Former Dunkin' official indicted

Franchisees call for greater oversight

Dunkin' Donuts franchise owners yesterday called for new oversight over the Canton coffee chain following the federal indictment last week of a former executive allegedly involved in a kickback scheme.

According to the indictment filed in US District Court in Boston, Carolyn Kravetz, 42, former director of external communications at Dunkin' Brands Inc., steered contract work totaling $400,000 to a close college friend, Boris Levitin, in exchange for 50 percent of his gross receipts between August 2004 and October 2005. Levitin, 43, was self-employed, doing business as Luminophore, providing graphic design, technical publishing, and information system services.

Kravetz allegedly authorized payments for $396,875, including payment in full for multiple projects on which Levitin had performed no work. In turn, Levitin kicked roughly $200,000 back to Kravetz, according to court records. The funds Dunkin' paid to Luminophore came from the advertising fund, which is financed by contributions from franchisees, according to the Dunkin' Donuts Independent Franchise Owners, the nation's largest association of franchise owners.

Kravetz and Levitin, who both attended Boston University during the 1980s, were charged with six counts of mail fraud, and Kravetz was charged separately with two additional counts of making a false tax return.

Kravetz, reached by cellphone, declined to discuss the matter and referred questions to her lawyer, Joseph Balliro, who did not return calls seeking comment. Jeffrey Lichtman, Levitin's lawyer, said his client returned all of the money paid to him and Kravetz.

"She's the one that made the arrangements. He never once looked to skirt any of the work and never wanted a dime more than he was paid for," Lichtman said of his client.

Stephen Caldeira, Dunkin' Brand's chief communications officer, said in a statement that Kravetz was responsible for day-to-day communication with print and broadcast media, as well as supporting the marketing staff with promotions.

"We detected the fraud and promptly reported it to the authorities, and we have recovered all monies," Caldeira said. "We take very seriously our obligation to protect the brand for the benefit of all customers, franchisees, and employees."

The Dunkin' franchise association, in a press release yesterday, demanded greater controls over the franchisee ad fund by franchisees and regular audits by an independent certified public accountant that are made available to all franchisees.

"Dunkin' Brands acts as ad fund fiduciary on behalf of its franchisees, which hold the integrity of their ad fund as near-sacrosanct. That such an alleged breach occurred is totally unacceptable," Mark Dubinsky, president of Dunkin' Donuts Independent Franchise Owners, said in a statement. "The DDIFO feels that appropriate controls of the ad fund, including direct franchisee oversight and CPA audit, must be instituted immediately."

Caldeira said in a statement that Dunkin' has regular independent auditing of its financial statements, including the advertising fund.

"The DDIFO may not be aware that we have such controls," Caldeira said in the statement.

Jenn Abelson can be reached at abelson@globe.com.