Wednesday, June 15, 2005

Feds Arrest Former 'Newsday' Employees in Circulation Fraud Case

According to U.S. attorney Roslynn Mauskopf, Smith orchestrated a scheme in which Newsday employees and others posing as customers bought many copies of the paper from hawkers around Long Island in order to fool observers from the Audit Bureau of Circulation. The hawkers worked for a distributor that threw away tens of thousands of papers daily and counting them as sold, Mauskopf alleged.
Garcia and Czark are accused of working with distributors to falsify circulation numbers for Hoy, Mauskopf said.
David Folkenflik of National Public Radio reported today that an affidavit unsealed in federal court "sketched out an elaborate scheme involving phony accounting, kickbacks and the creation of sham corporations....

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