On January 6, 2015, the San Jose Mercury News (
visit link) ran the following story:
'Pasadena City Hall $6M embezzlement scandal larger than Bell case
By Sarah Favot, Pasadena Star-News
POSTED: 01/06/2015 10:15:44 AM PST1
PASADENA - Los Angeles County District Attorney's investigators last week arrested a former Pasadena city employee and two other people suspected of using a City Hall slush fund to embezzle more than $6 million in taxpayer dollars over a decade.
Danny Ray Wooten, 51, a preacher, and a former management analyst in the city's Department of Public Works, was arrested with Tyrone Collins, 55, and Melody Jenkins, 46, a onetime assistant to Wooten. The three are named in a 60-count felony complaint. The allegations include embezzlement, conflict of interest and grand theft.
The alleged public corruption scheme spans more years and involves a larger sum of money than the Bell scandal where officials were caught misappropriating $5.5 million from the city of 35,000 residents.
Danny Ray Wooten, 51, a former management analyst in the Pasadena s Department of Public Works, was arrested with Tyrone Collins, 55, and Melody Jenkins, 46. They are charged on a 60-count felony complaint, according to the D.A s office.
Beginning in August 2003, officials said Wooten allegedly wrote nearly 300 fraudulent invoices to the city on behalf of four bogus vendors. In return the city issued 189 checks totalling $6.4million.
"Clearly, this is a complete breakdown of our internal controls that would enable that to occur over that length of time," City Manager Michael Beck said Tuesday.
Wooten allegedly stole the money from an account that funds a DPW project intended to bring utility lines underground. The city collects about $5 million a year in surcharge fees from Pasadena Water and Power electricity customers to fund the $50 million project.
Wooten, Jenkins and Collins were unavailable for comment. Arraignment is pending. Bail for Wooten was set at $1.75 million. Jenkins is being held in lieu of $50,000 bail and Collins for $900,000, according to Los Angeles County Sheriff's Department booking records.
City documents indicate Wooten, a resident of Montclair who preaches at the New Covenant Christian Fellowship Foursquare Church in Pomona, gave more than $3.5 million of the stolen $6.4 million to Collins, who owns Altadena-based Collins Electric. Wooten also allegedly gave Jenkins, who was hired as Wooten's personal assistant, more than $40,000 of the stolen money, according to the D.A.'s office.
City officials also say Wooten directed $2.8 million to the Pasadena-based Southern California Evangelist Jurisdiction Center on East Villa Street and New Covenant in Pomona, where he is the senior pastor.
Checks issued by the city to the church organizations were deposited into bank accounts held by Wooten. Checks issued to Collins Electric were deposited into a bank account held by Collins and checks were paid from that account to New Covenant Center and cashier's checks were written and paid to Wooten, according to auditors.
Beck said the fund Wooten allegedly raided had less scrutiny than other funds and annual audits did not catch the payments. He said he did not know the last time the fund was audited.
Wooten, who had an annual salary of $131,000, had the ability to authorize payments from the fund. Some of those payments were countersigned by department heads including former Public Works Director Martin Pastucha, of Diamond Bar, and current director Dan Rix, a resident of Bradbury, according to the audit. Neither man could be reached for comment.
The city became aware of the alleged embezzlement scheme in May after a City Council committee asked numerous questions about the fund. City staff looked into the accounts and found inconsistencies. Beck informed the council and the city attorney reported the city's findings to the district attorney's office in late May.
The city commissioned an independent audit of the fund. The audit, completed in November, was released last Tuesday.
Among other things, auditors found that Jenkins was employed as Chancellor, Education Ministry at the New Covenant Church.
Auditors noted, "There does not appear to be any valid business purpose for the invoices from M. Jenkins. Her temporary employment with the City in 2008 was for administrative services unrelated to electrical contracting labor and services."
At a hastily called news conference last Tuesday afternoon in City Hall, Mayor Bill Bogaard, joined by Beck, City Attorney Michele Beal Bagneris and city Spokesman William Boyer, said city officials would identify and repair weaknesses in its financial operations.
"I am confident, based on what I know about this case, based on my involvement in City Hall operations for over 15 years, based on my day-to-day working relationship with the city manager, that the city manager is well-positioned to deal with this situation and his executive leadership team is fully committed to help us recover a stronger organization," Bogaard said.
Beck said he takes responsibility for the actions of city employees.
"I think the city manager's responsibilities are associated with identifying these particular issues that are occurring within the city and ultimately what level of importance we undertake in resolving them," he said.
No city funds have been recovered. No civil lawsuit seeking return of the money has been filed by the city.
Wooten was fired in July for personnel matters unrelated to the embezzlement scheme. He worked for the city for 12 years.
City officials said no other city employees are believed to be criminally involved in the theft. Four other employees have been placed on paid administrative leave pending an administrative personnel investigation. Beck declined to identify those employees.
City Councilman Terry Tornek, who is running for mayor, described the embezzled fund as unique.
"He found a seam in the system. He did. He found it for 11 years," said Tornek. "That's the part that's kind of unbelievable, apart from the amount of money, the duration of the fraud is what's kind of extraordinary that in 11 years, with changing administrations, that no one picked it up."
He said City Hall has a long-standing culture of complacency.
Rev. George B. Salter, of Monrovia, a board member with the Southern California Evangelist Jurisdiction had little comment on the matter. It is unclear if the organization directly benefitted from the scheme.
"Right now the police are just getting started and we are just finding out," Salter said. "Myself, I always believe that a man is innocent until proven otherwise and before I say much more about this, I have to do research on my own."
Wooten faces up to 28 years in state prison if he is convicted, prosecutors said. Collins faces up to 18 years and Jenkins faces up to four years.
Wooten is being held at the L.A. County Sheriff's Station in Industry."