MillerCoors Fraud: Embezzlement by Executives Colluding With Vendors

millercoors-fraudLast week MillerCoors filed suit against 14 individuals and 15 companies, alleging over $10 million was stolen from the company. The claims include civil theft, fraud, breach of fiduciary duty, unjust enrichment, civil conspiracy and racketeering. Former MillerCoors executives David Colletti (vice president of on-premise marketing) and Paul Edwards (director of on-premise channel marketing) are accused of masterminding the fraud for a period of at least 13 years.

The alleged fraud is a billing scheme, in which the company made fraudulent disbursements. One component of the fraud was a shell company scheme.  The lawsuit claims that David Colletti and Pamela Colletti created a fake company which billed MillerCoors for goods and services never provided. The other component was an overbilling scheme, in which legitimate companies billed MillerCoors for goods and services not received. The participants in the schemes allegedly shared the funds paid by MillerCoors.

The theft was possible because David Colletti, senior director for the national on-premise chain accounts (sales of beer to bars, restaurants, etc.), had control of a multi-million dollar budget that was to be used for advertising, promotions, and event sponsorship.

This fraud came to light in 2013. According to the newspaper:

…a MillerCoors employee in the accounting office flagged a payment to Golden Logistics in Dousman and noted the address was the same as that listed for Maryann Rozenberg. a former MillerCoors employee who had worked under Colletti.Auditors then began investigating payments to other vendors Colletti had added to the MillerCoors accounts and invoices he had personally approved. When auditors began contacting the vendors, Colletti left the company on an extended medical leave.

In November, the company said, it was contacted by a criminal defense attorney who claimed to represent Colletti.

The list of defendants in the case filed by MillerCoors and Miller Brewing Company includes:

  • David Colletti
  • Pamela Colletti
  • DAC Management Company
  • Maryann Rozenberg
  • Golden Logistics Inc
  • Paul Edwards
  • Andrew Vallozzi III
  • AVA Advertising Inc
  • AVA Marketing & Communications LLC
  • Food Service Network Inc
  • Roderick Groetzinger
  • Victoria Groetzinger
  • Beverage Industry Marketing Services LLC
  • BIMS Inc
  • Rave Media LLC
  • Events Marketing Network LLC
  • R A R E Beverages LLC
  • Frank Buonauro
  • Judy Buonauro
  • F & B Marketing Promotions & Incentives LLC
  • Thomas Longhi
  • Longhi Golf Operations Inc
  • James Rittenberg
  • Prime Promotions Inc
  • Scott Darst
  • P&D Marketing Inc
  • Ron Young
  • Expeditions By Ron The Guide Inc
  • Jeffrey Brown

This case illustrates how important it is for companies to carefully monitor payments to vendors. A simple comparison of vendor addresses to employee addresses could have uncovered this fraud much earlier. Evaluating vendors added to the accounting system could have been valuable as well. Ultimately, an analysis of these things, along with the invoices approved for payment by Collette, revealed the magnitude of the fraud.

2 thoughts on “MillerCoors Fraud: Embezzlement by Executives Colluding With Vendors”

  1. This case is going to take a long time because there are so many defendants. According to online records, default judgments recently have been entered against Food Service Network ($303,725), AVA Marketing & Communications ($364,590), and AVA Advertising ($1,353,472). It appears as though there are lots of issues regarding discovery, so the case will probably be stuck in the discovery phase for quite some time.

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