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An African-American-focused cable network is suing the U.S. Army's outside advertising agency, claiming it was duped into doing business with a financially unviable partner as part of a scheme to defraud the government. TV One claims Universal McCann Worldwide misrepresented the financial health of an advertising placement partner to cash in on federal incentives related to boosting military recruitment of minorities, according to a lawsuit filed Friday in Maryland federal court. According to the complaint, McCann "conspired to identify a small business media buying agency to use as their puppet in order to collect hundreds of thousands of dollars in incentive bonuses from the United States government, defrauding the Plaintiffs in the process." TV One claims it was misled into doing business with and extending credit to a "sham" buying agent, Penn, Good & Associates, so McCann could continue to cash in on Army incentive bonuses. The bonuses were part of a 2004 contract with the U.S. Army for an ad campaign designed to boost recruitment of African-Americans. The contract included incentives for placing subcontracts with small, minority-run and disadvantaged businesses as part of the federal government's goal of awarding five percent of contracting dollars to such companies. The cable network claims McCann then hired Carol H. Williams Advertising to place Army ads on media outlets geared toward African-Americans like TV One. When CHWA became too large to qualify as a small business, McCann partnered with LaGrant Communications. CHWA continued planning the media strategy and LaGrant placed the ad buys on McCann's behalf.
For the original version including any supplementary images or video, visit https://www.hollywoodreporter.com/thr-esq/us-armys-ad-agency-sued-fraud-by-cable-network-1136018
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