VII. AMERICATEL FAILED TO ADEQUATELY MONITOR THE ACTIVITIES OF ITS MARKETING VENDOR

The contract between Bravo and Americatel required that Bravo obtain LOAs from customers to consummate a sale. However, when Staff requested copies of LOAs from Amerticatel,⁵⁰ Americatel provided only a blank copy of an LOA. According to Americatel, early in the business relationship, Bravo would scan the LOAs and make them available to Americatel over the internet; when the contract was terminated, Bravo cut off access. According to Americatel, it had repeatedly asked Bravo to ship the LOAs to Americatel's office in Maryland, but Bravo ignored its requests.

In one of its responses, Americatel also referred to festivals where Bravo employees appeared to sell Americatel services and used LOAs.⁵¹ However, when staff requested details about these events (name, purpose and date of the festivals, sponsors, locations, number of Americatel employees present, nature of participation and duration of stay of Americatel employees),⁵² Americatel could name only three festivals (two in Florida and one in California), the month they were held, and the presence of Mr. Krauss and Mr. Fiallo (Regional Sales Manager, who reported directly to Mr. Krauss). Americatel did not provide further information about the festivals. In the footnote, Americatel stated that it "does have a list of all the Festivals in which Bravo participated. Mr. Krauss may have that information but he is no longer an employee of Americatel."⁵³

Furthermore, even Americatel apparently believed that its executive failed to safeguard the company and terminated the services of Vice President Mr. Krauss, the individual responsible for managing the Bravo contract. Mr. Krauss reported directly to the President and CEO. Americatel, however, indicated that there is no evidence that the Americatel employees (Mr. Krauss and Mr. Fiallo) that managed the Bravo relationship knowingly participated in or benefited from the conduct undertaken by persons associated with Bravo.⁵⁴ Americatel did not terminate Mr. Fiallo.

Americatel failed to adequately monitor the activities of its marketing vendor and did not have proper internal controls to help detect the wrongdoing.

⁵⁰ January 8, 2009 CPSD Data Request No. 5, Item 1.b.(8), (Attachment E-1)

⁵¹ September 22, 2008 Americatel Data Response, Item 5 (Attachment C-2)

⁵² January 8, 2009 CPSD Data Request No. 5, Item1.a.(5), (Attachment E-1)

⁵³ February 2, 2009 Americatel Data Response, Section IV, Footnote 9, page 5, (Attachment E-2)

⁵⁴ Ibid., Section X, page 12