Jail Time for Former Focus Media Execs

LOS ANGELES Tom Rubin, the former chairman and CEO of Focus Media, was sentenced Wednesday to five-and-a-half years in federal prison for stealing up to $40 million from Sears and Universal Studios’ ad accounts.

Co-defendants Thomas Sullivan, Focus CFO, and Geoffrey Mousseau, an attorney, were sentenced to three-and-a-half years and 21 months in prison, respectively. U.S. District Court Judge Gary Feess said he would order the defendants to pay restitution to the victims, which include Sears and Universal, and scheduled another hearing for Jan. 29, 2007, to determine the specific amount.

“The victims sought to get satisfaction for the wrongs they suffered from the defendants for many years,” said Ranee Katzenstein, who prosecuted the case with fellow federal prosecutor Paul Stern. “As the judge said, the defendants used the court systems to further their wrongs. Finally, I trust, justice has been done.”

The sentencing all but concludes a legal battle that commenced in September 2004.

In the four-hour hearing that concluded around 7 p.m., Feess appeared unmoved by flowery testimony that painted Rubin as a devoted father, son, friend, pillar of the community and, oddly, helpless alcoholic. The courtroom was packed with 50-plus observers.

The government’s written submission to the court characterized Rubin’s narrative about himself as “calibrated to achieve a positive and empathetic effect on the court, perhaps not unlike that of a well-orchestrated advertising campaign.”

While Feess went to great lengths to justify why he determined a sentence that was lighter than the recommendation, he characterized Rubin as “the goose who laid the golden egg,” a person with “disrespect for the law and the legal process” who was driven by “substantial greed.”

Rubin was convicted of 25 felony counts including conspiracy, bankruptcy fraud and money laundering earlier this year.

In Rubin’s final statement, he said: “I am the most responsible person for the events that transpired.” He blamed “personal chaos” in his life “more than greed,” though he acknowledged that it might sound “implausible” given the amount of money involved.

The Focus Media executives were convicted of taking money from its advertising clients in 1999 that was intended to pay media outlets such as ABC and NBC, and using it for private purposes, such as taking bonuses and paying taxes.

According to the attorney’s office, Rubin and Sullivan continued to misappropriate funds to pay themselves, lawyers and Focus Media employees even after Sears and Universal obtained court orders in early 2000 prohibiting them from doing so.

During the course of the yearlong scheme, Focus received more than $50 million from clients, and less than $10 million was paid to media outlets. —with Gregory Solman