QVC has sought permission to file an amended complaint in its lawsuit against its former director, who was convicted for his involvement in a kickback scheme, and the general counsel and president of the PR firm he dealt with.
In July, James Falkowski was sentenced to 30 months in prison for his fraud conviction. Federal prosecutors accused him of scamming the shopping network and running a kickback scheme with vendors that netted him a million dollars in products and cash.
Authorities claimed Falkowski bilked QVC out of hundreds of thousands of dollars to pay for personal expenses, including first-class travel and chauffeur rides, luxury hotel and resort stays, spa treatments, upscale restaurants, high-end clothing, Botox treatment and other luxuries.
Additionally, prosecutors accused Falkowski of convincing QVC to hire an outside Los Angeles-based PR firm, the Steinberg Group, and a New York-based production company, SPEC Entertainment, to launder money and create false invoices to hide the cost of his charges.
QVC subsequently filed a lawsuit against Falkowski. Now, it’s seeking to expand its claims to add additional elements that came to light during the prosecution of Falkowski and the Steinberg Group’s general counsel, Eric Waraftig, which the network said would support civil claims against Waraftig and Steinberg Group president Michelle Steinberg.
The Steinberg Group defendants’ attorney, Alan Epstein of Spector Gadon & Rosen in Philadelphia, did not respond to a request for comment. QVC’s lawyer, Maureen McBride of Lamb McErlane, also did not respond to a request for comment.
The indictment said Falkowski met with the executives of the companies he worked with, including Waraftig, and advised them on how to become QVC “vendor representatives,” which would earn them royalties from the network. Falkowski allegedly gave the executives confidential information from QVC that enabled them to negotiate a higher royalty percentage—and in exchange, Falkowski received a cut, roughly $240,000 total.
And according to the indictment, Falkowski was not shy about advocating for his share of the royalties.
“Let’s be clear of a few things: [...] You have a better deal [at QVC] than any other rep because of me solely,” Falkowski allegedly wrote in an email sent to both Steinberg’s president and general counsel.
Prosecutors said that Falkowski often used his ill-gotten gains to shower friends with tens of thousands of dollars’ worth of QVC products.
Some of his larger alleged expenses on the company dime included $200,000 in chauffeur services for himself and friends; approximately $28,000 in payments to a custom furniture maker for two tables for his Philadelphia apartment; and approximately $59,500 in pre-paid American Express, Tom Ford and Barneys New York gift cards for his own use. QVC fired him in 2013.
Falkowski’s legal woes began in 2015 when the Steinberg Group was sued by QVC, but the case was put on hold in November. Falkowski never responded to the network’s complaint with court filings of his own. As part of his sentence, Falkowski was ordered to pay QVC over $800,000 in restitution.