VI. AMERICATEL FAILED TO PERFORM DUE DILIGENCE IN ESTABLISHING BUSINESS RELATIONSHIP WITH ITS MARKETING VENDOR
According to Americatel, its Vice President of Marketing, Mr. Hector Krauss44 developed and managed its marketing relationship with Bravo. Prior to entering into an agreement, Mr. Krauss requested and reviewed the resumes of Bravo's President and CEO (Gregory Bever), Vice President of Sales (David Yepes), and Vice President of Strategic Alliances (Konsta Constant). Staff observed there was no mention, however, of performing other types of review or assessment, such as verification of performance with previous employers (i.e., MCI or Snyder Communications), provision of references, or thorough background check (i.e., criminal records). Americatel confirms this observation in its October 31, 2008 Response to Data Request No. 4, Item 3.b.45, wherein Americatel stated:
"3.b. In the past vendor due diligence was the responsibility of the business person that engaged the vendor. This person is expected to conduct reasonable due diligence. At the minimum, a credit check was required."
Additionally, Americatel stated that Bravo was formed for the sole purpose of conducting business with Americatel,46 and that Mr. Yepes, Vice President of Sales, was adjudicated guilty of larceny in the first degree.47
Americatel also appeared to admit that it had not performed adequate vendor check in the past and has recently adopted a "Vendor Due Diligence" policy to minimize legal and financial risks to Americatel, as well as to protect consumers going forward, (September 22, 2008 Response to Data Request No.3, Item 5;48 October 31, 2008 Response to Data Request No. 4, Item 3.a., and Attachment C..49
44 February 2, 2009 Americatel Data Response (Attachment E-2)
45 Attachment D
46 February 2, 2009 Americatel Data Response, Section II, Footnote 4, page 2, (Attachment E-2)
47 Ibid., pages 10 & 11
48 Attachment C-2
49 Attachment D
