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City hall crimes veiled by anonymity

Unidentified employee quietly cops grand theft plea in six-figure theft and bribery case

Point Loma Wastewater Treatment Plant
Point Loma Wastewater Treatment Plant

Crime, fraud, and miscellaneous malfeasance may be taking a major turn for the worse at San Diego's city hall, judging from the most recent Quarterly Fraud Hotline Report from the city auditor.

But because of state law, the April 2 report by city auditor Eduardo Luna maintains, few details are available to the public.

"The primary objective of the Fraud Hotline is to provide a means for a City employee or citizen to confidentially report any activity or conduct — related to or involving City personnel, resources, or operations — for which he or she suspects instances of fraud, waste, or abuse," notes the report.

Names and other specifics are kept secret.

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According to the document, hotline complaints during the first three quarters of this fiscal year, which ends June 30, totaled 88. During the same period of the previous year, 42 allegations were received, an earlier report shows.

Little information about the pending matters are provided, but based on the descriptions that are available, more than a few of this year's charges appear to be of the big-money variety.

Cases that the auditor lists as "open/unresolved" include a February 6 allegation that "there is no oversight of a large contract for services," and a September 17, 2014, charge of "fraud related to the City's contracting process."

An October 1, 2014, complaint, asserting "an employee who works for a vendor that does business with the City has committed fraud in the past," also remains unresolved. In addition, a January 12 allegation that "a supervisor is allowing some employees to steal time," is still open.

Violations that were substantiated during the quarter included a January 16 "allegation that City employees were sleeping while on City time." The report says, "Appropriate corrective action was taken."

On January 29, it was alleged, "that a non-City official had a conflict of interest and failed to recuse him/herself." Says the document, "The department sent a reminder regarding the relevant Council Policy to all interested parties."

The auditor bagged his biggest miscreant this February, with the sentencing of an unidentified city employee caught last year running a six-figure shell game out of the wastewater department's warehouse operation.

"The Office of the City Auditor received a Fraud Hotline complaint alleging that since 2011, Public Utilities Department’s Wastewater Treatment and Disposal warehouse employees have been making excessive purchases of equipment and supplies," recounted Luna in a March 18, 2014 report.

"Supply items, including batteries, were purchased in excess of the inventory records of supply items being received."

Continued the auditor, "The investigation identified $243,683 of supply item purchases for which no inventory records of the items being received were found. The investigation also verified the admissions of a vendor who stated that goods and cash were provided to a city employee to maintain a business relationship between the vendor and the City."

Following Luna's investigation, a city employee, who was arrested and charged with seven felonies, pled guilty to a single count of grand theft in July of last year.

"On February 19, 2015, the former City employee was sentenced to 3 years of formal probation, 365 days in custody (to be served as work furlough), and ordered to pay the City $161,686 in restitution," the auditor's April 2 report says.

"State law prevents the City Auditor from disclosing the identity of the subject employee, and the identity of the whistleblower, in public reports."

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Point Loma Wastewater Treatment Plant
Point Loma Wastewater Treatment Plant

Crime, fraud, and miscellaneous malfeasance may be taking a major turn for the worse at San Diego's city hall, judging from the most recent Quarterly Fraud Hotline Report from the city auditor.

But because of state law, the April 2 report by city auditor Eduardo Luna maintains, few details are available to the public.

"The primary objective of the Fraud Hotline is to provide a means for a City employee or citizen to confidentially report any activity or conduct — related to or involving City personnel, resources, or operations — for which he or she suspects instances of fraud, waste, or abuse," notes the report.

Names and other specifics are kept secret.

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According to the document, hotline complaints during the first three quarters of this fiscal year, which ends June 30, totaled 88. During the same period of the previous year, 42 allegations were received, an earlier report shows.

Little information about the pending matters are provided, but based on the descriptions that are available, more than a few of this year's charges appear to be of the big-money variety.

Cases that the auditor lists as "open/unresolved" include a February 6 allegation that "there is no oversight of a large contract for services," and a September 17, 2014, charge of "fraud related to the City's contracting process."

An October 1, 2014, complaint, asserting "an employee who works for a vendor that does business with the City has committed fraud in the past," also remains unresolved. In addition, a January 12 allegation that "a supervisor is allowing some employees to steal time," is still open.

Violations that were substantiated during the quarter included a January 16 "allegation that City employees were sleeping while on City time." The report says, "Appropriate corrective action was taken."

On January 29, it was alleged, "that a non-City official had a conflict of interest and failed to recuse him/herself." Says the document, "The department sent a reminder regarding the relevant Council Policy to all interested parties."

The auditor bagged his biggest miscreant this February, with the sentencing of an unidentified city employee caught last year running a six-figure shell game out of the wastewater department's warehouse operation.

"The Office of the City Auditor received a Fraud Hotline complaint alleging that since 2011, Public Utilities Department’s Wastewater Treatment and Disposal warehouse employees have been making excessive purchases of equipment and supplies," recounted Luna in a March 18, 2014 report.

"Supply items, including batteries, were purchased in excess of the inventory records of supply items being received."

Continued the auditor, "The investigation identified $243,683 of supply item purchases for which no inventory records of the items being received were found. The investigation also verified the admissions of a vendor who stated that goods and cash were provided to a city employee to maintain a business relationship between the vendor and the City."

Following Luna's investigation, a city employee, who was arrested and charged with seven felonies, pled guilty to a single count of grand theft in July of last year.

"On February 19, 2015, the former City employee was sentenced to 3 years of formal probation, 365 days in custody (to be served as work furlough), and ordered to pay the City $161,686 in restitution," the auditor's April 2 report says.

"State law prevents the City Auditor from disclosing the identity of the subject employee, and the identity of the whistleblower, in public reports."

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