FBI Searches Bus Shelter Offices, Founder’s Home : * Investments: Records and documents of Metro Display Advertising are seized as part of a criminal investigation into securities fraud.

The FBI searched the Orange and Los Angeles county offices of the beleaguered Metro Display Advertising bus shelter company and the Newport Beach house of its founder Tuesday, carting off records and documents as part of an investment fraud investigation.

About 50 employees at the company headquarters on Dow Avenue in Tustin were sent home early as agents reviewed documents from advertising brochures to travel records of founder Jean Claude LeRoyer and his wife, Karen, according to an affidavit filed in the case.

Agents removed much of the office computer system, forcing company officials to consider buying replacement equipment for $10,000 to $20,000.

No arrests were made and no charges were filed as a result of the searches, which came one day after the Securities and Exchange Commission reached agreement with Metro Display and the LeRoyers to drop a lawsuit against them that alleged that the company had been operating as a pyramid scheme that collected $48 million from at least 4,500 investors.

Jean Claude LeRoyer could not be reached for comment Tuesday. His lawyer, Thomas Nolan, said LeRoyer has continued to cooperate with the government, as indicated by his agreeing to the SEC consent decree, in which he admitted no wrongdoing.

The search sought to obtain evidence as part of a criminal investigation into securities fraud through the sale of shelters, money laundering and mail fraud by the LeRoyers, the affidavit states.

About 35 agents from the FBI’s Orange County and Los Angeles offices participated in the searches at the company’s headquarters, the advertising sales offices on San Vicente Boulevard and Indiana Avenue in Los Angeles and LeRoyer’s house.

The affidavit also alleges that LeRoyer’s policy of selling bus shelters as investments for $10,000 each was “from the beginning permeated by fraudulent conduct.” It states that Metro Display, which does business as Bustop Shelters of California, engaged in the sale of unregistered securities, failed to tell investors about its true financial condition, used investor funds to pay other investors and oversold the bus shelters.

Later Tuesday, a bankruptcy judge overseeing the Metro Display case in Santa Ana decided against intervening in the ongoing search at the company’s offices. A battery of attorneys for the company sought the emergency hearing, arguing that the search was not necessary since LeRoyer is no longer managing Metro Display.

The affidavit alleges that a former Metro Display official had knowledge of the LeRoyers taking loans of $850,000 from the company, of which $250,000 was to be used for improvements on their house. The FBI has obtained a check register that shows a $25,000 check from a special account at Metro Display that was paid to a contractor for renovations to the LeRoyer house on Kings Road in Newport Beach.

LeRoyer has steadfastly maintained his innocence, saying that he and his wife received their regular salaries plus $350,000 he intended to pay back to the company. Also, he said in an interview Monday that the company started losing advertising revenue and falling behind on lease payments to investors because he was distracted by the SEC investigation. Metro Display paid $170 in monthly lease payments to 1,055 investors until shortly before it filed for bankruptcy on Jan. 22.

Scott Kraft, who bought four shelters and has since become a leader in the movement to revive the company, said he welcomed the searches.

“I think it’s a positive thing because it will allow the FBI to vindicate MDA and the LeRoyers of any wrongdoing and remove the shadow cast by the SEC through its investigation,” he said, adding that searches were aimed at the LeRoyers, not the company.

Kraft said he was told by employees that the FBI agents arrived shortly after 9 a.m. and that workers were asked to stand away from their desks. Agents sought passwords to tap information from Metro Display’s computers. About 50 employees present at the time of the search were sent home for the day at the FBI’s request.

At the same time, agents also showed up at the LeRoyers’ Newport Beach residence, a large white house with a sweeping view of the harbor that is protected by a security fence.

A woman who described herself as a family friend of the LeRoyers, but who would not give her name, said that Jean Claude LeRoyer had called his wife on his car phone from a local gas station Tuesday morning to ask her if she was ready to be picked up. “She said: ‘My God, they came in and they are tearing apart our house.’ ”

The family friend described LeRoyer as “a broken man” who “signed a consent decree (with the SEC) and thought that was the end of his trouble and the beginning of building his life again.”