Time Warner Accused of Exaggerating for Merger
by Chris Fry
Courthouse News Service
Friday, December 11, 2015 9:31 AM PT
Read the full article at: http://www.courthousenews.com/2015/12/11/time-warner-accused-of-exaggerating-for-merger.htm
HACKENSACK, N.J. (CN) – Aiming to boost its stock for an upcoming merger, Time Warner Cable fired workers who resisted inflating subscriber numbers, five ex-employees claim in court.
The lawsuit filed in Bergen County Superior Court comes seven months after Charter Communications announced a plan to buy Time Warner Cable in a cash-and-stock deal that would make it the second-largest Internet and cable company in America.
Time Warner Cable shareholders approved the company’s $56 billion takeover by Charter Communications on Sept. 21.
Meanwhile the five recently fired Time Warner employees now suing the company estimate that the Time Warner and Charter Communications merger is “worth approximately $79 billion.” Their complaint is the Top Download for Courthouse News on Friday.
All former direct sales supervisors or managers of field sales at Time Warner, the five fired workers say that Time Warner sales reps were on the front lines of the fraud, but that encouragement for the practice came from higher-ranking executives.
The plaintiff workers claim to have a January 2015 email from Chris Van Name, the executive vice president of sales channels, that “specifically instructed sales representatives of TWC to ‘pull out all the stops’ and ‘get sales at any cost’ to ‘increase’ the volume of sales.”
Suing in Bergen County Superior Court, the employees say sales reps facilitated the fraud by creating “multiple TWC service accounts at the same location … under identities of various people living at the same location.”
They also created accounts “under incorrect or false social security numbers” and “under identities of people who were no longer living at said location,” the Dec. 1 complaint states.
Other times, employees created accounts under the names of people “whose accounts had previously been frozen or terminated due to ‘non-payment,’ but who still maintained [TWC's] cable service equipment,” according to the complaint.
The plaintiffs say senior human resources generalist Marielys Mejia sent an email in November 2014, telling employees that Time Warner Cable would not suspend anyone accused of creating fraudulent accounts.
Behind the drive to create fraudulent subscribers, Time Warner hoped “to falsely inflate stock prices for the benefit of a potential merger with Charter Communications,” according to the complaint.
The plaintiff workers claim that they flagged the fraudulent “non-pay” accounts on several occasions, but that their supervisors “failed to properly investigate, address or report” the illegal activity.
One of the plaintiffs, Gregory Klein of Staten Island, N.Y., says sales director Lynden Armogan went so far as to mock him at a company dinner in March 2015.
“You should stop being so damn conservative all the time,” Armogan said, according to the complaint, allegedly telling Klein that “there is no need to do everything by the book” in front of co-workers.
Frederick Fischer, a plaintiff hailing from Somerset, N.J., contends that he attended a mandatory meeting in May 2015 where Armogan and Senior Vice President Blaine Altaffer “instructed the employees present to increase subscriber numbers so stock prices would rise within the next 120 days.”
With the plaintiffs vocally objecting to the “illegal, fraudulent activity,” they say Altaffer even threatened Fischer “by hostilely stating to him this is ‘a career making time for you, don’t blow it.’”
Another plaintiff, Nicholas Warren of Fort Lee, N.J., says he inquired in March 2105 about Time Warner installing a computer system that would prevent the creation of fraudulent customer accounts. He says Armogan “threatened” him by saying, “Get out of here, you should not be concerned with this.”
That May, Warren allegedly informed Armogan again that the company should have a computer system in place to verify customer identities and prevent the fake accounts. He says Armogan “angrily” told him such a move would compromise sales.
“Get out of here and never bring this up again,” Armogan said, according to the complaint.
Aside from the accusations related to inflated accounts, plaintiff Raymond Bailey, of Hackensack, N.J., also alleges a count of sexual harassment.
Bailey says he attended a Time Warner dinner at which Armogan began “rubbing his buttocks up against [his] leg at the event in front of his co-workers and wife.”
Armogan “continuously and systematically made romantic and sexual passes” at Bailey following the incident, the complaint states.
Time Warner fired the five workers behind the lawsuit on Sept. 10, according to the complaint.
The plaintiffs, three of whom sued with their wives, seek damages for retaliation under the New Jersey Conscientious Employee Protection Act. They are represented by Rosemarie Arnold of Fort Lee.
Time Warner spokesman Keith Cocozza did not return an inquiry regarding the lawsuit.
Each of the supervisors mentioned in the article is a defendant to the action, which takes aim at a total of 12 individuals plus Time Warner and its corporate affiliates.