Debra Wong Yang
United States Attorney
Central District of California
United States Courthouse
312 North Spring Street
Los Angeles, California 90012
June 9, 2005
Thom Mrozek (213) 894-6947
Los Angeles, CA - The man who was in charge of the Public Affairs department in the Los Angeles office of public relations firm Fleishman-Hillard Inc. was charged today with three counts of wire fraud in relation to a scheme that led to the overbilling of the Los Angeles Department of Water and Power.
Steven Sugerman, 41, of Los Angeles, who was a senior vice president and who answered directly to Fleishman-Hillard's general manager, Douglas R. Dowie, has agreed to plead guilty to the charges. Sugerman has agreed to cooperate fully in the government's ongoing investigation.
In a plea agreement and information filed in court today, Sugerman says he was working at Dowie's direction from 2000 until he left Fleishman-Hillard in January 2002, when he caused inflated bills to be submitted to the DWP. Those bills led to the DWP being fraudulently overcharged more than $120,000.
He becomes the third former Fleishman-Hillard executive to be charged in the overbilling scheme.
Dowie, 57, of West Hills, and John Stodder, 49, of Palos Verdes Estates, were named last week by a federal grand jury in a 16-count superseding indictment. Dowie, who headed Fleishman-Hillard's Los Angeles office, and Stodder, who ran the public affairs group after Sugerman left the firm in 2002, have pleaded not guilty to the charges in the indictment. Dowie and Stodder are scheduled to appear in court Monday to receive a trial date.
The superseding indictment, which charges Dowie and Stodder, alleges that Fleishman-Hillard submitted well over $300,000 in fraudulent bills to the DWP from January 2000 through January 2004. The indictment also alleges that several other Fleishman-Hillard clients were overbilled as part of the scheme. Those clients are the Port of Los Angeles, Gehry Partners LLP, and the World Wide Church of God.
Sugerman has agreed to appear in United States District Court in Los Angeles on July 5. The three wire fraud counts carry a maximum possible penalty of 15 years in federal prison; however, Sugerman's actual sentence will be determined by the court.
The case is the product of an ongoing, joint investigation by the Federal Bureau of Investigation, the United States Department of Transportation and the Los Angeles County District Attorney's Office Bureau of Investigation. The prosecution is a collaborative effort between the United States Attorney's Office and the Los Angeles County District Attorney's Office. Fleishman-Hillard, Inc. has cooperated in the investigation.
Release No. 05-090
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