A former marketing director for QVC — who was scheduled to begin serving a 30-month sentence on Sept. 14 for embezzling $1 million from the company — may face additional fraud and racketeering allegations.
QVC this week filed an amended civil complaint alleging that the director, James D. Falkowski, conspired with a public relations company to reap enormous cash kickbacks. QVC had initially filed suit in 2016 alleging fraud and conspiracy but the home shopping network's case was put on hold when the federal government stepped in to prosecute on criminal charges.
Falkowski, 43, who claimed that drug addiction fueled his crimes, pleaded guilty to 11 counts of wire fraud in July.
QVC's rejuvenated case includes new allegations of wrongdoing uncovered during the federal investigation.
The complaint alleges that Falkowski, who worked at QVC's headquarters in West Chester from 2008 to 2013, conspired with a Los Angeles PR company called The Steinberg Group (TSG) to funnel the money to him so that he could support his lavish lifestyle. The amended document names Eric Waraftig, the attorney for TSG, and Michelle Steinberg, the president of TSG, for the roles they played in the fraud. Waraftig and Steinberg are a married couple.
According to QVC, Falkowski hired TSG in 2008 as an outside press relations arm, paying it $11,000 a month to raise brand awareness for the home shopping network through "event-driven marketing." During the same period, TSG secretly paid Falkowski as a consultant, according to court documents.
Two months after Falkowski was fired in 2014, TSG billed QVC for various charges. As a result, QVC auditors discovered Falkowski was seeking reimbursement for chauffeured limousines for his personal use. In the investigation that followed, QVC discovered more than $500,000 in inappropriate charges that included high-end clothing, travel, and spa treatments. The company alleges that TSG issued fraudulent invoices at Falkowski's direction that did not reveal the true nature of the expenses.
According to the complaint, Steinberg and Waraftig had incentive to keep Falkowski happy, "lest they risk Falkowski causing QVC to terminate its agreement with TSG."