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State report reveals kickbacks in Denver

Yet still another issue with former Denver Volunteer Fire Department Chief Richard Marley has “crept up” again, according to current chief Jay Flynn.
This time, it involves $11,000 worth of cleaning supply purchases from a telemarketing company called Stone Cold Chemicals.
“The problem is that Marley received kickbacks or premiums for his purchases,” said Flynn in a telephone interview Monday.
According to an email Flynn sent the Lincoln Times-News, the purchases were made between Aug. 1998 and June 1999.
“This was the same time frame that Marley’s misuse of funds were discovered through an in-house review of our books,” said Flynn.
Marley was dismissed later in 1999 for taking some $5,000 for his personal use according to the email.
The amount of the 12 total purchases Marley made from Stone Cold, according to the state auditor’s report released in February, were $10,865.24 with $883.55 of premiums given to Marley.
While Kris Bailey, general counsel to state auditor Leslie W. Merritt, could not speak specifically to what exactly Marley received, he called the company Marley was dealing with a “boiler-room company.”
“In contacting customers, they would ask them what hobbies or interests they like, then they would follow that by saying they’d send a case of Peachy Clean Bathroom Cleaner or Hand Jive Hand Sanitizer,” he said. “Stone Cold representatives would then ask where the premiums would be sent and many people would have the premiums sent to their homes.”
Bailey added the product was overpriced four to 10 times the market value.
“Some of these products virtually have no value. I call them ‘dollar store’ type items that were close to worthless,” said Bailey.
Points were then assigned for each purchases, then the points were redeemed for the premiums.
According to Bailey, the premiums – unlike the chemicals – had value.
“Premiums included Red Lobster, Outback Steakhouse, Target and Wal-Mart cards as well as other premiums for golf and hunting equipment,” said Bailey. “We even had a couple of people save up premium points to get cruises and Atlanta Braves baseball tickets.”
Bailey added that the job to coordinate those kickbacks fell to one person inside the company.
“They had a person internal inside Stone Cold that would gather the points then send the clients kickbacks.”
Back in Denver, Flynn said the fire department received the information on Marley as part of the state auditor’s report.
“We immediately turned the findings over to the Lincoln County Sheriffs Office for review,” said Flynn. “They found there was no criminal wrongdoing and thus, no basis for charges.”
Flynn added that several years ago, business practices in dealing with vendors changed “but not as a result of this.”
“We typically do not deal with telemarketers,” said Flynn. “If we need something, we go out and get it.”

by Jon Mayhew

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