Focus Media Execs Convicted, Face 'Lengthy Prison Terms'

Former CEO, CFO Guilty of Stealing More Than $31 Million From Sears, Universal Studios

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SAN FRANCISCO (AdAge.com) -- Two executives at media-buying firm Focus Media have been convicted of stealing more than $31 million from Sears Roebuck & Co., Universal Studios and other marketers, and face federal prison terms that could be in the hundreds of years.
Focus Media chairman-CEO Thomas E. Rubin and Chief Financial Officer Thomas P. Sullivan were found guilty of a total of 52 felony counts.
Focus Media chairman-CEO Thomas E. Rubin and Chief Financial Officer Thomas P. Sullivan were found guilty of a total of 52 felony counts.

A federal jury June 20 found Thomas E. Rubin, 58, formerly chairman-CEO of Focus Media, Santa Monica, guilty of 25 felony counts, including conspiracy, mail, wire and bankruptcy fraud, and money laundering. Focus Media Chief Financial Officer Thomas P. Sullivan, 64, was convicted by the same jury of 27 similar counts. The U.S. Attorney's office said Mr. Rubin faces "a potential sentence of several hundred years in federal prison" while Mr. Sullivan faces a "lengthy prison term" as well. Sentencing is set for Oct. 23.

Money used for 'private purposes'
According to prosecutors, starting in November 1999, money given to the shop by clients Sears and Universal Studios to pay ABC, NBC and Warner Bros. to air TV spots was used instead for the "private purposes" of Mr. Rubin and Mr. Sullivan. Focus Media received $45 million, but no more than $10 million was paid to media outlets, according to the prosecutor, and some $12 million was used to pay Mr. Rubin's taxes to cover his liability after Focus Media forgave millions of dollars in loans he received from the company.

"Even after Sears and Universal obtained court orders prohibiting Rubin and Sullivan from misappropriating their funds, the defendants continued to do so, paying themselves, their lawyers and Focus Media employees," the U.S. Attorney's office said in a news release.

Media companies seeking to preserve the firm's assets moved in October 2000 to force Focus Media into bankruptcy. It was during this time that a third defendant, attorney Geoffrey C. Mousseau, 45, without the knowledge of the bankruptcy-court-appointed trustee, took $500,000 to pay his fees as well as the fees of other attorneys. Mr. Mousseau was found guilty of one court of perjury and one count of willfully withholding books and records in a bankruptcy proceeding.
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