3 Ex-Salesmen Guilty in $46-Million Investment Swindle

Three former sales agents for an Irvine bus stop advertising company have been convicted of roles in a pyramid scheme that swindled 1,200 mainly elderly investors out of $46 million.

The salesmen, convicted of fraud Wednesday by a federal court jury in Santa Ana, had sold Metro Display Advertising Inc. bus stop shelters to investors for $10,000 each.

Assistant U.S. Attorney Gregory Weingart said Thursday that Metro Display had promised investors that sales of ads on the sides of the bus shelters would produce 20% annual returns.

In fact, the three sales agents knew Metro Display actually sold far more shelters than it installed, according to prosecutors. They said the company used money from new investors to pay previous investors.

Metro Display began selling shelters to the public in 1986. It filed bankruptcy papers in January 1992 after regulators halted the sales. Investors took over the company for six years. It was sold recently to another ad firm.

U.S. District Judge Alicemarie H. Stotler set a Dec. 7 sentencing date for the sales agents: Donald L. Thomson, 64, of Lake Forest; David Munoz, 42, of Fountain Valley; and Bennie E. McGregor, 69, of Incline Village, Nev.

The defendants, who operated companies separate from Metro Display, contended they were unaware of any scam despite handling most of the company’s sales from 1989 through 1991.

But jurors convicted Thomson on 10 counts of mail fraud and Munoz and McGregor on two counts each.

Three others previously pleaded guilty in the case and are to be sentenced Sept. 21.

They are Metro Display founder Jean Claude Leroyer, 54, of Fountain Valley, who admitted three counts of mail fraud and three counts of filing false tax returns; his wife, Karen Leroyer, 47, of Fountain Valley, three counts of filing false tax returns; and former Metro Display finance chief Gary Delgado, 33, of Chino, two counts of mail fraud.