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FBI Initiates Criminal Media Buy Investigation

The Association of National Advertisers recently confirmed the existence of an investigation by the Federal Bureau of Investigation and the United States Attorney’s Office for the Southern District of New York into fraudulent media buying practices. The investigation was first reported in September but the FBI declined to confirm its existence at that time.

At present, the subject matter of the investigation is somewhat unclear. However, legal professionals close to the matter believe that it may involve rebate-related deception between media holding companies and advertisers, mail or wire fraud, tax evasion and possibly racketeering.

Many believe that the catalyst for the investigation was a 2016 ANA report that claimed cash rebates were rampant in the U.S. media-buying industry, spanning across digital, print and television media. Specifically, backend incentives from media outlets that are not disclosed to advertisers and designed to incentivize ad agencies to put advertisers into one media buy over another.

The ANA considers the probe to be a significant to the industry and its members. It is attempting to identify advertisers that have been defrauded and has also requested that its members assist in the criminal investigation of media buying by identifying witnesses and evidence. The ANA has also urged its members to reassess its media buying relationships, contracts and internal marketing processes. The digital advertising model may be in store for a significant overhaul designed to minimize fraud and bolster transparency.

© 2019 Hinch Newman LLP

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About this Author

Richard Newman, FTC Defense Lawyer, Internet Marketing, Hinch Newman Law Firm

Richard B. Newman is one of the premier FTC advertising compliance and regulatory defense attorneys in the United States.  He regularly provides advertising counsel and represents clients in high-profile investigations (CIDs) and enforcement proceedings initiated by the Federal Trade Commission, state attorneys general, departments of consumer affairs, and other federal and state agencies with jurisdiction over advertising and marketing practices.  Richard also handles  transactional matters relating to the dissemination of national advertising campaigns, including the...

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