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UPDATE 2-Weber Shandwick ex-COO pleads guilty to fraud for embezzling from PR firm

UPDATE 2-Weber Shandwick ex-COO pleads guilty to fraud for embezzling from PR firm

Reuters · 07/27/2022 17:08
UPDATE 2-Weber Shandwick ex-COO pleads guilty to fraud for embezzling from PR firm

Adds guilty plea, statements from lawyer and IPG, background, bylines

By Luc Cohen and Jonathan Stempel

- A former chief operating officer of Weber Shandwick pleaded guilty on Wednesday to fraud after being accused of embezzling more than $16 million from the public relations firm and, ultimately, its parent Interpublic Group of Cos IPG.

Frank Okunak, 56, who had worked at Weber Shandwick for a quarter century, entered his guilty plea to charges of wire fraud and falsifying records at a hearing before U.S. District Judge Kevin Castel in Manhattan.

The Lyndhurst, New Jersey, resident also agreed to forfeit $10.8 million and pay $16 million of restitution.

Okunak's sentencing was scheduled for Dec. 6, and the U.S. Securities and Exchange Commission filed related civil charges.

Prosecutors said that from 2011 to around July 2020, Okunak arranged unauthorized payments to provide start-up capital for his own personal and business ventures, buy tickets and luxury boxes to sports events, and cover donations to his alma mater.

Okunak allegedly hid his conduct by arranging for false and misleading invoices to suggest the payments were being used for legitimate corporate purposes.

"Mr. Okunak has accepted full responsibility for his conduct, deeply regrets his wrongdoing, and is doing all he can to move forward in a positive manner," his lawyer Paul Krieger said in a statement. Krieger also said Okunak has been "fully cooperating" with authorities.

Bail was set at $500,000. The SEC said Okunak agreed to a ban from serving as an officer or director of public companies.

Authorities said Okunak joined Weber Shandwick in 1995, became COO in 2013, and was CFO from 2009 to 2019. He left in the summer of 2020.

In a statement, Interpublic said it suspended and then fired Okunak after discovering his wrongdoing.

It said client funds were involved and the dollar amounts were material to results.

Interpublic is a major advertising and marketing services company, with such brands as Deutsch, McCann Worldgroup and MullenLowe.

(Reporting by Luc Cohen and Jonathan Stempel in New York; Editing by Marguerita Choy)

((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters Messaging: jon.stempel.thomsonreuters.com@reuters.))