3 O.C. Sales Agents Accused of Mail Fraud

A federal grand jury has indicted three former sales agents for an Orange County bus shelter advertising company whose founder already has pleaded guilty to multiple felonies in a so-called Ponzi scheme that bilked investors of $20 million to $40 million.

The felony fraud indictments announced Thursday accuse Orange County residents Donald L. Thomson, David Munoz and Bennie E. McGregor of selling fraudulent investments in Irvine-based Metro Display Advertising Inc. during the period it was controlled by founder Jean Claude LeRoyer.

LeRoyer pleaded guilty in October to charges of mail fraud and filing false income tax returns. His wife, Karen, who worked at the company as a bookkeeper, pleaded guilty to charges of filing false income tax returns. They are scheduled to be sentenced in February.

LeRoyer operated Metro Display from 1986 until it was taken over by disgruntled investors in 1992. The company, which went into a bankruptcy reorganization after he was ousted, continues operating under the investor group’s guidance.

The three sales agents indicted Thursday in Los Angeles have not been affiliated with the company since LeRoyer left, Assistant U.S. Atty. Ellyn Lindsay said. The agents, who are charged with mail fraud, could not be reached for comment.

Thomson, a Lake Forest resident, operated a Newport Beach company called Accounting and Financial Consultants and actively sold investments in Metro Display from 1986 through February 1992, the indictment says. It says he regularly told clients and prospective investors he possessed a certified public accountant’s license and was a former Internal Revenue Service employee when he was not a CPA and had never worked for the IRS.

Munoz, a Fountain Valley resident who operated as IBT Financial in Long Beach, and McGregor, a Garden Grove resident who operated in Huntington Beach as McGregor Financial Group Inc., sold the investment shares from 1986 until February 1992, the indictment says.

Metro Display sold investors covered bus stop shelters for $10,000 and promised them a return from the payments that advertisers would make to lease advertising space on the sides of the shelters.

But the government alleges that the three knew that Metro Display was selling far more bus shelters than it was installing or even had city business licenses to operate, and that they knew the company was using money it received from new investors to make payments to previous investors.

The agents also are accused of misrepresenting the size of sales commissions they would receive, telling investors they got $500 per shelter when they actually received up to $2,500.

The indictment also alleges that the men falsely told clients that the bus shelter investment offered income tax advantages and that some costs could be deducted from their federal income taxes.