In a trial that has sent shock waves throughout the PR Industry, jurors have found former Fleishman-Hillard execs Douglas Dowie and John Stodder guilty on all counts. Dowie, was convicted Tuesday of 15 counts of conspiracy and fraud in a scheme to overbill Los Angeles taxpayers for public relations consulting services. Stodder was convicted of 12 similar charges.
The foreperson said a combination of precise billing records and e-mails presented by prosecutors convinced jurors of the existence of the criminal enterprise. Another juror cited a series of e-mails among Dowie, Stodder and other Fleishman-Hillard executives in Los Angeles and the firm's headquarters in St. Louis. In them, Dowie asked that the billing be "padded" to help meet monthly revenue projections, and Stodder repeatedly directed his subordinates to bill more time to the city.
Dowie and Stodder were indicted last year after seven former Fleishman-Hillard employees told The LA Times they were encouraged -- sometimes told -- to falsify the hours they worked on the Department of Water and Power account.
The defendants' former colleagues said each repeatedly justified their billing practices as "value billing," which they described as charging for the value of the services provided rather than the hours worked. Witnesses for clients, including the DWP, testified that their contracts specified billing hourly.
Billing sheets and invoices dominated the trial, along with 1.2 million e-mails Fleishman-Hillard surrendered.
Testifying under a grant of immunity from prosecution, Monique Moret, a former Fleishman executive, spent 14 hours on the witness stand implicating Stodder in the overbilling scheme.
The Fleishman-Hillard scandal has had a broad effect on the public relations industry. Mike Cherenson, an official with the Public Relations Society of America, said, "The entire profession has taken note of this case." PRSA put out a memorandum to its 20,000 members reminding them to only "charge for the work we do," Cherenson said.
Each man was convicted of one count of conspiracy, which can be punished by five years in prison. Dowie's 14 wire fraud convictions and Stodder's 11 are punishable by prison terms that range up to a maximum of 20 years per count. A sentencing date was not set.
Can't remember the last time I went on a bender. A whole week gone! Wow. Daze of Wine and Dilaudid. I certainly do have a sweet spot for all things opium.
Anyway, what started as a simple client junket to the Gourmet House Wares Show in Vegas, ended up a 4-day fête of drugs and debauchery in Palm Springs. At least I got the pipes cleaned. We so needed it.
Well, of course, on my return home, depression set in. I''ve been in bed for three days now. But it has given me some needed time to reflect. For the many readers here as well as for myself, we need to answer a few questions: What's Strumpette really about? Is it time to take the brush away from the easel? Where can we go from here?
I should have something written up for later today or tomorrow.
On Thursday, March 8, 2007 at 7:41 AM, Ronn Torossian, President and CEO of 5WPR, emphatically promised that he was going to sue us. No real reason, he was just irritated by our teasing him about getting in bed with pornographer Joe Francis. Anyway, Ronn gave his obscenity-laced word that we'd see the complaint in 72 hours. It's now late by
Kathleen Durazo about A Measly $2.8 Million Goes Missing, Lawsuit Results Fri, Jul 31, 10:58:34 AM Ray Durazo (the founder) sold the company to Dan in 1999. He was not involved in any of this. He (and I) found out about the lawsuit in the LA Times. In addition to embezzling this m [...]