Indiana Company Named in Federal Coupon Fraud Indictment

MILWAUKEE - An Indiana coupon handler and several of its executives were charged in a federal indictment here with scheming to defraud stores and manufacturers of at least $250 million over 10 years.

The 25-count indictment unsealed last week in Milwaukee accuses Bloomington, Ind.-based International Outsourcing Services (IOS) of defrauding manufacturers across the country.

The indictment says the firm submitted coupons for reimbursement that were never used by consumers, but rather were cut up by so-called coupon clipping crews.

IOS issued a statement saying there has long been an industry dispute regarding coupon processing between certain manufacturers' agents and retailers, especially independent grocers. IOS said it has stood with those small grocers and plans to vigorously defend against these charges.

"IOS has always operated with integrity to ensure that its customers, big and small, are paid fairly for the coupons they accept and that all manufacturers and other business partners are treated fairly," the company said in a statement. "In fact, in more than 40 years in the business, and after repeated audits of its processes by manufacturers, IOS has never even been sued with respect to its coupon invoicing or billing procedures.
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