Metro Display Founder Gets 46 Months for Fraud

Jean Claude Leroyer, founder of an Orange County bus stop advertising firm that defrauded more than 1,100 investors of $46.4 million between 1986 and 1991, was sentenced Wednesday to 46 months in federal prison.

Also sentenced in federal court in Santa Ana were three salesmen recently convicted of marketing fraudulent investments in the Irvine-based company, Metro Display Advertising, and the company’s former chief financial officer.

Leroyer, 54, of Fountain Valley, had pleaded guilty in October 1996 to multiple counts of mail fraud and filing false tax returns. His wife, Karen Leroyer, 47, had pleaded guilty at the same time to charges of filing false tax returns. She is scheduled to be sentenced next month.

Leroyer began selling investments in bus stop advertising in 1986. He marketed bus stop shelters for $10,000 each and told investors that they would receive a 20% annual return on their investments from the proceeds that the firm received from selling advertising space on the shelter walls.

Only about half of the shelters sold to investors were ever installed, government investigators said.

The Securities and Exchange Commission ordered the company to stop selling the shelters in December 1991, alleging that Metro Display was using money from new investors to make sham “profit” payments to previous investors.

The company filed for bankruptcy in January 1992 and later was taken over by the investors Leroyer had victimized. The company recently was sold by those investors to a larger outdoor advertising firm.

In its 1992 bankruptcy petition, Metro Display listed more than $100 million in debts but less than $1 million in assets.

Federal lawyers argued that the fraudulent activities cost investors more than $46 million. In sentencing Leroyer and the others, U.S. District Judge Alicemarie H. Stotler fixed the loss at $46.4 million. All were ordered to make restitution to their victims.

In addition to Leroyer, those sentenced Wednesday were:

* Gary Delgado, 33, of Chino, former Metro Display financial officer, 366 days. He pleaded guilty last year to two counts of mail fraud.

* Donald L. Thompson, 65, of Lake Forest, 92 months. He sold investments in Metro Display through his Newport Beach company, Financial & Accounting Consultants.

* David Munoz, 43, of Fountain Valley, 41 months. He sold investments in the firm through his Long Beach business, IBT Financial.

* Bennie E. McGregor, 69, of Incline Village, Nev., 36 months. The former Long Beach police officer sold investments through his Huntington Beach firm, McGregor Financial Group.

The three salesmen were convicted of mail fraud last year after a jury trial.