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Issue Date: Vol. 52, No. 2, February 2012, Posted On: 2/7/2012


NJ Vending Executive Charged With Defrauding Pepsi Bottling Group Of $2.9 Million


Emily Jed
Emily@vendingtimes.net
Culinary Ventures Vending, Joseph Belasco, Pepsi Bottling Group, Impact Cause Related Marketing, Pepsi, defraud of Pepsi Bottling Group, Pepsi customer referral scam, Pepsi referral commission scam, vending businss, vending machine

UNION, NJ -- The chief financial officer of Culinary Ventures Vending was arrested last week by FBI and IRS agents on charges he defrauded Pepsi Bottling Group of nearly $3 million over a 10-year period.

Joseph Belasco, of Cedar Grove, NJ, was indicted by a federal grand jury on one count of conspiracy to commit mail fraud, five counts of mail fraud and one count of money laundering for allegedly participating in a decadelong fraud to receive commissions for customer referrals for which he was not responsible. If he’s convicted, he could be sentenced to 20 years in prison for each count. He can also be ordered to pay $1.75 million in fines and forfeit an additional $4 million.

According to the indictment, which was unsealed on Feb. 2, Belasco worked with three other people -- a Pepsi sales representative, Belasco's wife and another executive in Belasco’s Union, NJ, vending company, Culinary Ventures Vending, in a long-running scheme. The others haven’t been charged with any crimes, and their names weren’t disclosed in the court filings.

The federal grand jury indictment states that Belasco created Impact Cause Related Marketing as a subsidiary of Culinary Ventures Vending. Its purpose, according to prosecutors, was to provide Pepsi Bottling Group, the world’s largest Pepsi bottler (which was purchased by PepsiCo in 2009) with leads for acquiring new customers. In return, Impact Marketing and Belasco received commissions. Impact Marketing also received quarterly rebates based on the amount of Pepsi product a customer purchased on an annual basis.

The Pepsi representative identified in the indictment as a co-conspirator allegedly credited Impact Marketing for new leads that, in fact, he developed in his own position with the bottler. The prosecutors also charge that he reassigned existing Pepsi customers to the list of new customers allegedly referred by Impact Marketing, creating additional commissions for leads that Belasco was not responsible for generating.

Between 1998 and 2008, according to the indictment, Impact Marketing allegedly received approximately $2.9 million in commissions and rebates as a result of the scheme.

In return, the indictment found, Belasco illegally paid the Pepsi representative and his wife a total of $1.1 million over a decade.

The scheme reportedly ended in 2008, when Pepsi said it would no longer send commissions or rebates to Impact Marketing unless Belasco provided accounting records for his customer referrals. Authorities say that Belasco and his co-conspirators came up with a plan to attribute sales leads to people who didn’t work for Impact.


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