NY Mtg. Buyers Nabbed By FBI

<B> NY Mtg. Buyers Nabbed By FBI</B>

By Cheryl Rosen

In an unusual case of fraud in the meetings industry, the FBI has arrested former travel and meeting manager Jacqueline Varacchi, and her husband, Todd McCormick, and charged them with using the mail to defraud their employer, trade publisher Ziff Davis, of $177, 738.37.

FBI spokesman Jim Margolin told BTN that in her previous position as Ziff Davis' travel manager, Varacchi also coordinated trade show participation. "In that role," she, McCormick and co-defendent Darlene Lane allegedly came up with a scheme whereby she was reimbursed for shipping and storage bills from VTS Corp. of Phoenix, Lane's employer, that "were not legitimate invoices."

The McCormicks were arrested in New York, and are currently on bail awaiting a Jan. 29 hearing.

In the FBI complaint, special agent Jane Rhodes stated that the first alarm was raised by VTS, which contacted Ziff Davis in March 1998 after discovering three invoices, dated between October 1997 and January 1998, for services that were never performed. Ziff in turn contacted the FBI. The complaint said that McCormick admitted to Rhodes that he had been offered the checks by his VTS account rep, Darlene Lane, as kickbacks for directing Ziff business to VTS. He said Varacchi, his boss at the time, approved the invoices as part of the scheme. Varacchi and McCormick were secretly married in December 1997.

Between the time of the alleged fraud and her arrest, Varacchi left Ziff for a travel management position at Lehman Brothers, a financial investment firm spun off from American Express in 1993. Both Ziff and Lehman Brothers declined comment on the case, other than to say she is no longer employed at either company. Lehman Brothers is interviewing "both within the company and outside" for a new travel manager to replace Varacchi, a spokesman said.

Margolin said that in his 11 years at the FBI, he does not recall any other cases of meeting planners embezzling funds from their companies. But BTN has reported one other case, also involving a Manhattan financial firm, in which meeting planner Kathy Tompkins ripped off Salomon Brothers by obtaining estimates for crystal and other "party equipment" and attaching them to expense reports as though they were actual receipts. She collected $1.1 million in 23 separate reimbursement checks before a Salomon Brothers auditor questioned the purchases and began looking for the equipment (<I>BTN,</I> June 13, 1994).

Cindy Perper, director of corporate travel services at Colgate Palmolive, worked in the Salomon travel department at the time. "We are paid to negotiate on behalf of our companies, and receiving money from vendors is clearly not ethical," she said. "Nobody has ever offered me a kickback, and I hope that the stuff that used to happen has gone away. But you can't be naive.