First indictment handed down in Fleishman LA overbilling scandal

LOS ANGELES: A former Fleishman-Hillard senior executive was indicted yesterday afternoon by a federal grand jury on charges that he helped defraud the LA Department of Water and Power (DWP) of $250,000.

LOS ANGELES: A former Fleishman-Hillard senior executive was indicted yesterday afternoon by a federal grand jury on charges that he helped defraud the LA Department of Water and Power (DWP) of $250,000.

John Stodder, who led the DWP account and headed Fleishman?s LA public affairs practice from 2002 until last week, was charged with 11 felony counts of wire fraud. Each count carries a possible 20-year prison sentence.

The indictment also charged that overbilling took place on other government and private Fleishman contracts, including work for the Port of Los Angeles, the World Wide Church of God, and architect Frank Gehry?s firm.

In addition, the indictment mentions two ?co-schemers? who are not identified by name. The indictment says that if monthly billing forecasts were not met, Stodder and the co-schemers would add hours.

"On those occasions when the legitimate billings were less than that which had been forecast, defendant Stodder and other unindicted co-schemers...fraudulently increased and caused others to increase [Fleishman LA] billings by altering the billing worksheets to reflect a greater number of hours than [Fleishman LA] employees actually had worked and recorded," it reads.

The indictment cites an example in early 2003 in which a ?co-schemer? allegedly asked Stodder to pad a DWP bill by $30,000. Stodder allegedly replied ?that $30,000 was more than the system could bear, but that another co-schemer had informed him that they could slip through another $15k without incurring too much more scrutiny.?

Stodder?s attorney, Jan Handzlik, said his client denies the charges.

Fleishman regional president Richard Kline issued a statement saying, ?We're saddened and deeply disappointed that a former employee has been charged with wrongdoing. Fleishman-Hillard would never condone any of the activities alleged in the indictment.?

Stodder is expected to appear in court on Friday for a bail hearing.

The indictments come from a joint investigation with the Federal Bureau of Investigation, the US Department of Transportation and the Los Angeles County District Attorney?s Office.

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