review of purchases made by Bailey Books from 2006 to 2008 showed that a continuously increasing
share of the company’s paper business was being given to Orion Corp., even though Orion
submitted written bids in only 63 percent of the cases.
On February 1, 2009, Mark W. Steinberg, CFO of Bailey Books, Inc., was interviewed. The purpose
of the interview was to inform him of the proposed fraud examination, obtain his approval, and
secure information from him regarding the purchasing process at Bailey Books. In addition to
summarizing his responsibilities regarding purchasing at Bailey Books, Mr. Steinberg stated that in
December 2006 he sent a memo to all the division heads at Bailey Books informing them that all
purchases over $50,000 would from then on require at least three written bids.
We next examined the personnel records. A review of Linda Reed Collins’s file showed only that she
had been consistently rated “exceptional” by her supervisors in annual reviews.
On February 4, 2009, an interview was conducted with Roger Donald McGuire, Purchasing Agent at
Bailey Books. After summarizing the purchasing process at Bailey Books, he stated that he had no
knowledge of any improprieties committed by Ms. Collins.
The next interview conducted was with Mary Rodriguez De La Garza, a coworker of Ms. Collins’s
in the Purchasing Department at Bailey Books. During the interview Ms. De La Garza stated that,
regarding the purchasing process, it is sometimes not practical to obtain bids, such as in emergency
situations or when they are short on time. She went on to reveal that she had suspected Ms. Collins
was having an affair with James R. Nagel, the salesman for Orion Corp. In addition, Ms. De La
Garza said she believed that Ms. Collins and her husband were having marital and financial
problems. She also mentioned that Sara Louise Dawson, a former employee under Ms. Collins, had
left on bad terms.
The next interview was with Sara Louise Dawson, who wanted to consult with her attorney before
making an official statement. Ms. Dawson’s attorney, Thomas C. Green, later contacted the Fraud
Examination Team to let them know that Ms. Dawson was interested in making a statement, but
only in exchange for an indemnity against all claims arising out of her cooperation. After meeting
with Mark Steinberg and Lincoln S. Wyzokowski, General Counsel at Bailey Books, Ms. Dawson’s
and Mr. Green’s proposal was accepted.