Coupon Processor Charged With Fraud

MILWAUKEE -- The U.S. Attorney's office here filed charges this week against International Outsourcing Services, a coupon-processing firm, and 11 individuals, charging them with wire fraud.

MILWAUKEE -- The U.S. Attorney‘s office here filed charges this week against International Outsourcing Services, a coupon-processing firm, and 11 individuals, charging them with wire fraud. The 25-count indictment alleges that the scheme caused more than $250 million in losses to manufacturers nationwide. IOS, along with nine of its executives and employees and two individuals from another coupon firm are accused of submitted fraudulent coupons to manufacturers for payment over a 10-year period from 1997-2006. They are accused of filing coupons for redemption that had never been redeemed, or of invoicing coupons to manufacturers as having been redeemed at large retailers when, in fact, “those coupons had been submitted to IOS by smaller stores that were far more likely to have their coupons rejected due to fraud concerns,” the U.S. Attorney‘s office said. Among the accused are Thomas C. Balsiger, president and chief operating officer, IOS, and Bruce A. Furr, chief executive officer. In a prepared statement, IOS said it “has always operated with integrity to ensure that its customers, big and small, are paid fairly for the coupons they accept and that all manufacturers and other business partners are treated fairly. There has long been an industry dispute regarding coupon processing between certain manufacturers' agents and retailers, especially independent grocers. IOS has stood with those small grocers and plans to vigorously defend against these charges.” -- Mark Hamstra