A federal grand jury has indicted the longtime former CEO of Subway's Independent Purchasing Cooperative on charges of defrauding the chain's franchisees of more than $80 million through secret vendor bribes and kickbacks.

Janet Risi Field, 66, and her brother, Steven Louis Risi, 70, were charged in the Southern District of Florida with taking concealed payments from vendors seeking contracts to supply food and other products to Subway operators. The Justice Department filed the charges.

Who controlled the buying power?

Risi Field ran the Independent Purchasing Cooperative (IPC) from 1996 through 2021, giving her direct authority over which vendors won contracts for supplies. Those contracts set the prices franchisees paid for core menu inputs, including meats, cheeses and cookies.

The indictment alleges Risi Field made secret arrangements with brokers representing vendors. Those brokers then shared a portion of their fees with the brokers themselves and with members of Field's family.

Risi Field, her brother and other family members allegedly used shell companies to conceal more than $60 million in payments. Prosecutors say the funds were laundered through shell companies and bank accounts.

Where did the money go?

The alleged spending pattern reads as a case study in diverted procurement economics:

• Remodeling and furnishing homes in Florida and North Carolina
• $400,000 in jewelry purchases
• Private club memberships
• $3.4 million in credit card expenses
• Roughly $25 million in slush fund payments to herself and co-conspirators

The indictment also accuses Field of having a co-conspirator fund a multimillion-dollar slush fund that paid $420,000 to a family assistant and more than $150,000 to Field's housekeeper and handyman.

What did the co-op's board know?

The charges center on concealment from the IPC's directors and franchisees. Risi Field hid the bribes from the organization's leadership, and the IPC remained unaware of the payments in 2021, when the board terminated her and paid a $6 million severance.

The indictment reaches back further. In 2011, Risi Field allegedly had a co-conspirator pay $8 million to settle a lawsuit brought by a former IPC contractor who claimed she had an inappropriate relationship with vendors. Field then concealed the allegations and the settlement's details from the board.

Subway has not responded to a request for comment.

What are the specific charges?

Risi Field and her brother each face conspiracy to launder money and two counts of using illegally attained money. Risi Field alone was charged with conspiracy to commit fraud and five counts of misusing her position for personal gain.

Is separate civil litigation pending?

Yes. The IPC last year sued Risi Field in Miami, along with several brokers and vendors, accusing them of defrauding operators of more than $200 million through kickback arrangements — a figure that dwarfs the criminal indictment's $80 million fraud estimate.

The criminal case will test how much of the alleged scheme can be proven beyond a reasonable doubt, while the civil suit seeks to quantify the full cost to franchisees whose supply prices were set through the tainted contracting process.