Coupon CEO gets 10 years in federal prison
$250 million fraud alleged
Ten years from the day he was charged in a sprawling, multimilliondollar coupon fraud case, a former high-flying executive was sentenced to 10 years in federal prison late Monday. Thomas “Chris” Balsiger was sentenced to prison and ordered to pay $65 million in restitution by U.S. District Judge Charles Clevert shortly before 8 p.m. Monday in federal court in Milwaukee.
Clevert, who is retiring at the end of the month, said it was the most sophisticated fraud scheme he has seen in his 20 years as a judge. He called Balsiger a “chameleon” and a “Dr. Jekyll and Mr. Hyde” and he rejected Balsiger’s suggestion of a probationary sentence, calling it “totally inappropriate,” according to a release from the U.S. attorney’s office issued Tuesday.
Prosecutors said Balsiger, former CEO of the nation’s largest coupon processing firm, was the mastermind of yearslong $250 million fraud scheme who obstructed the case from the beginning until a trial last fall. Calling him a “shameless and unrepentant fraudster,” they argued for 15 years in prison.
Balsiger’s attorney argued the government has overstated his client’s role and suggested probation. Balsiger has repeatedly vowed to appeal his conviction and sentence. His attorney did not return a call for comment Tuesday.
Clevert found Balsiger guilty on 12 counts including 10 fraud counts, one count of conspiracy to commit fraud and one count of attempted conspiracy. Balsiger was not guilty on the remaining 15 counts. The trial, which stretched over five weeks last fall, was presided over by Clevert instead of a jury.
Balsiger, the former head of International Outsourcing Services, was described by subordinates in the trial as an iron-fisted boss who orchestrated a massive fraud and then sought to deflect blame on others.
Balsiger represented himself in the trial, which was halted twice when he went to the hospital with dangerously high blood pressure. He hired an attorney to represent him at the sentencing.
Balsiger 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.
The federal investigation, launched out of Milwaukee as a number of the victim businesses were in Wisconsin, alleged Balsiger’s company, International Outsourcing, had cheated companies across the nation out of $250 million over 10 years.
Balsiger was one of 11 people indicted in March 2007, with the others
U.S. District Judge Charles Clevert called Thomas “Chris” Balsiger a “chameleon” and a “Dr. Jekyll and Mr. Hyde.”
pleading guilty or having charges dismissed. Several of them testified against Balsiger.
At its peak, International Outsourcing handled an estimated 3 billion coupons every year, taking them from the stores, sending them to the manufacturers for redemption and returning the money to the stores, collecting a fee for the service.
The alleged fraud was when the firm accepted coupons that supposedly came from small stores but were really from “chop crews,” which took newspaper inserts, cut out coupons and submitted them as if a customer had used them. They took pristine-looking coupons and made them look worn, putting them in bins and at one point putting them through a concrete mixer in Mexico.
Clevert ordered Balsiger to report to prison, which will likely happen in the next month or two.