Advanced Marketing Services Executive Pleads Guilty

The federal government’s yearlong investigation into Advanced Marketing Services, the book wholesaler that services many major warehouse clubs, moved into a new phase last week.Former director of advertising (creative services) Marcy Wilson Roke, 38, pleaded guilty to one count of conspiracy and one count of wire fraud in connection with a plan to defraud customers. She faces up to 20 years in prison and a fine of as much as $250,000 for each count, with sentencing scheduled for the end of January.As part of her plea, Ms. Roke admitted to engaging in a conspiracy with other AMS employees to get publishers to pay for promotions that were never provided, and to purposely under-printing sponsored direct-mail postcards and magazines in order to enhance company profits.At the same time, the SEC filed civil charges against Ms. Roke on top of her criminal plea. The commission alleged “that AMS fraudulently overstated its earnings through two schemes.” It asserts “that the fraudulent schemes caused AMS to overstate its pre-tax earnings by about 9% in fiscal year 2001, 10% in fiscal year 2002, and 19% in fiscal year 2003.” The commission also says that its “investigation is continuing.” SEC Pacific regional office director Randall Lee told the San Diego Union-Tribune the suit is “‘an important first step’ in the agency’s efforts to punish anyone involved in helping inflate the firm’s earnings.”AMS has failed to file statutory quarterly and annual SEC filings ever since the government announced its investigation last summer. The company had already reduced its earnings forecasts in January of this year, and again in the middle of September, due to both a restatement of previous profits in connection with the investigation and the costs of re-auditing its books.

Advanced Marketing Services Executive Pleads Guilty

Advanced Marketing Services Executive Pleads Guilty

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