FORMER PR EXEC GETS 3 YEARS PROBATION SUGERMAN STAR WITNESS IN COLLEAGUES' TRIAL.

Byline: BETH BARRETT Staff Writer

A former Fleishman-Hillard executive who became a star prosecution witness after admitting to bilking the Los Angeles DWP out of tens of thousands of dollars, was sentenced Monday to three years' probation.

Steve Sugerman had faced 15 years in prison and fines totaling $750,000 for his guilty plea on wire-fraud charges.

But prosecutors recommended leniency in exchange for Sugerman's testimony against his former boss, Doug Dowie. He and John Stodder, a former public-relations executive who joined the firm after Sugerman left, each face more than 200 years in prison after their convictions on conspiracy and wire fraud.

``I profoundly regret my actions ... they were not defensible in any way,'' Sugerman said before he was sentenced.

As part of his plea agreement, Sugerman admitted to defrauding clients out of $120,000, including thousands of dollars in hours he billed but didn't work.

``It's what we asked for,'' Assistant U.S. Attorney Adam Kamenstein said after U.S. District Judge Gary Allen Feess sentenced Sugerman to probation and 250 hours of community service.

``We think the judge did the right thing,'' said Sugerman's attorney, Ellyn Garofalo. ``Steve cooperated, he testified in the grand jury and in the trial, and he fully accepted responsibility.

``The government recognized the significance of his cooperation in obtaining the verdict it did, and the judge also recognized his cooperation.''

Richard Kline, Fleishman-Hillard's general manager in Los Angeles, said it would be inappropriate to comment on the sentence. The firm paid nearly $6 million to settle a city lawsuit alleging overbilling.

``We deeply regret this incident. We've cooperated fully with authorities, and we've taken numerous steps to avoid something like this ever occurring again,'' he said.

Sugerman, who left Mayor Richard Riordan's administration in 2000 to become Fleishman-Hillard's senior vice president for public affairs, testified that Dowie never specifically ordered him to pad DWP bills, but he believed that's what his boss wanted.

He also said Dowie referred to the city utility as ``the cash cow,'' and described two telephone conversations in which his boss asked whether he could get $20,000 to $30,000 more out of the DWP.

Also Monday, Feess indicated he would reject Dowie's and Stodder's motions for new trials, saying there had been ``overwhelming evidence'' of their guilt during their five-week trial this spring.

``This was not a close case in the end,'' Feess said.

Dowie's attorney, Michael Farhang, argued that prosecutors improperly tried to expand the conspiracy claims, and that other legal problems emerged after a juror admitted recognizing a witness.

Stodder's lawyer, Jan Handzlik, said that billing statements presented as evidence were inaccurate, but not fraudulent.

``We're disappointed obviously,'' said Dowie's attorney Tom Holliday with Gibson, Dunn & Crutcher.

Dowie and Stodder are scheduled to be sentenced Oct. 2.

beth.barrett(at)dailynews.com

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