him and the other IOS executives to distract from his failed attempt to connect a smaller coupon processor to the funding of terrorist groups in the Middle East.
He says the government has relied on information from an industry rival, NCH Marketing Services Inc. of Deerfield, Ill., which would like to harm IOS.
But Assistant U.S. Attorney Stephen Ingraham has denied those accusations.
The guilty pleas create a roadmap of what the Enriquez and Howard could testify to at a trial of the remaining defendants.
The plea agreements says that Balsiger and other executives warned departing employees that they would lose their severance packages if they talked with law enforcement or cooperated with the grand jury. It also alleges that Balsiger ordered the destruction of documents that were relevant to the investigations.
Balsiger told El Paso Inc. he’s not worried.
“We feel very confident in the case,” he said in a telephone interview. “Everything is contrived.”
Balsiger, 56, a mountain climber who has ascended some of the tallest peaks in the world, suffered a heart attack a year ago. He says he is fully recovered now and plans to climb Mount Everest.
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| Bruce Que - posted: 4/15/2009 2:38:47 PM
It is always interesting when an indicted person with high-priced legal representation claims a “Government Witch-hunt” with no plausible explanation as to why the government would be motivated to act alone with no cause.
The obvious follow-up strategy is to accuse anyone who takes a plea bargain to save their own skin with reduced charges must also have been wrongfully pursued by the same government witch hunt. PLEASE!
This man deserves all of his legal rights under the laws of this country to defend himself any way he and his legal advisors choose.
If found guilty, lets also apply the penalties of breaking the law just as fairly.
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