LOS ANGELES: Fleishman-Hillard has won a change of venue in the lawsuit brought against it by the city of LA that claims the firm overbilled by $4.2 million on its work for the Department of Water and Power (DWP).
The decision comes less than a week after federal authorities indicted a former senior Fleishman executive, John Stodder Jr., on wire fraud charges related to the same account.
Stodder, who headed Fleishman's public affairs practice from 2002 until earlier this month, was charged with 11 felony counts of wire fraud and later released on $10,000 bail. Each count carries a possible 20-year prison sentence.
Stodder's indictment also charged that overbilling took place on other government and private Fleishman contracts, including work for the Port of Los Angeles, the Worldwide Church of God, and architect Frank Gehry's firm.
In addition, the indictment mentions two "co-schemers," who are not identified by name.
The change of venue was sought by Fleishman on the grounds that negative publicity around the case and its position as an "outsider" to the city would make it impossible to find an impartial jury. Without hearing oral arguments, a judge on Wednesday agreed to move the civil case to an undetermined location, although Fleishman has said it would like it moved to Ventura County, north of LA.
The city attorney's office, which filed the suit, expressed surprise at the decision, but did not think that it would impact the case.
"We are sure a jury in any county can see overbilling and fraud," said Assistant City Attorney Susan Lopez-Giss.