Courts:

Ad exec sues publisher of ‘What’s On’ tourist mag

Thursday, Sept. 24, 2009 | 11:30 a.m.

What's-On.com

An advertising executive is suing the publisher of tourist magazine "What's On, The Las Vegas Guide,'" charging she was fired after complaining about alleged irregularities including what she claims were inflated circulation numbers.

Tammy Scarpati filed suit Tuesday in Clark County District Court against Kellogg Media Group LLC.

Andrea Collier, vice president of operations at Kellogg Media, said Thursday she couldn't comment on the lawsuit except to say the company's circulation numbers are audited. A message seeking comment was also left Thursday with David Peeler, Kellogg president and group publisher.

A company press release announcing the hiring of Scarpati and other executives in February said: "Tammy L. Scarpati provides more than 13 years of sales management experience in the publishing arena and expertise in her ability to successfully form partnerships and build relationships to facilitate exceptional and profitable publications. Scarpati’s knowledge of creating custom advertising programs, publications and inserts, as well as multi-platform advertising opportunities specific to client needs, has proven her approach to be influential by showing increased growth in new business development and annual revenues.''

Scarpati now says in the lawsuit that before and after she was hired as director of media sales she was advised that Kellogg published 205,000 copies of "What's On,'' but later learned fewer than 50,000 copies were being printed and circulated.

The lawsuit claims Kellogg has provided false information to the Audit Bureau of Circulations and that she learned of other alleged problems regarding other aspects of the business involving employees' health and workers' compensation insurance and their retirement accounts; and numerous other issues.

A spokesman for the Audit Bureau of Circulations in Schaumburg, Ill., on Thursday said its circulation number for the twice-monthly "What's On'' was 204,804 as of December 2008.

The lawsuit, filed by attorney Sharon Nelson, says Scarpati was fired Sept. 3, one day after complaining about alleged problems at the company. The suit alleges Scarpati's discharge was retaliatory and alleges infliction of emotional distress and breach of contract.

"Plaintiff complained about and refused to participate in activities which plaintiff, in good faith, believed to be illegal," the suit said. It claims Kellogg asked "plaintiff to engage in fraudulent activities with respect to advertisers'' and that she was fired "in retaliation for her refusal to engage in illegal activity."

This is the fifth lawsuit to be filed in Clark County District Court against Kellogg Media during the past 13 months.

In August 2008, City National Bank sued Kellogg Media and Peeler, claiming Kellogg was delinquent on a loan with a balance of $298,000; and that Peeler had failed to resolve the delinquency as a guarantor.

Attorneys for Kellogg Media and Peeler filed a response to that complaint in March disputing the allegations.

In April of this year, landlord CIP Hughes Cheyenne Fixed Portfolio LLC sued Kellogg Media, claiming it breached a lease agreement and owed some $44,000 for office space. The suit said Kellogg had been evicted in March from the space at 980 Kelly Johnson Drive, Suite 100.

In a July court filing, attorneys for Kellogg Media disputed the breach of agreement claims, saying: "The economic recession has destroyed the fundamental purpose of the lease agreement. The economic recession has rendered performance of the lease agreement impracticable."

Also in April, Kellogg Media and Peeler were sued by Creel Printing & Publishing Co. over allegations Kellogg had a past-due balance of more than $800,000 for the printing of "What's On" and that Peeler was delinquent on a $50,000 loan to him from Creel.

Court records show the defendants have not filed responses to that suit and that Creel moved in July for entry of a default judgment.

Earlier this month, Kellogg was sued by three former "What's On" executives claiming Kellogg owed about $10,000 to cover arbitration costs in a dispute between the former executives and Kellogg. The dispute involved Kellogg's cancellation of consulting contracts with the executives. The arbitrator found Kellogg was justified in canceling the consulting contracts, but said the parties had to share the arbitration costs.

Kellogg has not yet responded to the lawsuit over the arbitration fees.

Discussion: 25 comments so far…

By anthemccresident

9/24/09 at 4:53 p.m.

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You mean I don't have to pay my rent if I can't afford to do so?
By lasvegenconcerned

9/24/09 at 7:52 p.m.

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You mean I don't have to pay the printer for printing magazines,or pay someone for money that was borrowed?
By stevem

9/24/09 at 11:30 p.m.

Comment removed by staff.
By stevem

9/24/09 at 11:33 p.m.

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also...these tourist magazines are dinosaurs.
By stevem

9/24/09 at 11:45 p.m.

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oh...and this will be my last comment...

couldn't they just get the invoices from creel printing and see how many they are really printing?
By VegasFan

9/25/09 at 2:35 a.m.

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Well researched and well written. Only qualm -- no mention of possible conflict of interest. What's On has only one major competitor in this market -- Las Vegas Magazine which is owned by the Greenspun Media Group. Having your rival publication inflate circulation numbers will make your sales with verified circulation numbers much easier. Not that this isn't a newsworthy story, but most people don't know you are rivals and that their downfall will be a windfall for GMG. A quick disclosure within the text or at the bottom would probably be appropriate.
By johnvegas

9/25/09 at 6:31 a.m.

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You do not make sense VegasFan. The circulation numbers were provided in the lawsuite. Also, What's On has more competitors then Las Vegas Magazine. You forgot about Where and 24/7. You should get your facts in order.
By stevem

9/25/09 at 6:49 a.m.

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hey vegasfan...saying "what's on" is a competitor to "lvm" is like saying "poker palace" is a competitor to "caesars palace".
By VegasFan

9/25/09 at 8:01 a.m.

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so whats the harm in disclosure again?
By BobbyPeru

9/25/09 at 11:39 a.m.

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My hat goes off to this woman. She shouldn't be selling for the company, she should be running it. Fight the power.
By Michelle10

9/25/09 at 2:56 p.m.

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In response to Steven-They could be printing that many copies but not distributing them.
By YRFan1102

9/25/09 at 4:11 p.m.

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VegasFan: I agree with you about the need for full disclosure by The Sun.

Michelle10: You very well could be correct about the copies being printed and not distributed. Creel would most certainly threaten to go public about the qty printed if it was less than What's On claims after What's On became delinquent. Somewhere out in the desert there may be hundres of thousands of copies buried.

Regarding the comment that "The economic recession has destroyed the fundamental purpose of the lease agreement. The economic recession has rendered performance of the lease agreement impracticable:" What BS!! I can't believe an attorney would actually make that argument. Totally lame!!

SteveM: Although you make a a good point about What's On and LVM not being of the same caliber, I work in the biz and until a few years ago, these magazines were considered the top two in the market for buyers I know, so yes, they are (or were) competitors, though certainly not the only competitors in this market. Regarding these tourist mags being dinosaurs, I agree with you to some extent, but I wouldn't be buying them (albeit in a reduced amount lately) if they didn't work. Tourists still need and use the info they contain. Not every vactioner brings a laptop with them to look this info up.
By stevem

9/25/09 at 5:58 p.m.

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interesting how my first comment up there was deleted by the staff...yet it contained no profanity or spam.

i advertised in what's on...i asked why the number of copies they SAID they distributed was so much higher than the number of hotel rooms in the hotels they said they were in and i got threatened with a lawsuit.
By Vegasvampire

9/25/09 at 8:30 p.m.

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Those tourist mags have the best coupons. But are placed on most hotel rooms or racks on racks near the front desk.
By lasvegenconcerned

9/26/09 at 5:31 a.m.

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Steve you got threatened with a law suit and all you did was sit on the sidelines and let them threaten you? Why didn't you prove them wrong if you were obviously right? More importantly who threatened you, Peeler? Are you afraid of Peeler?
By VegasNative702

9/26/09 at 1:23 p.m.

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I wish the writer of this story would have brought up the fact that Kellogg Media bought the magazine three years ago from the very well established (and honest) Hertz publishing family. I have done business with What's On for many years and I know the Hertz's would have never let their magazine fall into such a predicament. After they sold the magazine, our advertising started to go down the toilet. It's such a shame to see this happen and I hope this Kellogg Company get what they deserve. I'm very happy after reading this article that I pulled my advertising when I did. Shame on you Kellogg.
By stevem

9/26/09 at 1:31 p.m.

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at that time i was new business and had to "pick my battles". yes, i COULD have taken them to court, but the time and money i would have lost from being diverted from my new business would have been more than the cost of the advertising.

however...honest...now that it seems like FINALLY there seems to be evidence out there that i was totally correct in my accusations of "creative" circulation numbers...i am re-thinking my decision not to take them to court. i really am.

i'm thinking of sending a certified letter demanding a refund of my ad dollars because they have been unable to show clearly and factually ( an ABC audit statement is a joke ) what i got for my money.

and i want to make it CLEAR that my advertising was done AFTER the hertz family sold it to kellogg media group!
By exposepeeler

9/27/09 at 1:09 p.m.

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All the media outlets need to contact Peeler's VP of Operations, Aundrea Collier. Why does she keep on saying she can't comment when we know she can. How much does she really know? You can call her, but Peeler doesn't pay his bills and Kellogg's office phones were disconnected. How much money does Peeler owe many others in Las Vegas? Freelance writers, staff etc. This case needs to be the foundation to expose peeler on all the horrible things he has done to past staff,(Rick Becker, Leah Koza, Laurie Bichshel) businesses and his current staff. There is more to Tammy Scarpati's story. The story of deceit, theft and peeler bringing his "PONZI" schemes to Las Vegas needs to come out. Great job Ms. Scarpati for taking a stand against someone who does not deserve to do business in Las Vegas.
By exposepeeler

9/27/09 at 1:15 p.m.

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We understand that Peeler frequents Las Vegas. Since you can't call him, go and catch an interview at his offices before the doors close.
6835 South Eastern Ave.
Las Vegas, Nevada 89119
By exposepeeler

9/27/09 at 4:56 p.m.

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Maybe the Hertz Family should contact some of the former and current employees at Whats On and join forces? I'm sure this could prove to be beneficial to the Hertz family and their ongoing fight to get paid by Peeler. There are several major casinos ready to launch an investigation against Peeler and his associates. C'mon past and current staff, step up and be a part of the truth. How many lawsuits can Peeler defend himself in. Over 20 freelance writers,15 past employees,20 current employees, MGM and Harrah's. WOW! We know his home addresss and where he has hidden all the funds drained from Las Vegas and Whats ON. Thanks to his current bookkeeper, this has been the easiest information to obtain. All you have to do is show up to a all you can eat pasta session with Whats On employees and current Greenspun staff @ Sergios on most Wednesdays, and you get the entire scoop. Maybe Peeler could land a job scoopin poop for a livin' when this is all "Exposed". Lookin forward to the outcome. Go back to New York and take from your own community Peeler.
By exposepeeler

9/29/09 at 7:27 a.m.

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I finally got to hear all the taped conversations with Peeler's past staff. Exciting and incriminating. I wonder how Peeler is going to defend all of that evidence once presented? I also got to listen in on several conversations between Peeler and his distribution guy. Why lie about everything? And more important, why have your staff be a part of all the untruths?
By Bajababy

9/30/09 at 11:23 a.m.

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The Hertz family ran a great operation. I bought advertising for years in What's On. I was so dissapointed in the rag it had become I no longer buy it, and I never felt comfortable after the family sold the publication. Integrity was missing in my opinion and it looks like my intuition was right. Kudos to Tammy!
By BobbyPeru

9/30/09 at 11:20 p.m.

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The David Peeler saga continues...now with a new cast of former Greenspun Employees...Hmmm. We'll have to see how this one turns out. Could be an interesting association.
By exposepeeler

10/1/09 at 12:53 p.m.

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Whats on has become the land for inept misfits that couldn't keep their jobs at Greenspun. We hear throught the grapevine that several more, newsworthy lawsuits are being filed in District Court next week. I have heard that the information listed within the suits is going to completely amaze the Las Vegas community and show all of the advertisers what a monster/thief Peeler really is. "The land of the GMG misfits being led by Bernie Madoff, commonly referred to as David Peeler". Hey Peeler, Do you look good in stripes? Hope so.
By exposepeeler

10/1/09 at 1 p.m.

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Let's get an interview with Allan Creel? Somebody want it? How about Creel's sales rep, Micah? What do both of these guys have to say about what Peeler was printing? Are they getting subpeonas? Where is Peeler printing his 30,000 Whats on magazines now? I think the remaining advertisers should show up where the magazine is printed and do some spot checking or lest say counting of the "audited 205,000 copies".
Thoughts? If Peeler is for real, he won't mind, right?