Two officers of a defunct media placement company in Santa Monica were charged with stealing $31 million that Sears, Roebuck & Co. had paid for television and radio advertisements, the FBI said Wednesday.
Thomas Edward Rubin, 57, and Thomas Patrick Sullivan, 63, were arraigned this week on charges including conspiracy, mail fraud and wire fraud, the FBI said.
Rubin, founder and chairman of Focus Media, and Sullivan, the company's chief financial officer, never paid the media outlets for ads Focus placed on Sears' behalf in 1999 and 2000 and instead used the money to pay company and personal creditors, including the Internal Revenue Service, according to court papers.
Rubin and Sullivan made "false and misleading representations and promises to the media outlets for the purpose of lulling" them "into believing that payment for all of the advertising costs due and payable" were forthcoming, according to the indictment.
Bruce Margolin, an attorney for Sullivan, and David Lafaille, a lawyer for Rubin, didn't immediately return calls seeking comment. Chris Braithwaite, a spokesman for Sears, declined to comment.
Hoffman Estates, Ill.-based Sears is now known as Sears Holding Corp. The new company was created in March by Kmart Holding Corp.'s purchase of Sears.