LOS ANGELES: After five days of deliberation, a federal jury returned Tuesday with verdicts in the trial of former Fleishman-Hillard Los Angeles executives Douglas Dowie and John Stodder: guilty on all counts.
The jury found former Fleishman GM Dowie guilty on 14 counts of wire fraud and one count of conspiracy. Stodder, the firm's one-time SVP public affairs, was convicted of 11 counts of wire fraud and one count of conspiracy.
The wire-fraud charges each carry a maximum penalty of 20 years in prison, and conspiracy carries a maximum penalty of five years, in addition to fines. A sentencing date has not been set.
Indicted last year following a government investigation, Dowie and Stodder were charged with scamming Fleishman clients out of more than more than $300,000. Allegedly defrauded accounts include the Los Angeles Department of Water and Power, the Port of Los Angeles, the Worldwide Church of God, and the firm of architect Frank Gehry.
"We're pleased with the verdict," said Assistant US Attorney Adam Kamenstein, who along with Assistant US Attorney Cheryl O'Connor Murphy represented the government throughout the proceedings.
"We're very disappointed," said Tom Holliday, the lead of Dowie's three-attorney team. "Doug's a good man, a proud man who's seen a lot, from Vietnam forward."
But Dowie understands "there are bumps in the road," Holliday said, "so now we move ahead, take the next steps."
Those steps, he said, include filing motions for hearing and appeal, to be submitted next month.
Stodder's lead lawyer, Jan Handzlik, echoed Holliday's dissatisfaction with the trial's outcome.
"We are deeply disappointed by the jury's verdict," Handzlik said in a statement. "We continue to believe that John was a victim of Fleishman-Hillard's chaotic and haphazard billing practices, and that he never intended to cheat or
Over the course of the five-week trial, overseen by US District Judge Gary A. Feess, 15 witnesses were questioned regarding their roles in the alleged conspiracy. Employee timesheets, chicken-scratched billing records, and a string of emails revolving around the word "pad" were the center of attention. Neither Dowie nor Stodder--both who pleaded not guilty--took the stand on his own behalf.
As news of the verdict trickled through the PR community, initial reactions ranged from surprise to sadness. And although St. Louis-based Fleishman was never charged with a crime, it too, issued an apology.
"We deeply regret that improper and indefensible bills were presented to several of our Los Angeles clients, and we again apologize to the residents of Los Angeles," said Richard Kline, Fleishman regional president, senior partner, and Los Angeles office GM, in a statement.
"Beginning in 2004, when questions were first raised about billings in our Los Angeles office, we have taken numerous steps to avoid the possibility of something like this ever occurring again. We also have publicly apologized and settled all claims with the City, reimbursing the City for more than the amount of the indefensible bills. We have completely replaced the leadership of the FH-LA office."