Federal prosecutors indicted former Fleishman-Hillard executive John Stodder Jr. after he declined to cooperate in a continuing investigation into the public relations giant's Los Angeles office, according to sources familiar with the case.
Stodder, a partner and senior vice president dismissed by the firm last week, surrendered to authorities and appeared Friday afternoon before U.S. Magistrate Judge Carolyn Turchin, who ordered him released on $10,000 bail.
A former news reporter and advisor to Mayor Tom Bradley, Stodder, 49, was indicted Thursday on 11 counts of wire fraud in connection with an alleged scheme to submit at least $250,000 in false billings to the Los Angeles Department of Water and Power.
He and other Fleishman-Hillard executives, "known and unknown," also submitted phony bills to the Port of Los Angeles and two private clients, the Worldwide Church of God and the firm of renowned architect Frank Gehry, the indictment alleges.
One source familiar with the case said prosecutors indicted Stodder to put pressure on him to cooperate as they try "to move up the chain" to Douglas R. Dowie, a former head of Fleishman-Hillard's Los Angeles office and confidant to Mayor James K. Hahn.
Stodder, who oversaw the firm's local public affairs work, is important because he "can give them Dowie and the scope of Dowie's instruction," the source said, adding that he believed at least one Fleishman-Hillard executive with knowledge of the alleged false-billing scheme was already cooperating with federal authorities.
Another source described Stodder's indictment as "the first of several" likely to come from the investigation into the firm.
But the sources said the momentum prosecutors have gained in the Fleishman inquiry should not be taken as a sign that indictments were close in a broader probe of alleged corruption in city government being conducted jointly by the U.S. attorney's office and Dist. Atty. Steve Cooley.
Under terms of his bail, Stodder must remain in Southern California and try to find employment, according to Turchin. The magistrate ordered him to return to court Feb. 7 for arraignment.
Assistant U.S. Atty. Adam Kamenstein, who is heading the corruption investigation, declined to comment after Stodder's court appearance.
