LOS ANGELES: Doug Dowie, Fleishman-Hillard?s former Los Angeles GM, has been indicted on charges that he helped pad bills by thousands of dollars on both city and private contracts.
On Thursday, Dowie was indicted on one count of conspiracy and 15 felony counts of wire fraud. The charges are part of an amended complaint against former Fleishman VP John Stodder, Jr., who was indicted earlier this year on 11 counts of wire fraud. Stodder has pled not guilty. Each count of wire fraud can carry a penalty of up to 20 years, and the conspiracy charge carries a maximum penalty of five years.
Dowie is expected to surrender to authorities and be arraigned on Friday.
The indictment alleges that Dowie and Stodder, along with a conspirator ? now said to be a woman -- identified as ?C-2,? added over $300,000 to bills between January 2000 and January 2004 for the agency?s contract with the LA Department of Water and Power (DWP). The overcharges pre-date Stodder?s time with the firm, and some of the padding was done without his aid.
Specifically, the indictment charges that when actual billings failed to meet forecasted revenues, Dowie, Stodder, and C-2 would add ?write-ups,? or extra hours to timesheets. These padded hours ranged from about $6,000 in some months, to as much as $46,277 in August of 2003.
The conspirators often communicated by e-mail, and in a September 2003 exchange, C-2 informed Stodder that she needed to add hours across the board to ?just about everyone that will pass the smell test,?? according to the indictment.
In response, Stodder told her, ?Thank you. I totally understand.? Later that month, the DWP was overcharged by $9.975, according to the indictment.
The indictment also said similar bill padding took place on accounts for the Port of LA, The World Wide Church of God, and Gehry Partners, the design firm of architect Frank Gehry.
Dowie was placed on leave from the agency in July 2004 and left the firm in January 2005, and has since filed a wrongful termination suit asking for about $6 million dollars, claiming he has been used as a ?scapegoat.?
In April, Fleishman settled a civil lawsuit over the matter with the city by agreeing to pay $4.5 million in cash and $1.2 million in forgiven bills. Fleishman regional president Richard Kline said that the firm?s clients and employees had been informed of the situation. He added that while ?no organization is immune to somebody violating its policies, the agency has ?worked really hard to make it highly unlikely that actions like those alleged here could happen again.?
The indictments are part of an ongoing investigation into a possible ?pay-to-play? environment in the administrator of former LA Mayor James K. Hahn, where lucrative city contracts are suspected of being given to political contributors.