Business Notes FRAUD

In the takeover-crazed 1980s, a cheeky business-school dropout named Donald Carter transformed the humdrum job of counting ballots at corporate shareholder meetings into a multimillion-dollar business. As head of the Carter Organization, he orchestrated campaigns to persuade shareholders to back corporate raiders. For his work, he collected ten times the going rate. But the proxy prince scooped up some illegal gravy as well. Last week in a New York State court, Carter pleaded guilty to stealing $1 million from his clients through false billing.

During his heyday, Carter employed out-of-work actors to call up corporate shareholders to try to sway their votes. "Actors know how to talk and when to listen," he claimed. In 1987 he sold his firm to a British ad agency for $76 million. Carter resigned from the organization in January, a year after learning about the investigation of his dealings. Now he faces up to four years in jail, and his former company has posted steep losses as clients defect to other firms.