Where did the money go?

An inside look of the recent increase of embezzlement cases in the Los Angeles County and the need of accountability in local city government.

Irwindale officials accused of embezzling money

Irwindale, Calif.— At the council meeting on Feb. 11, 2015, Irwindale resident Dina Zepeda told Mayor Mark Breceda and Mayor Pro Term Manuel Garcia to resign for the embezzling charges.  Photo Credit: Camille Garcia

Irwindale, Calif.— At the council meeting on Feb. 11, 2015, Irwindale resident Dina Zepeda told Mayor Mark Breceda and Mayor Pro Term Manuel Garcia to “step down” for embezzling.
Photo credit: Camille Garcia

Appearances at Yankee and Mets games, feasting at high-end restaurants, attending Broadway shows such as Wicked and Mamma Mia!, and luxurious lodgings at the Ritz-Carlton landed Irwindale officials into trouble. The city’s Mayor Mark Breceda, City Councilman Manuel Garcia, and former City Councilwoman Rosemary Ramirez will head to the Clara Shortridge Foltz Criminal Justice Center once again on Feb. 26, 2015 for a motion hearing regarding public corruption charges.

The public officials are being prosecuted by the District Attorney’s office for a second time for allegedly misappropriating public funds. According to Deputy District Attorney of the Public Integrity Division, Kennes Ma, the Irwindale officials, along with former Finance Director Abraham De Dios, took multiple trips to New York City from 2001-2005, spending $200,000 during the trips. Garcia’s attorney Steven Graff Levine stated that the officials frequently traveled to New York “to improve the city’s bond ratings.”

De Dios was also charged with conflict of interest, but plead no contest in April 2014. He was convicted to three years of unsupervised probation, as well as fined $9,000 to compensate the misused money to the city of Irwindale.

“I am very saddened about it because we’re all such a small family here in Irwindale—everybody loves everybody and Mark and Manuel are a part of that, but bottom line is that you did what you did,” said Irwindale resident of 40 years Dina Zepeda.

The group was originally presented with the charges in October 2010 with a grand jury indictment. The case was then dismissed after the court found that the prosecutors had exculpatory evidence. According to a report by the San Gabriel Valley Tribune and in an interview with Breceda’s attorney Anthony Falangetti, the prosecutors withheld a 2002 document from the grand jury that outlines the council members ability to collect $75 each day for their travel expenses. The newspaper also reported that Associate Justice Jeffrey Johnson agreed they were over-benefitting of the $75 allowance through food and entertainment.

Although they did not have convincing evidence the first time around, the DA’s office decided to refile the charges against Breceda, Garcia, and Ramirez in October 2013.

Questions about the city’s fund began to percolate when local citizens started to ask the city of Irwindale for documents through a Public Records Act Request, a law that requires any government entity to give the public access to records. According to Ma, the citizens were not able to get the information through the request right away.

“Council members were replaced with new council members,” said Ma, “Once the new council members began to review the actions that previously took place, the new officials were able to determine what had happened with the funds.”

At the bi-monthly closed and open meetings, the council members did not give details of the trips that were being taken. Ma explained that they were only open about paying for the demands and warrants at the time.

“You never heard about them talking about the city paying for all the luxuries that they were partaking in— those types of things were hidden,” said Ma.

A trend of embezzlement within L.A. County cities

According to the California Department of Finance, out of the 88 cities in the Los Angeles County, Irwindale is one of the smallest cities with approximately 1,717 residents. Irwindale has not been the only city in the county that has alleged embezzlement from its employees.

In 2010, two reporters from the Los Angeles Times, Jeff Gottlieb and Ruben Vives, questioned the council members of the city of Bell after noticing that the six former officials received unusually high salaries compared to not only other city officials in the county, but even the President of the United States. Bell’s former city manager, Robert Rizzo, his assistant Angela Spaccia, along with five other council members, were charged for embezzling around $5.5 million dollars of the city’s treasury in order to give themselves a higher salary. As the mastermind behind the scheme, Rizzo was sentenced to 12 years in state prison.

Danny Ray Wooten, pastor of New Covenant Christian Church in Pomona, is being charged with up to 60 counts of embezzlement from the city of Pasadena.  Photo credit: Facebook

Danny Ray Wooten, pastor of New Covenant Christian Center in Pomona, is being charged with up to 60 counts of embezzling from Pasadena’s improvement funds.
Photo credit: Facebook

Just recently in January, former management analyst in Pasadena’s Department of Public Works Danny Wooten, his personal assistant Melody Jenkins, andTyrone Collins, owner of Collins Electric in Altadena, were all charged for allegedly embezzling $6.4 million dollars in a span of 10 years. The trio allegedly transmitted the money to New Covenant Christian Fellowship Center, the church Wooten preaches at in Pomona.

Since there has been a frequent trend of embezzlement charges against public officials on the city level, Ma has found it particularly important to pursue the Breceda, Garcia, and Martinez case to its fullest extent.

“We always want to put a stop to that,” said Ma. “Taxpayers certainly are unhappy with that—its very important for these type of cases to be prosecuted so that they know they can not get away with it.”

Uncovering the wrongdoings

It nearly took five years before the Public Integrity Division took notice of the missing funds from the city of Irwindale and to begin to pressing charges against the public officials. It also took nearly a decade to find out about the misappropriation of funds by Rizzo and to commence the prosecution of Wooten. How are the public officials organizing these embezzling schemes?

In his experience auditing L.A. County cities and its departments, Certified Public Accountant and Chartered Global Management Accountant, Michael Steinhaus, learned that there is a sophistication behind the concealment of the embezzling schemes. Concealment comes through the forms of forgery, failure to record transactions, or intentional misrepresentation being made to the auditor.

“The risk of not detecting a material misstatement resulting from fraud is higher than the risk of not detecting one resulting from error,” said Steinhaus. “Such attempts at concealment may be even more difficult to detect when accompanied by collusion. Collusion may cause the auditor to believe that audit evidence is persuasive when it is, in fact, false.”

Though Steinhaus and his colleagues are devising different accountability systems, Steinhaus hopes to see bio-metric systems such as face recognition and fingerprinting as a possible solution to limit perpetrators’ access to the financial systems of the city.

Keeping the small cities accountable

According to Ma, citizens of the city can also keep the council members accountable by attending meetings and keeping track of what the officials are doing. “Every single action that city council partake[s] must be done in public,” said Ma.

“Its a public forum that anyone can attend, anyone can ask questions, but its small cities where people do not get involved and do not participate in that,” said Ma. “Those are the situations where because they don’t have people watching the city council members, city council members do what they want to do.”

Laura Nieto, the Deputy City Clerk of Irwindale, has made an effort in making information available to the residents of Irwindale.

“Our role is to be the record keeper for the city and to get accurate information out to the public,” said Nieto, “as far as making information available— minutes, agenda, stats reports— we try to make that information really readily available to members of the public or to members of the press, or just anyone interested in information about the city council and the city council meetings.”

Despite the pressures of the upcoming retrial involving current Mayor Breceda and Mayor Pro Term Manuel Garcia, the actions of the city’s office will be determined by the outcome of the trial.

“I think that the position that I’m in, [it] would just be a matter of [seeing] what is determined in the judicial system—then we would handle it accordingly here on our end,” said Nieto. “Regardless of which way it goes, we would just have to move forward however it would be necessary depending on the outcome.”

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