FOR IMMEDIATE RELEASE: September 1, 2009
CONTACT:
Erica Terry Derryck, DA Harris’ Office, (415) 553-1167
Connie Chan, DA Harris’ Office, (415) 553-9108
DA Harris Charges SF Public Utility Commission Employees & City Vendors in Procurement Scam
Public Workers & Approved Vendors Accused of Conspiring to Embezzle City Funds for Personal Gain
SAN FRANCISCO, CA – District Attorney Kamala D. Harris announced today that felony charges have been filed against former San Francisco Public Utility Commission (PUC) workers and City-approved vendors and the companies’ employees. DA Harris was joined by City Attorney Dennis Herrera and General Manager of the San Francisco Public Utility Commission Edward Harrington when she announced that the individuals and corporations charged are alleged to have engaged in a conspiracy to defraud the PUC for personal benefit through use of the vendor procurement system.
“Public employees and companies doing business with our City have been contracted to serve San Franciscans, not rob them blind,” said San Francisco District Attorney Kamala D. Harris. “This case is a clear example of how conspiring to cook the books with false invoicing can not only cost you your livelihood, it could cost you your freedom.”
DA Harris launched the Public Integrity Unit in 2004 to prosecute those who abuse a position of public trust or influence. The Unit has prosecuted cases involving campaign fundraising violations, bribery and misappropriation of public funds.
Former PUC employees Donnie Alan Thomas and Miles Bonner are accused of using public funds to buy goods for their personal use, as well as materials for Tri Delta Electric, Inc. (TDE), a company they personally owned. The pair is alleged to have conspired with employees from City approved vendors: Centennial Distributors, Inc. and Cole Hardware, both California Corporations, to falsely invoice the PUC for the stolen goods, resulting in a loss of over $200,000. They are believed to have covered the illegal transactions by making the invoices appear to reflect legitimate PUC purchases that would have been made as part of the normal course of doing business.
According to court documents, Jean Quiroz and Elizabeth Bradford, employees of vendors Centennial and Cole respectively, knowingly submitted invoices to the PUC with false descriptions of items purchased. The false invoice descriptions allowed Thomas and Bonner to conceal the fact that they were purchasing items for their personal benefit. The vendors benefited by making substantial profits on the items sold and have been criminally charged.
Donnie Thomas, Miles Bonner and John Rauch, a third former PUC employee and principal in Tri Delta Electric, Inc. (TDE), are also alleged to have worked on private electrical contracts through their company while on PUC time. Bonner was the President of TDE and Thomas and Rauch were officers in the corporation. It is alleged that the three officers split the profit made on the private jobs they worked during PUC time.
Robert Mazariegos and Vincent Padilla, two former PUC employees, are alleged to have worked for Thomas, Bonner and Rauch on TDE contracts during PUC time. Mazariegos and Padilla are alleged to have been paid for their TDE work while collecting their PUC paycheck for the same hours. They have been charged with felonies for their involvement in the alleged scheme. The cost to PUC in lost labor is in the tens of thousands of dollars.
Donnie Thomas and Miles Bonner are also alleged to have defrauded the State Compensation Insurance Fund by failing to accurately identify the number of TDE employees and the type of work done in order to reduce the premiums paid. Finally, it is alleged that Donnie Thomas, Miles Bonner and John Rauch defrauded the Employment Development Department by not withholding unemployment insurance taxes from the paychecks of TDE employees and failing to pay unemployment taxes to the Employment Development Department.
The alleged crimes began in 2003 and ended in October 2007. A whistleblower letter received at the PUC on February 12, 2007 alerted authorities to the alleged misconduct leading to an investigation by the PUC with the City Attorney’s Office. The PUC then referred the matter to the San Francisco District Attorneys Office, which subsequently filed criminal charges.
Thomas, age 45, was hired by the PUC Hetch/Hetchy Power Crew in 1997. In 2001, he was promoted to supervisor and tasked with purchasing materials and equipment necessary for the performance of the job and managing employees. John Rauch, age 69, ran the PUC Hetch/Hetchy Treasure Island crew with Thomas until he retired in 2005. After retirement Rauch continued working at the PUC part time. Miles Bonner, age 60, started with the PUC in 2001 working under Rauch and Thomas as a high voltage electrician.
Jean Quiroz is a former Vice President of Centennial Distributors, Inc. Quiroz, age 42, is also the daughter of Centennial’s owner. Liz Bradford, age 40, is an employee in the Commercial Sales Division of Cole Hardware.
Robert Mazariegos, age 56, was a high voltage electrician with the PUC from 2001 through 2007. Vincent Padilla, age 28, was a low-level worker with the PUC, and is Donnie Thomas’ nephew.
Each of the named defendants is specifically charged as follows with bail set as noted:
Donnie Alan Thomas and Miles Bonner are charged with:
Felony Counts: 4 counts of Penal Code §487(a) (Grand Theft), 3 counts of Penal Code §664/487(a) (Attempted Grand Theft), 3 counts of Penal Code §182 (Conspiracy to Commit Grand Theft), 3 counts of Penal Code §424 (Embezzlement and Falsification of Accounts by Public Officers), 3 counts of Penal Code §72 (Presenting Fraudulent Claims to the City), a felony; 24 counts of Penal Code §470(d) (Altered/Forged Requests for Payment), and 1 count of Insurance Code §11880 (False Statement for Purpose of Reducing Premium, Rate, or Cost of Workers' Compensation Insurance).
Misdemeanor Counts: 1 count of Unemployment Insurance Code §2117 (Failure to File Return or Report or to Supply Information), and 1 count of Unemployment Insurance Code §2118 (Failure to Withhold Taxes or to Pay over Tax Withheld).
· TOTAL COUNTS: Donnie Thomas (41 felonies and 2 misdemeanors) & Miles Bonner (41 felonies and 2 misdemeanors)
· BAIL: Donnie Thomas: $300,000. Miles Bonner: $100,000
John Rauch is charged with:
Felony Counts: 1 count of Penal Code §487(a) (Grand Theft)
Misdemeanor Counts: 1 count of Unemployment Insurance Code §2117 (Failure to File Return or Report or to Supply Information), and 1 count of Unemployment Insurance Code §2118 (Failure to Withhold or to Pay over Taxes Tax Withheld).
· TOTAL COUNTS: John Rauch (1 felony and 2 misdemeanors)
· BAIL: John Rauch: $10,000
Tri Delta Electric, Inc. is charged with:
Felony Counts: 1 count of Penal Code §487(a) (Grand Theft), 1 count of Penal Code §182 (Conspiracy to Commit Grand Theft), 1 count of Penal Code §424 (Embezzlement and Falsification of Accounts by Public Officers), 1 count of Penal Code §72 (Presenting Fraudulent Claims to the City), 1 count of Penal Code §470(d) (Altered/Forged Requests for Payment), and 1 count of Insurance Code §11880 (False Statement for Purpose of Reducing Premium, Rate, or Cost of Workers' Compensation Insurance).
Misdemeanor Counts: 1 count of Unemployment Insurance Code §2117 (Failure to File Return or Report or to Supply Information) and 1 count of Unemployment Insurance Code §2118 (Failure to Withhold Taxes or to Pay over Tax Withheld).
Jean Quiroz & Centennial Distributors, Inc. are charged with:
1 count of Penal Code §487(a) (Grand Theft), 1 count of Penal Code §664/487(a) (Attempted Grand Theft), 1 count of Penal Code §182 (Conspiracy to Commit Grand Theft), 1 count of Penal Code §424 (Embezzlement and Falsification of Accounts by Public Officers), 1 count of Penal Code §72 (Presenting Fraudulent Claims to the City), and 9 counts of Penal Code §470(d) (Altered/Forged Requests for Payment), all felonies.
· TOTAL COUNTS: Jean Quiroz (14 felonies) & Centennial Distributors, Inc. (14 felonies)
· BAIL: Jean Quiroz: $100,000
Elizabeth Bradford & Cole Hardware are charged with:
1 count of Penal Code §487(a) (Grand Theft), 1 count of Penal Code §664/487(a) (Attempted Grand Theft), 1 count of Penal Code §182 (Conspiracy to Commit Grand Theft), 1 count of Penal Code §424 (Embezzlement and Falsification of Accounts by Public Officers), 1 count of Penal Code §72 (Presenting Fraudulent Claims to the City), and 7 counts of Penal Code §470(d) (Altered/Forged Requests for Payment), all felonies.
· TOTAL COUNTS: Elizabeth Bradford (12 felonies) & Cole Hardware, a California Corp. (12 felonies)
· BAIL: Elizabeth Bradford: $10,000
Robert Mazariegos is charged with:
1 count of Penal Code §487(a) (Grand Theft), a felony.
· TOTAL COUNTS: Robert Mazariegos (1 felony)
· BAIL: Robert Mazariegos: $10,000
Vincent Padilla is charged with:
1 count of Penal Code §487(a) (Grand Theft), a felony.
· TOTAL COUNTS: Vincent Padilla (1 felony)
· BAIL: Vincent Padilla: $10,000
The defendants face the following maximum penalties if convicted of all charges:
Don Thomas:
21 years State Prison
In excess of $200,000 in restitution for actual theft
Tens of thousands of dollars in restitution for stolen labor
Fine in excess of $400,000 under PC 186.11
Miles Bonner:
21 years State Prison
In excess of $200,000 in restitution for actual theft
Tens of thousands of dollars in restitution for stolen labor
Fine in excess of $400,000 under PC 186.11
John Rauch:
3 years State Prison
Thousands of dollars in restitution for stolen labor
General fine around $10,000.
Jean Quiroz:
10 years State Prison
In excess of $150,000 in restitution for fraud
Fine in excess of $300,000 under PC 186.11
Centennial Distributors, Inc.:
In excess of $150,000 in restitution for fraud
Fine in excess of $300,000 under PC 186.11
Liz Bradford:
9 years State Prison
In excess of $40,000 in restitution for fraud
General fine around $20,000
Cole Hardware:
In excess of $40,000 in restitution for fraud
General fine around $20,000
Robert Mazariegos:
3 years State Prison
Thousands of dollars in restitution for stolen labor
General fine around $10,000.
Vincent Padilla:
3 years State Prison
Thousands of dollars in restitution for stolen labor
General fine around $10,000.