Wisconsin Distributor Accused of Bilking 'NYT' of More Than $300,000

By: Joe Strupp A Wisconsin man who had distributed The New York Times in his local area for six years is accused of defrauding the newspaper of more than $300,000 in delivery fees and printing costs, according to the La Crosse (Wis.) Tribune.

The newspaper reported Wednesday that federal wire fraud charges had been filed Tuesday against Martin T. Holtet, 50, for allegedly bilking the Times by submitting about 8,500 false subscriptions.

He is accused of defrauding the company of $227,000 in delivery fees and $98,000 in printing expenses, the paper said, adding that he was arrested Tuesday and made an initial appearance in U.S. District Court in Madison the same day.

"According to the criminal complaint filed in U.S. District Court for the Southern District of New York, Holtet delivered papers for the New York Times from 2002 to April 2008," the Tribune reported. "Holtet was paid for each paper delivered in Wisconsin and Minnesota.

"From 2007 to early 2008, the number of subscribers in the La Crosse area jumped from 65 daily and 103 Sunday to 2,781 daily and 2,818 for Sunday papers. Nearly all of the new subscriptions were submitted on the paper?s Web site with a request to be billed later," the paper added. "The Times began shipping the papers and sent invoices to the new subscribers, often to multiple names at the same address. When many of the bills began coming back as undeliverable and others went unpaid, the newspaper cancelled more than 3,000 subscriptions without receiving any complaints from subscribers."

Holtet reportedly blamed a subcontractor who delivers the papers for the problem and said he had minimal control over accounts and only passed the payments on, the Tribune reported citing the criminal complaint.

"Federal investigators later learned a recycling bin outside Holtet?s home regularly would be filled with old papers, many times still wrapped in bundles," the Tribune reported. "Holtet was released Tuesday and ordered to appear in U.S. District Court in Manhattan on Sept. 9."