The former vice president for advertising for the USA Drug chain based in Pine Bluff pleaded guilty to defrauding the company Wednesday in Little Rock.
Garret Sorensen 42, had been indicted by a federal grand jury in 2009 on one count of conspiracy to commit mail fraud, 29 counts of mail fraud and three counts of money laundering. His wife and sister-in-law were also indicted.
According to the U.S. Attorney’s Office, Sorensen, his wife, Katherine, and sister-in-law Shannon Walters were scheduled for trial this week but that trial was delayed while plea negotiations were conducted that resulted in an agreement.
Sorensen pleaded guilty to one count of mail fraud and one count of money laundering, and as a part of the agreement, the government agreed to dismiss the remaining 29 counts against Sorensen, and to drop the charges against his wife and sister-in-law.
The fraud charge stemmed from transactions made by Garret Sorensen between 2005 and 2007 while working for USA Drug as vice president of advertising. In late 2005, Sorensen, his wife and sister-in-law formed Multi-Media Management, which they represented as a media placement company.
Independent reporting for Pine Bluff & Jefferson County since 1879.
Garret Sorensen then began to funnel all insert and direct-mail advertising for USA Drug through his company, and did not notify USA Drug management of his interest in the company.
By funneling the insert and direct mail advertising through MMM, Sorensen collected a profit of approximately $500,000, which the U.S. Attorney’s Office said was obtained by overstating insert quantity, billing for inserts that were not placed and charging an inflated service fee.
In addition, Sorensen reportedly included in MMM bills charges for the direct mailing of advertising materials for which no service charge had ever been paid before.
The U.S. Attorney’s Office said more than $248,000 of the MMM profits were dispersed directly or for the benefit of Garret and Katherine Sorensen, with the money being used to purchase, among other things, a boat, a Jeep, Rolex watch and a Chevrolet Suburban.
The purchase of the boat from Bradford Marine served as the basis for the money-laundering charge to which Sorensen pleaded guilty.
Sentencing for Sorensen has been scheduled for Sept. 7 at 1:30 p.m. in Federal District Court at Little Rock. The maximum penalty for money laundering is 10 years in prison, while the maximum penalty for mail fraud is 20 years in prison. A potential fine of $250,000 on each count is also possible.
The investigation was conducted by the Little Rock field office of the Federal Bureau of Investigation and the Criminal Investigation Division of the Internal Revenue Service.