Figures in Bus Stop Ad Scam Get Prison

A federal judge sentenced officers and salesmen at an investment firm to terms ranging up to more than seven years in prison for bilking elderly investors of tens of millions of dollars.

U.S. District Judge Alicemarie Stotler on Wednesday sentenced Jean C. Leroyer, 54, founder and president of Irvine-based Metro Display Advertising, to 3 years and 10 months in prison. The judge also ordered him to pay full restitution.

Metro Display raised more than $46 million from 1,200 investors, most of them senior citizens who used their retirement savings, in a bogus scheme to sell advertising on bus stop shelters. Fewer than half of the shelters were installed before Metro went bankrupt, said prosecutor Alejandro N. Mayorkas.

Leroyer of Fountain Valley began the scheme in 1986. The shelters were sold for $10,000 apiece and investors were promised a 20% annual return. The Securities and Exchange Commission ordered Metro to stop selling in 1991.

Also sentenced was Metro Display’s chief financial officer, Gary Delgado, 33, of Chino. He was sentenced to one year in prison and ordered to pay restitution. Salesmen sentenced were: Donald L. Thomson, 65, of Lake Forest, 7 years and 8 months; David Munoz, 43, of Fountain Valley, 3 years and 5 months; and Bennie E. McGregor, 69, of Incline Village, Nev., three years.

Leroyer and Delgado pleaded guilty to various counts of mail fraud and filing false tax returns. The salesmen were convicted in a five-week jury trial. Thomson drew the harshest sentence because the judge found that he obstructed justice by committing perjury during his trial testimony.

Leroyer’s wife, Karen, 47, pleaded guilty to filing false tax returns and faces sentencing April 19.