Jan 04 2007
A federal judge has sentenced the former vice president of advertising at Advanced Marketing Services to 36 months in prison for her role in falsifying earnings. Sandra Miller Christie pleaded guilty in 2005 to charges that she conspired with other former employees to defraud AMS clients and inflate the profitability of the company's advertising department. Federal investigators found that AMS had exaggerated the circulation figures of promotional mailings sent on behalf of publishing companies. The scheme occurred from 1999 through 2003. Two other former executives have also been convicted.
Advanced Marketing distributes best-selling books to warehouse stores, primarily Costco, and provides customized merchandising services. They are also the publishers of Pages magazine. On December 30th, AMS filed for Chapter 11 bankruptcy. Their stock fell 81% on the news, from $2.60 to 50 cents. In its bankruptcy filing AMS listed assets and debts of more than $100 million. Its biggest unsecured creditor is Random House, which has a claim of $43.3 million. A Costco spokesperson said that until further notice, publishers should operate "on a business as usual basis." Costco, the spokesperson added, is monitoring events "on a day-to-day basis." Most of the larger publishers that supply AMS indicated they will continue to do so, but on a COD basis.
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