Federal authorities close stores owned by Sacramento city councilmember during raid

October 28, 2023 By Theresa Clift 1 Comment

Federal authorities closed supermarkets owned by Sacramento City Councilman Sean Loloee — who has been accused by prosecutors of withholding wages for employees — following a raid Thursday.

“The Homeland Security Investigations and the IRS criminal investigations have conducted an ‘authorized criminal enforcement activity’ at the Viva Supermarket locations,” said John A. Pearl, a spokesman for the IRS. “To protect all parties involved, including the agents and subjects of the investigation, that’s all I can share with you at this moment.”

Loloee, who owns the Viva Supermarket in Del Paso Heights, 3845 Marysville Blvd., and two other locations in the capital region, has been scrutinized three times by federal prosecutors since 2009. Investigators said he violated federal minimum wage, overtime compensation, record keeping and child labor laws, according to The Sacramento Bee’s previous reporting. A follow-up investigation in 2020 found that he allegedly violated these laws again, and then a third investigation alleged he coerced employees.

Jennifer Cho, a special agent with the IRS’ Criminal Investigation unit, declined to say if the raids were connected to any investigation into Loloee or whether any arrests had been made. She also declined to say if each Viva Supermarket had been searched or if authorities conducted their operations at any residences.

A video uploaded to Facebook by a resident showed Homeland Security agents inside the store and a sign on the store saying it was closed. Viva Supermarkets at 4211 Norwood Ave. in Sacramento’s Glenwood Meadows neighborhood, and at 10385 Folsom Blvd. in Rancho Cordova, each had signs outside saying, “Sorry Temporarily Closed” on Thursday afternoon.

The signs at the Rancho Cordova location were affixed with red tape reading, “U.S. Customs and Border Protection” and “Evidence — Do not open.” Agents with Homeland Security Investigations, part of U.S. Immigration and Customs Enforcement, were spotted inside the closed store.

Homeland Security Investigations confirmed in a statement its involvement in the raids with the IRS and the California Department of Justice. The agencies conducted a “court authorized criminal law enforcement activity” at several locations in the Sacramento-area, an emailed statement said.

The state Department of Justice wrote in an email it was unable to comment on, even to confirm or deny, a potential or ongoing investigation.

Agents on Thursday afternoon were beginning to remove “temporarily closed” signs at the Rancho Cordova supermarket. Some law enforcement officials were taking electronics and boxes.

Loloee did not immediately respond to requests for comment. There was no activity at his home in Hagginwood, and the councilman could not be found at his Natomas office early Thursday afternoon.

“The issue you’re emailing about is personal matter related to the Councilmember’s businesses and is not connected to his work at City Hall,” Loloee’s office said in an emailed response. “We would encourage you to reach out to Viva Supermarkets for questions or comments regarding the matter.”

A spokesperson for Viva could not immediately be reached for comment.

Loloee, who sits on the governing board of the Sacramento Public Library system, was not present at the beginning of a 3 p.m. board meeting.

Reached around 2:15 p.m., Denicia Valdez-Jones, a staffer in Loloee’s office, said she believed Loloee was touring potential sites for temporary housing in his district, which spans most of North Sacramento.

Margo Santana, who posted a video of one of the morning raids to Facebook, speculated he may be at his wife’s home in Granite Bay. The city commissioned an investigation last year into claims that Loloee lived there rather than the Sacramento home he purchased in 2019; a local attorney who conducted that investigation concluded last October that Loloee does live in the council district he represents.

The residency controversy continues to draw skepticism from some residents.

“He’s probably in Granite Bay where he lives,” Santana said. “Why would he be here?”

Click here to read the full article in the Sacramento Bee via Yahoo News

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BREAKING:  California EDD ‘Structurally Insolvent’

July 10, 2023 By Thomas Buckley 6 Comments

‘The latest EDD catastrophe will force ‘the business community to pay for the incompetence of the government’

The Unemployment Insurance (UI) trust fund the California Employment Development Department uses to pay benefits is now “structurally insolvent” a new Legislative Analyst’s Office report states.

The report – a reaction to the “May Fund Forecast” released by the EDD last week  states quite bluntly that the “temporary” – now about 15 years and not the six or seven years the EDD originally projected – federal surcharge will be used to cover on-going bills before actually paying the $18 billion-dollar federal debt the agency incurred due to gross incompetence during the pandemic.

That additional tax works out to be about $1,500 per California employee over the next 15 years (it starts at $21 per employee and rises until it hits $420 per year until the debt is paid.)

The state is using that money now to pay benefits (which are guaranteed by the feds so no matter what financial shape the EDD is claimants will still get paid.)

But the report notes that even without the pandemic debt, the state would still have to borrow money over the next few years, an utterly novel situation in a putatively “good” economy (though the pandemic debt is the cause of the insolvency and the size of the tax hike.)  

The structural insolvency will last for at least two to five years.

“Historically, benefit payments have only exceeded contributions during major economic downturns – most recently, during the pandemic and Great Recession,” the report states.  “For the first time, the fund is expected to be out of balance during a period of job growth.”

While the EDD expects to take in about the same amount of regular UI tax money in the next couple of years – $5.3 billion per – it will spend about $2.6 billion more than that, driving the current $18 billion (including interest, which will for some time add an extra $300 million a year or so to the debt) to $20.6 billion dollars.

Neither the EDD nor the Governor’s Office replied to request for comment.  As per Globe practice, those questions are at the bottom of this article.

Besides clearly showing the utter mismanagement of the agency over the past umpteen years (Sacramento insiders call the EDD “the place where state careers go to die”), the latest crushing blow could finally prompt reform of the agency. That reform, however, could cause even more issues as it could lead to additional UI taxes in one form or the other.

Currently, the state has one of the highest unemployment tax rates in the country, but, oddly, the lowest “taxable wage ceiling” rate possible. Taxes are paid on only the first $7,000 of income per employee, meaning the part-time intern costs the same to insure as the CEO even though the amount in benefits they would receive if laid off are wildly different.  The state has not changed this base rate in about 50 years, while wages and, therefore, the benefits offered have risen dramatically since.

Additionally, the rates employers pay vary depending upon whether or not they have had significant layoffs and other similar issues that strain the unemployment system in the past; “stable” employers can expect to pay only about one-third the rate of “problematic” ones, but the debt obligation to the feds is essentially paid equally by everyone.

Changing that system – especially the wage ceiling – has been a topic of discussion for some time as most other states do have higher wage ceilings but lower actual per-employee tax rates (not necessarily actual taxes, but tax rates.)  

“As noted by LAO, California’s UI financing scheme needs to be reformed,” said Audrey Guo, Assistant Professor of Economics at Santa Clara University.  “Even if the current debt were repaid from the federal relief funds, solvency problems will continue to crop up in future recessions, unless actual UI tax increases are implemented which policymakers have been hesitant to do because it’s seen as a tax increase on employers.”

Guo and others who have backed such reform have in the past usually called it “revenue neutral,” i.e. the total EDD haul stays the same – low wage taxes go down and higher wage jobs are taxed more to cover the cost of the higher concomitant benefits.

Given the political make-up of state government at this time, the chances of any such change actually being revenue neutral is, not to put to fine a point on it, both physically and literally impossible in this particular political space-time dimension.

Rob Moutrie, a policy expert with the California Chamber of Commerce, said his group is “disappointed to see that California businesses will be paying an extra tax for even longer than expected.”

Moutrie did note that the UI fund “was never intended to be used by the state as a society-wide social safety net” and that, unlike California, other states realized that unique situation and made sure to pay any pandemic debt they incurred down immediately.

The state is now one of two (and the Virgin Islands) that has any remaining debt, accounting for 73 percent of that debt nationwide (New York is the rest.)

California lost about $40 billion to unemployment fraud during the pandemic, the vast majority of which could have been prevented early on with a $5 to 10 million expense to institute some kind – any kind, as the state literally had none – of fraud prevention identity security system.  Instead, then-labor department chief Julie Su – who was aware of the problem – waited months to install such a system.

What – if any reform – will occur is unknown, but whatever it is may not be happening soon.  Gavin Newsom is kinda sorta maybe-ish running for president – well, more positioning himself to be tapped as the savior when the Democrats finally admit that Biden is mentally incapable of continuing for health reasons and Vice President Harris is, just, well, mentally incapable in general.

Being seen to raise taxes right now could harm Newsom with a national audience (won’t matter except to the people who actually pay taxes in California and politically that’s not a big enough number.)  Having the EDD raise its disfigured head in any way over the next 18 months is something Newsom is looking to avoid, so it can be expected that any major change will (maybe?) take place after the 2024 election.

“It’s possible that legislators view the federal surcharge as a way to avoid action and keep kicking the can down the road,” Guo said.  “At this point reform (i.e. mandates) at the federal level may actually be the most effective way of shoring up the state’s UI program.”

Tom Manzo, founder of the California Business and Industrial Alliance, said the latest EDD catastrophe will force “the business community to pay for the incompetence of the government, as it has done again and again and again.”

He also believes any stab at reform will wait until after Newsom has left office.

One way or the other.

Click here to read the full article in California Globe

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Former Congressman Arrested Over Venezuela Ties

December 10, 2022 By Joshua Goodman and Terry Spencer 3 Comments

Miami Republican is accused of laundering money, representing a foreign government without registering.

WASHINGTON — A former Miami congressman who signed a $50-million consulting contract with Venezuela’s socialist government was arrested Monday on suspicion of money laundering and representing a foreign government without registering.

David Rivera, a Republican who has been marred by scandals dating back to his days in Congress from 2011 to 2013, was arrested at Atlanta’s airport, according to the U.S. attorney’s office in Miami.

The eight-count indictment alleges that Rivera, at the start of the Trump administration, was part of a conspiracy to lobby on behalf of Venezuela to lower tensions with the U.S., resolve a legal dispute with a U.S. oil company and end U.S. sanctions against the South American nation — all without registering as a foreign agent.

The indictment cites meetings in Washington, New York and Dallas that Rivera either attended or tried to set up for allies of Venezuelan President Nicolas Maduro with U.S. lawmakers and a top Trump aide.

To hide the sensitive nature of his work, prosecutors say, Rivera referred to Maduro in chat messages as the “bus driver,” a congressman as “Sombrero” and millions of dollars as “melons.”

While none of the U.S. officials is named, evidence in a parallel lawsuit brought against Rivera show that, while working for Venezuela, the former congressman was in contact with Florida Republican Sen. Marco Rubio, a longtime friend who helped drive the Trump administration’s hard-line policy on Maduro.

As part of the charm offensive, Rivera also looked to set up a possible flight and a meeting on the jet between a pro-Maduro businessman and a female campaign advisor-turned-White House “counselor” on June 27, 2017 — the same day Trump aide Kellyanne Conway was in Miami for a fundraising dinner with Miami Republicans.

Rivera also roped in GOP Rep. Pete Sessions of Texas to try to set up a meeting for Venezuela’s foreign minister with executives from Exxon, which was headquartered in Sessions’ district at the time.

In July 2017, for example, the indictment alleges that Rivera wrote text messages to an unnamed U.S. senator ahead of a key meeting at the White House where he hoped the senator would discuss a possible deal to end Venezuela’s stubborn political conflict.

“Remember, US should facilitate, not just support, a negotiated solution,” he wrote. “No vengeance, reconciliation.”

Rubio’s and Sessions’ offices didn’t immediately respond to requests for comment.

Pressure has been building on Rivera for more than two years after it emerged that he received the massive contract from a U.S. affiliate of Venezuela’s state-owned oil company as Maduro was trying to curry favor with the Trump administration.

Rivera’s Interamerican Consulting was sued in 2020 by PDV USA — a Delaware-based affiliate of Venezuelan-owned Citgo — for not living up to the contract he signed in 2017 for three months of “strategic consulting.”

Although Rivera’s contract was originally signed with a U.S. entity, any work he performed on behalf of Maduro’s government or Venezuelan business interests required him to register as a foreign lobbyist.

It was something prosecutors say Rivera acknowledged himself in October 2017 when he sent a text message relaying a lawyer’s advice to stay away from parent company PDVSA in Caracas, with failure to do so risking “a scandal of monumental proportions.” Three weeks later, prosecutors say, Rivera received a $5-million payment from PDVSA’s account at Gazprom Bank in Russia.

Rivera, 57, has maintained his innocence and has countersued PDV USA, alleging breach of contract and unjust enrichment for its failure to pay $30 million he says he is still owed. A lawyer for Rivera said he had not seen the indictment, and Rivera did not immediately respond to a request for comment.

The U.S. Marshals Service said Rivera bailed out of jail Monday afternoon after making an initial appearance in Atlanta federal court.

Around the time Rivera was hired, Maduro’s government was seeking to court the new Trump administration, donating $500,000 to the new president’s inaugural committee through Citgo. The outreach effort ultimately failed, as the U.S. in 2019 recognized opposition lawmaker Juan Guaidó as Venezuela’s legitimate leader and imposed stiff oil sanctions on the OPEC member nation in a bid to unseat Maduro.

Records that emerged as part of the ongoing lawsuit show that Rivera’s consulting work was closely coordinated with Raul Gorrin, a Venezuelan insider and media tycoon who has been sanctioned and indicted in the U.S. on money-laundering charges.

Correspondence introduced as part of the lawsuit shows Rivera and Gorrin discussing buying “concert tickets” — a possible code word for bribes — for unnamed officials and attempting to coordinate a meeting between Venezuela’s foreign minister and executives from Exxon.

As part of that effort, they also roped in Sessions, who secretly traveled to Venezuela in 2018 to meet with Maduro.

Before being elected to Congress, Rivera was a high-ranking Florida state legislator, serving from 2003 to 2010 in the House. During that time, he shared a Tallahassee home with Rubio, who eventually became Florida House speaker.

Click here to read the full article in the LA Times

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Former California police chief charged in CalPERS double-dipping fraud case

November 25, 2022 By Randy Diamond 2 Comments

Criminal charges of grand theft have been brought against Greg Love, one of several Broadmoor Police Department chiefs and commanders that CalPERS said defrauded the pension system by collecting more than $2 million in excessive retirement payments. Another former chief, however, David Parenti, won’t be subject to any criminal prosecution. This despite CalPERS’ contention that he committed one of the largest frauds in its history. The pension plan said Parenti illegally received pension benefits of $1.8 million while with the 11-member department located 2 miles outside of San Francisco. The reason for a lack of criminal action? CalPERS misplaced the records for more than four years that detailed a complaint by a police officer at Broadmoor that his boss, Parenti, was double-dipping, collecting retirement benefits while drawing a salary as police chief and other positions, said San Mateo County Prosecutor Steve Wagstaffe. Wagstaffe said the four years is the statute of limitations for state criminal cases and CalPERS informed him of fraud violations in Parenti’s case only in 2021 after an audit of Broadmoor. That was more than four years after it received the original complaint about Parenti’s fraudulent behavior, Wagstaffe said.

“How they missed it is beyond me,” he said. “Purely on their failure to follow up on things is why Mr. Parenti is able to go free.” When The Bee reached out CalPERS officials, they did not address the missing complaint against Parenti. Instead, they disputed that the district attorney could have not proceeded criminally against him. “While charging decisions are the DA’s prerogative, we don’t necessarily agree that the statute of limitations has run in this case or that there aren’t other ways of pursuing this matter criminally,” CalPERS Chief Counsel Matt Jacobs said in a statement.

Jacobs didn’t go into specifics. Parenti’s civil attorney, Scott Kivel, said his client’s position is that he did not receive illegal retirement payments. CalPERS is seeking the return of the $1.8 it said that Parenti obtained fraudulently. Love, who was charged on November 15 by the San Mateo County District Attorney’s Office, collected around $700,000 in pension benefits after retiring from the police chief’s position in 2009 through 2012, Wagstaffe said. Love is scheduled to be arranged on December 9. His attorney Jeffrey Hayden did not respond to requests for comment. Love’s May 2009 retirement only lasted two days, even after receiving an unspecified workers compensation disability payout, which stipulated that he could no longer work as police chief, a CalPERS audit in 2021 showed. Love continued to be the full-time salaried police chief for Broadmoor through 2012 while continuing to collect the retirement benefits at the same time, the CalPERS audit determined. Wagstaffe said Love faces up to four years in prison. EQUAL JUSTICE? The District Attorney said he and his staff have had discussions about the different outcomes for Parenti and Love and whether that is fair. “Parenti is going to go free and Love is held accountable,” he said. “But in the end everyone gets evaluated individually. We have a job to do. We can’t try to even the playing field.” Wagstaffe, a long-time employee of the San Mateo County District Attorney’s Office, said he has had frequent dealings with Love in their roles as law enforcement officers over the years. “He is not a bad person,” Wagstaffe said. “It was a bad act that violated the law. He violated CalPERS rules and has to be held accountable.” The DA said he did ask the U. S. Attorney’s Office in San Francisco to consider taking the criminal case against Parenti, because federal statute of limitations is six years, two years longer than the state rules, but officials refused without disclosing why. The Broadmoor police department audit by CalPERS in 2021 and subsequent CalPERS findings found that Parenti and Love committed most of the department’s alleged fraudulent retirement benefits, totaling $2.3 million. While Love was found by CalPERS to have collected retirement benefits and salary for three years from 2009 to 2012, Parenti was accused of defrauding the pension system for 12 years from 2007 to 2019. CalPERS contends the fraud included Parenti receiving workers compensation disability settlement from the Broadmoor Police Department of $108,500 on August 4, 2017. While the settlement should have ended Parenti’s career, he continued working as a commander for the department full-time for two more years. This occurred, the CalPERS 2021 audit said, while Parenti continued to receive retirement benefits. HOW DID CALPERS ERR? What remains a mystery is how CalPERS missed the original complaint against double-dipping at Broadmoor. The former Broadmoor police officer who told CalPERS of Parenti’s double-dipping, Steve Landi, said in a Bee interview in February that he had reported the fraud to the pension system in November 2016. “They were lining their pockets for years,” Landi said. “It’s corruption at its finest.” CalPERS had insisted to The Bee that it never received Landi’s complaint. Wagstaffe said CalPERS officials first denied to him that there was a previous complaint, insisting they learned of the Broadmoor fraud first during the 2021 audit. “CalPERS originally told us (in 2021) we knew nothing about this until a little while ago,” Wagstaffe said, referring to CalPERS audit findings that year. He said after his agency insisted CalPERS conduct a review: “They found the complaint from Landi in their records.” Wagstaffe said there was break-down at CalPERS that it missed the complaint of fraud for more than four years. “Ultimately, we pressed them and pressed them and pressed them and they looked at the records, and said oh yeah it (the double-dipping fraud) was reported to us by one of the other officers in Broadmoor.” Wagstaffe’s statements raise new questions about the effectiveness of CalPERS to root out double-dipping and other violations of pension system rules. AN EARLIER CONCERN Broadmoor was under scrutiny by CalPERS for failing to enroll some officers in the pension fund in 2017, CalPERS has previously disclosed, but not for the double dipping by top police personnel. Former CalPERs insider J.J. Jelinicic told the Bee in February that the CalPERS division that monitors employee enrollment issues has little coordination with another unit assigned to examine double-dipping and other state retirement rule violations. “The right hand doesn’t know what the left is doing,” said Jelincic, a former CalPERS investment staffer and board member. Even routine audits of CalPERS employer units, like the one that discovered problems at Broadmoor, are rare given the large size of the pension system, which covers more than 2 million active and retired members and has more than $430 billion in assets. Around 240 audits are done a year but there are around 3,000 separate employer units representing municipalities, special districts and school systems that are part of CalPERS. On that schedule, it would take 12 years for every CalPERS agency to be reviewed. The pension system also represents state employees. Broadmoor is one of the smallest of the 3,000 CalPERS employers. In fact, the Broadmoor Police Protection Department is an anomaly in the state of California. There is no town or city of Broadmoor. The police department covers an unincorporated part of San Mateo County of several square miles and is surrounded by Daly City on three sides and Colma on one side. It serves around 8,000 residents. While he is facing no criminal penalties, CalPERS continues to demand that Parenti return the $1.8 million in retirement benefits he received between 2007 and 2020 while working as a police chief and in other positions at Broadmoor. “We are continuing to aggressively address Mr. Parenti’s actions on the civil front,” said CalPERS Chief Counsel Jacobs in his statement. “We strongly believe he wrongly received some $1.8 million in retirement benefits and will continue to pursue repayments of those funds.”

Click here to read the full article at the Sacramento Bee

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EDD Debit Card Program Rife with Fraud, Reports of Unemployed Californians Not Getting Their Money

November 23, 2022 By Cristy Fajardo 3 Comments

With rent due, Daryl Stanczack was counting on money from unemployment, but on November 1, he found he was overdrawn.

“You expect to get it,” said the Long Beach resident. “You expect to have it there.” 

He says he soon learned someone had duplicated his Employment Development Department (EDD) debit card and stole his benefits payment. But what surprised him even more was Bank of America’s response. 

The bank is responsible for issuing and administering the cards for the state of California.

“I got to the bank and they’re, ‘Yeah, this happens all the time,’” he said. “I’m like, ‘Wow, if this happens all the time they should change it, make it better.’”

He’s far from alone. In fact, a FOX 11 investigation found the EDD debit card program is rife with scammers, complaints and problems. 

SUGGESTED: California inflation relief payment scams: What you need to know

This past July, the federal Consumer Financial Protection Bureau (CFPB) fined Bank of America $225 million over the bank’s botched disbursement of unemployment benefits in multiple states during the height of the pandemic. 

But our investigation has found innocent people are still being left in the lurch. Enter the search terms “BofA” and “EDD” in the CFPB website and you’ll see more than 3 million complaints from about a dozen states.

In recent weeks, beneficiaries have complained that their funds have been frozen for a year or that they had thousands transferred out of their account. Bank of America says it froze accounts due to widespread fraud, but in a letter to California lawmakers, the finance giant admitted at one point as many as 488,000 accounts in California were frozen. 

Among them were legitimate beneficiaries who tell FOX 11 they were left without their money at a time when businesses were shuttered and they needed their money the most.

In a statement to FOX11 Bank of America said, “As California’s unemployment program faced tens of billions of dollars in fraud, Bank of America’s goal always was to ensure legitimate recipients could access their benefits. Bank of America partnered with the state to identify and fight fraud throughout the pandemic, identifying hundreds of thousands of suspicious cards and assisting the state in protecting billions of dollars.”

“We need more clarity about what banks can and cannot do in terms of freezing your money if there’s a problem,” says Lauren Saunders, the associate director of the National Consumer Law Center in Washington, D.C. 

The advocacy group takes on big banks as part of its mission to protect consumers. She says the state should have given beneficiaries should have a choice on how they get their payments.

The state of California rolled out the program back in 2010, partnering with Bank of America. The EDD argued many beneficiaries didn’t have bank accounts and so the EDD debit card was better than sending checks. 

Bank of America would issue the cards at no cost to the state and in exchange, California would get a share of the profits. Most of the fees come from merchants, who pay up anytime a customer uses the card, but Bank of America would also collect interest on the funds in people’s accounts. 

We wanted to know how much the agreement has brought in for the state. The EDD’s own documents show that it has collected almost $200 million from the agreement. The amounts were modest in the first year, bringing in hundreds of thousands of dollars a month. But then, during the pandemic, those numbers jumped to six million in just one month.  In fact, 2020 was a profitable year for the state, raking in $47 million from the cards.

“Is the fact that the state is making money off it impacting their choices?” Saunders asks. “We don’t know.”

No one from the EDD agreed to go on camera, and when we asked for specifics on how the profit share is calculated, the EDD press office said they needed to check with their attorneys, then didn’t get back to us. 

“We definitely should know how much the consumer is paying in fees.” Saunders said. “We should know
if there is a way of reducing those fees.”

We don’t know how much came from consumer fees, but last year Bank of America told California lawmakers that it had brought in $687 million, but had spent $927 million. The Bank added it had lost $240 million between January of 2011 and the same month in 2021 in part due to criminals and fraud.

The bank now wants out of the EDD card business, but California said, “no.” The state exercised an option in the contract to keep the program going.

As for Stanczack, he got his money refunded, but wishes he’d been given a choice on how to get his money. He now has a new card and just interviewed for a job in his field of commercial plumbing, which he hopes will mean he won’t have to worry about EDD scammers stealing his money again.

Click here to read the full article at FoxNewsLA

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California State Custodian Didn’t Work for 4 years, Collected $185,000 in Pay and Benefits

July 30, 2022 By Wes Venteicher Leave a Comment

A California Department of General Services custodian did almost no work for four years but collected $185,000 in pay and benefits through a fraudulent scheme with his supervisor, according to a California State Auditor investigative report published Thursday. The custodian and his boss, neither of whom are identified in the report, coordinated from 2016 through 2020 to collect the custodian’s unearned paycheck and then to split the money, according to the report. The pair “very likely engaged in a criminal conspiracy” and “also appear to have violated sections of the Penal Code that prohibit the embezzlement and misappropriation of public funds and the falsification of accounts by a public employee,” the report states.

The auditor’s office contacted the Department of General Services in December 2020 after receiving allegations of fraud, according to the report. The department discovered supporting evidence and sent it to the Department of Justice in January 2021, but the DOJ closed the investigations “without providing an explanation for its decision,” the report said. DOJ, in a statement late Thursday afternoon, disputed auditor’s account.

“While the California Department of Justice does not typically announce our investigations to the public, it is inaccurate to say that the investigation of this case was closed,” the department said. We appreciate the state auditor’s work here and their office’s effort to add to our existing investigation.” The auditor’s office pursued its own investigation, eventually securing admissions from both the custodian and supervisor, according to the report. The report indicates the custodian and the supervisor resigned. The Department of General Services didn’t immediately respond to questions. The investigative report summarized the department’s response, saying it would contact law enforcement and pursue disciplinary action against the supervisor.

“DGS added that the alleged behavior is a violation of its values and it will review its policies and procedures to prevent these activities from recurring,” the report states. The supervisor hired the custodian, whom he had worked with previously at a state agency, in November 2016. The custodian stopped coming into work about a month later, when the two initiated the scheme, according to the report. The supervisor filed false time sheets on behalf of the custodian for nearly four years, for a total of $142,000 in monthly pay and $43,000 in benefits, according to the report. The supervisor delivered the custodian a paycheck every month around payday for the duration of the scheme, and the custodian gave his boss cash payments in exchange, the report said.

The two men provided different accounts of how much money they each took home from the checks, according to the report. The custodian admitted that the only work he did in the four-year period was delivering some documents “two or three times” to the Department of General Services’ Sacramento headquarters. A former building manager who oversaw the supervisor failed to provide “even minimal oversight” of the roughly 20 employees he oversaw, according to the report. “Had the building manager exerted even minimal effort in executing his duties as a supervisor to ensure accurate time and attendance records, he would have noticed that the custodian was absent,” the report states. Even after receiving multiple complaints about the supervisor, the building manager took no action, enabling the supervisor to carry out up to about $99,000 in additional abuses in coordination with another employee, who was an office technician, according to the report. The scheme came to light when the Department of General Services hired a new manager in December 2020. The manager found documentation saying the custodian had retired in August 2020, but when he started asking around, no one in the office knew the individual, according to the report.

Click here to read the full article at the Sacramento Bee

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Compton City Council Election Overturned in Wake of Vote Rigging Scandal

June 1, 2022 By James Queally 2 Comments

Results of a Compton City Council race decided by one vote have been overturned following an election rigging scandal that prompted criminal charges against the winner last year.

Two-term Councilman Isaac Galvan must be replaced by his challenger, Andre Spicer, after a judge determined that four of the votes cast in the election were submitted by people who did not live in the council district that the two men were vying to represent, according to a 10-page ruling issued Friday by Superior Court Judge Michelle Williams Court.

After a contentious primary, Galvan and Spicer advanced to a runoff in June 2021, which Galvan won, 855 to 854. With the four illegal ballots disqualified, Court ruled that Spicer was the rightful winner of the election by a tally of 854 to 851.

Calls to Galvan and Spicer were not immediately returned Monday. Spicer, a Compton native and entrepreneur, told NBC he was “elated” by the ruling.

It was not immediately clear when Spicer would take office. A spokesman for the Los Angeles County Registrar referred questions to the city. Compton Mayor Emma Sharif did not immediately return a call seeking comment Monday.

The municipal contest drew attention in August, when the Los Angeles County district attorney’s office charged Galvan with election rigging and bribery.

Prosecutors alleged that Galvan conspired with primary opponent Jace Dawson to direct voters from outside the council district to cast ballots for Galvan in the June runoff against Spicer. Galvan was also accused of trying to bribe an elections official with concert tickets, according to the criminal complaint. The official immediately reported the attempt, according to Dean Logan, the county’s top elections official.

Dawson, Kimberly Chaouch, Toni Sanae Morris, Barry Kirk Reed and Reginald Orlando Streeter were charged with two counts each of conspiracy to commit election fraud last summer. When she ruled on Spicer’s election challenge Friday, Court found that Chaouch, Morris, Streeter and a man named Jordan Farr Jefferson all voted in the runoff between Spicer and Galvan despite not living in the Compton City Council’s second district.

Chaouch, Morris, Streeter and Jefferson all listed Dawson’s address in Compton as their home when registering to vote in the race, according to the 10-page ruling.

Six days after the race, Chaouch admitted on a recorded line that she actually lived in the Los Feliz neighborhood of Los Angeles and that Dawson had her register to vote from his address, court records show.

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Phone Scammers Threaten Victims With Arrest, Collect Millions in ‘Fines’

December 23, 2015 By Susan Shelley 5 Comments

Photo Courtesy of 401(K) 2013, Flickr

Photo Courtesy of 401(K) 2013, Flickr

The average American commits three felonies a day. That’s the estimate from Boston civil-liberties attorney Harvey Silverglate, who says the nation has so many vague laws, that honest people are constantly breaking them without even knowing it.

So when scammers posing as employees of the FBI, IRS or U.S. marshals call people on the phone and tell them they’ve broken some law, who knows, it may even be true.

However, regardless of whether the person receiving the phone call has actually broken a law, the real FBI, IRS and U.S. marshals don’t call people up and threaten to arrest them unless they immediately follow instructions to pay thousands of dollars with a prepaid debit card.

Law enforcement officials have described these calls as highly intimidating. The scammer typically begins by advising the targets that there are federal charges against them, and then threatening legal action and arrest. If questioned, the caller gets more aggressive, warning of frozen bank accounts and confiscated property.

Next, the fake government agent says it will cost thousands of dollars in fees, taxes or court costs to resolve the matter and avoid arrest. Specific instructions are given on how to buy a prepaid debit card and make a payment within the hour. Sometimes the scammer insists on staying on the phone until the victim returns with the card and reads the numbers, warning that if it takes too long, the fees will increase.

The U.S. Marshals Service recently issued a warning that phone scammers impersonating marshals were calling homes in Cincinnati, Ohio. Authorities in Tennessee and Michigan also reported a holiday season uptick in this particularly nasty telephone fraud. And it’s happening in Los Angeles, too.

Woodland Hills resident Lucy Silva said she first received one of these threatening calls on her cellphone about two years ago, and the most recent one within the last month.

“He said if I didn’t send them $3,000 immediately, they were going to come right over and arrest me,” Silva said. “I happened to be in New York at the time, so I just said to him, ‘Hey, bring it on.’”

Silva, a hair stylist, said one of her clients received a scam call from someone pretending to be her grandson, stating that he was in Peru and needed money right away.

“Her grandson really was in Peru,” Silva said, “and this guy knew it. He even knew how many siblings he had.”

The scam was foiled when the grandmother quizzed the scammer about the names of her other grandchildren. He hung up the phone.

Impersonation scams are made easier with social media sites like Facebook, which display the names of friends and family. Be cautious about accepting “friend requests” from total strangers who live in places like Nigeria.

Many of these con games are phoned in from Third World countries. The caller’s phone number is sometimes spoofed so that a real law enforcement agency phone number shows up on the Caller ID.

Internet technology has made scamming much easier and more profitable, and so has the growth in the use of prepaid debit cards.

Americans now spend about $80 billion a year on prepaid debit cards, an amount that has doubled since 2010. But at least one of these products was pulled from the market because of its popularity with online and telephone swindlers.

Green Dot, a Pasadena-based company, stopped selling its MoneyPak product in 2014. The popular green-and-white payment cards had a unique numerical code on the back that allowed anyone who obtained the code, anywhere in the world, to “unlock” the money and “reload” another debit card, in complete anonymity.

In 2013, consumers lost $30 million dollars to scams involving MoneyPak cards, by Green Dot’s estimate. The Federal Trade Commission says consumers reported losing $42.86 million to fraud involving prepaid debit products that year, but officials suspect that the total could be much higher because many victims do not report that they’ve been scammed.

If you get one of these calls, the FBI advises, resist the pressure to act quickly. Always be cautious when someone insists that you must use a specific payment method, which the government would not do. If you feel threatened, call the local police department.

Or you could tell the scammer that the National Security Agency is monitoring your calls and wants you to keep all callers on the line for at least two minutes so they can get their coordinates.

Who knows, it may even be true.

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