Former Posterscope US top managers plead guilty to $19.7m fraud as out of home giant returns to China

It’s one of life’s ironies that former Posterscope US president Todd Hansen has pleaded guilty to a $19.7m fraud involving bumping up profits so he could secure big bonuses at the same time as the Aegis-owned out of home company has announced it is to return to China where it had been operating officially through its Heartland subsidiary.

Media practices in China are not known for their transparency, with rival Publicis Groupe’s Vivaki media operation at the centre of more than one investigation.

Hansen (pictured) and Posterscope US finance director James Buckley (who pleaded guilty to similar charges on June 1) both face long terms of imprisonment in the US. Aegis has not commented on the convictions so far but throughout has stoutly maintained that the activities of Hansen and Buckley were those of rogue employees; pointing out that the company itself initiated the criminal investigation when it found out what the two were up to.

Which indeed it did. But the company, the new holder of the $3bn General Motors media account and the current top performer among the world’s big marcoms companies, has an unfortunate history with such employees.

Aleksander Ruzicka (left), one-time head of Aegis Germany, is currently serving an eleven year sentence for personally siphoning off millions of euros in media owner discounts that should have been returned to client Danone. Last year it emerged that Aegis had incurred a £37m bad debt with Spanish industrial client Rumasa. No-one, as far as we know, has been dragged before the beak for this one but it’s a quite staggering amount of money to go astray.

Posterscope is one of the two biggest worldwide out of home specialists (the other is WPP’s Kinetic). Commissions in outdoor are more flexible, to put it politely, than in most other areas of the media universe. To a large degree this is because outdoor owners are desperate to attract business from the big specialist agencies and willing to offer huge discounts that they are keen not to publicise. So, at various times, there’s lots of money washing around with, it would seem, no pre-determined home to go to.

A bit more transparency all round would no doubt reduce the opportunities for ‘rogue employees.’

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.