Ad Execs Convicted of Defrauding Studios

LOS ANGELES A federal jury on Tuesday convicted two former advertising executives and their attorney of bilking tens of millions of dollars out of corporate clients, including Universal Studios, ABC, NBC and Warner Bros.

Convicted were Thomas Rubin, former chairman and CEO of Focus Media; Thomas Sullivan, Focus Media’s ex-chief financial officer; and Glendale, Calif., attorney Geoffrey Mousseau.

Santa Monica, Calif.-based Focus Media bought TV and radio advertising time for clients, including Sears Roebuck & Co. and Universal Studios, the firm’s two largest clients. But when the company’s profits started to plunge in 1999, Rubin and Sullivan conspired to defraud its remaining clients by taking the money paid by the advertisers for ABC, NBC and Warner Bros. and using it for themselves, according to the U.S. Attorney’s Office.

During their yearlong ruse, the two men collected more than $45 million from advertisers but only paid out $10 million to the media outlets. Some of the missing funds were used to pay Rubin’s tax liability. Sears and Universal Studios later won an injunction to stop the two men from misappropriating the funds, but they continued to do so.

Focus Media was forced to file bankruptcy by ABC and NBC with the hope that would preserve whatever funds remained. But the fraud continued when Rubin and Sullivan brought in Mousseau as their attorney. Mousseau then funneled $500,000 into his attorney-client trust fund to pay his legal fees and fund payments to other lawyers without the bankruptcy trustee’s knowledge, federal authorities said.

The jury found Rubin, 58, guilty of 25 felony counts that included conspiracy, mail fraud, wire fraud, bankruptcy fraud and money laundering. He faces “several hundred years in federal prison,” according to the U.S. Attorney’s Office.

The same jury found Sullivan, 64, guilty of 27 counts that overlapped those against Rubin. He also faces a “lengthy prison term” for his part, federal authorities said.

Mousseau, 45, a University of Houston Law Center graduate, remains an active member of the California State Bar, according to the group’s Web site. He was found guilty of conspiracy, two counts of concealing a total of $500,000 in assets in a bankruptcy proceeding, one count of aiding and abetting the making of a false declaration in a bankruptcy proceeding, one count of perjury in a bankruptcy deposition proceeding, and one count of willfully withholding books and records in a bankruptcy proceeding.

The three men are scheduled for sentencing by U.S. District Court Judge Gary Feess on Oct. 23.

Rubin, however, will return to court Wednesday to determine whether he should be detained now that he has been convicted.