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Decatur Salesman Charged in Scheme to Increase Sales and Commissions by Rewarding Government Purchasing Agents

FOR IMMEDIATE RELEASE
August 6, 2008

Springfield, Ill. - A federal grand jury today returned an indictment charging a Decatur man, Douglas Pope, 56, for his role in an alleged fraud scheme that rewarded purchasing agents, including those who purchased products for governmental agencies, for buying cleaning and janitorial supplies from his employer, Drummond American Corporation. Drummond sold cleaning solvents, industrial deodorizers, janitorial supplies to private companies, government agencies, hospitals and schools.

According to the indictment, over a period of approximately 10 years, from July 1995 to at least December 2005, Pope, a district manager and sales agent for Drummond, participated in a company sales program that awarded monetary incentives to purchasing agents, but concealed the awards from their respective employers. Pope, whose sales territory included various central Illinois counties, received a commission from Drummond for sales he made.

To increase sales revenue, according to the indictment, Drummond and its parent company, Lawson Products, Inc., developed an incentive program that authorized sales agents to award monetary incentives to influence and reward agents who purchased products from Drummond on behalf of their employers. Another company, Keogh, Inc., was hired to administer the program.

The indictment alleges the scheme required several steps: first, the sales agent, Pope, notified Drummond of the purchasing agent to receive an award and the amount; the company administering the program then mailed “Winners Choice” certificates to the purchasing agent’s home address to help conceal them from the agent’s employer; to redeem the certificates, the agent returned them to Keogh and designated a retail store for spending the value of the certificates. “Winners Choice” checks were then made payable to both the purchasing agent and the retail store and were mailed to the agent’s home. As alleged in the indictment, this process resulted in forcing purchasing agents to redeem checks at retail stores rather than depositing the awards in bank accounts, making it more difficult to trace that the awards had come from Drummond to the purchasing agent.

The indictment further alleges Pope concealed from Drummond that purchasing agents employed by governmental agencies were receiving awards by falsely representing that the agents worked for private companies. As a result of the scheme, Pope allegedly received more than $200,000 in commissions for sales to various entities, including governmental entities, in Central Illinois.

The charges are the result of an investigation by the Federal Bureau of Investigation and the U.S. Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorney Patrick J. Chesley.

A summons will be issued for Pope to appear in federal court in Springfield at a date to be determined by the U.S. Clerk of the Court.

If convicted, the offense of mail fraud carries a statutory penalty of up to 20 years in prison.

Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.

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