Gianakos accountant testifies

By Staff
What the defense wants the jury to remember:
Accountant Jessica Cooper testified that beginning in 1992, Primestar executive David Colvin asked Gianakos Associates to pay his personal American Express bills and then invoice Comcast for reimbursements.
She said Gianakos Associates was never given a copy of the itemized American Express bill, just the stub to be included with payment.
Colvin, she said, specified five billing categories under which reimbursements were to be requested advertisement and promotion, direct mail, TV, newspaper and radio. Further, Gianakos was to split larger amounts into smaller increments and limit the amount of each reimbursement request to less than $4,500 to expedite payment.
A 33.34 percent mark-up or handling fee was charged to Comcast on the reimbursement requests. The end result was an invoice in which the mark-up equaled 25 percent of the total. (For example, a reimbursement request for $100 would be made up of $75 in charges and $25 in mark-up. The $25 figure is obtained by multiplying $75 by 33.34 percent.)
Accounting concerns
Like the American Express bills that generated them, Gianakos' requests for reimbursement were submitted without back-up documents because Cooper did not have back-up documents.
In the summer of 1995, Cooper became concerned about the billing practice and consulted an attorney. She then met with Gianakos in July.
Without itemization, she said, Comcast accountants would be unable to distinguish between the two. Cooper was also concerned about "liability" that might attach to Gianakos Associates because of the non-standard billing practice.
Gianakos met with her current attorney, Frank Trapp, and a number of changes were made in August 1995: 1) the reimbursement invoices were labeled "American Express" and referenced Colvin's Amex account number; and 2) the mark-up was reduced to 10 percent and was labeled on the invoices as a separate processing and handling fee.
Cooper said Gianakos asked for, and received, a letter from Comcast officials authorizing her to pay Colvin's American Express bills.
Colvin influence
Finally, Cooper said Gianakos Associates officials relied on the integrity of Comcast their largest client to issue legal instructions. She also said the power and influence of the Colvin family affected decisions.
Cooper said she believes Gianakos to be an honest person, and does not believe Gianakos was aware of David Colvin's illegal activities.
What the prosecution wants the jury to remember:
Assistant U.S. Attorney Bob Anderson's questions to accountant Jessica Cooper focused on the prosecution's belief that Kim Gianakos knowingly submitted fraudulent American Express reimbursement vouchers to Comcast.
Gianakos Associates paid Primestar executive David Colvin's personal American Express bills and then submitted invoices to Comcast for reimbursement.
In his first line of attack, Anderson introduced an internal memo from Gianakos to accountant Jessica Cooper. The memo explained how to bill Comcast for large expenditures in small increments, as requested by Colvin. It read, it part:
Anderson challenged Cooper to explain how totals "arbitrarily" arrived at could reflect the actual expenses charged on Colvin's Amex card.
Cooper said she had no way of knowing whether or not they accurately reflected expenses since she had no back-up documentation.
She said this was the billing method requested by Colvin, but admitted she never heard the instructions directly.
Services rendered
Anderson next queried the five billing categories used on the reimbursement invoices advertising and promotion, direct mail, TV, newspaper and radio.
Cooper replied that Gianakos employees had not. These were marketing expenses incurred directly by Colvin.
Totals on reimbursement invoices to Comcast were multiplied by 33.34 percent. The result was added to the invoice as an agency mark-up. Cooper said the invoices took time to prepare, and that Gianakos should be compensated for the period of time the money paid out was unavailable to the agency.
Office atmosphere
Anderson also pointed out that whatever her stated opinion of Gianakos' integrity Cooper had considered resigning over the Colvin billings. Drafts of her resignation letter were introduced as evidence.
He also pointed out that Cooper had sought the advice of an attorney before broaching the subject with Gianakos in July 1995 and had conducted a meeting of the senior staff on the subject while Gianakos was out of town.
A former employee testified the letter from Comcast authorizing payment of Colvin's American Express bill appeared to be a forgery at the time.
Finally, Anderson asked Cooper about a set of documents she kept separate from the agency's files after her grand jury testimony in the summer of 1998. He asked her why.
Money trail:
The briefcase containing those files was stolen by Cooper's ex-husband and turned over to the FBI.
1. Primestar executive David Colvin charges $50,000 on his American Express card.
2. Gianakos pays American Express bill.
3. Gianakos invoices Comcast for reimbursement. The total is multiplied by 33.34 percent to determine agency mark-up. Total billed is $66,670 (before 8/95).
4. Comcast issues check for $66,670 to Gianakos.