Seven former city officials from Beaumont were arrested on Tuesday – including the former City Manager, Police Chief, and City Attorney – after a yearlong investigation. The investigation reveals that the seven individuals used their positions to take in a huge sum of money.
The total amount of money taken in this case is alleged to be $42,967,421.90 – according to the Press Enterprise.
Those charged are former City Manager Alan Kapanicas, former Finance Director William Kevin Aylward, former Police Chief Francis Dennis “Frank” Coe Jr., former Economic Development Director David William Dillon, former Public Works Director Deepak Moorjani, former Planning Director Ernest Alois Egger and former City Attorney Joseph Sandy Aklufi.
All but Egger were arrested Tuesday – and he is expected to turn himself in on Wednesday.
The District Attorney’s office issued a timeline of events at a press conference on Tuesday (via Press Enterprise):
In the early 1990s, the City of Beaumont brought in Urban Logic Consultants principals David Dillon, Ernest Egger, and Deepak Moorjani to serve as heads of its planning, economic development, and public works departments. Alan Kapanicas was brought in as City Manager, William Aylward as City Finance Director, and Joseph Akulfi as City Attorney. It is alleged in this case that the defendants used their positions as Beaumont city officials to funnel work to their own companies. Dillon, Egger, and Moorjani are charged with violating Government Code section 1090 for their role in advising the city to issue new bonds while at the same time making payments to their own company out of the money generated from the bond sales. Section 1090 prohibits public officials from participating in the making of a contract in which they have a financial interest.
In 2003, the City of Beaumont adopted an ordinance mandating that the city collect the Transportation Uniform Mitigation Fee (TUMF) on all new development. Under the law adopted by the city, the TUMF was required to be sent to the Western Riverside Council of Governments (WRCOG) to be pooled with fees from other areas of Riverside County and used on regionally significant transportation projects. Although the defendants caused the city to collect the TUMF, they are accused of failing to give the money over to the regional program as required by the law. Instead, evidence shows they maintained control of the TUMF and used the money on projects in Beaumont, awarding the work to their own companies. In the process, the defendants manipulated documents and made misrepresentations to WRCOG in order to illegally maintain $36,606,190 in collected TUMF. Dillon, Egger, Moorjani, Kapanicas, Aylward, and Aklufi are charged with multiple counts of embezzlement of public funds by a public officer, Penal Code sections 504 and 514, as well as an aggravated white collar crime enhancement and an enhancement for excessive loss.
From 2010 to 2013, Kapanicas, Aylward, and Francis Coe, who was the Beaumont Police Chief at that time, came up with a way to loan then-Chief Coe $45,000 of city money, interest free. In total, the defendants loaned $113,773 of city money — interest free — to members of the Beaumont Police Department. The defendants never asked the Beaumont City Council for approval of these interest free loans. Kapanicas, Aylward, and Coe are charged with conspiracy and misappropriation of public funds, Penal Code sections 182 and 424, for lending the public’s money in a manner not authorized by law.
From 2009 to 2015, Kapanicas and Aylward falsely inflated sales tax in the City of Beaumont by lending the city’s resale tax permit to a private business, Beaumont Electric. The scheme required that the defendants lend city funds to Beaumont Electric to make purchases for electrical equipment. The private company was never required to sign a contract, never required to agree to any terms for the timely repayment of the debt, and never required to pay any interest. The defendants never asked the Beaumont City Council for approval before loaning a total of $6,247,458.86 of city money to a private company. Kapanicas and Aylward are charged with conspiracy and misappropriation of public funds, Penal Code sections 182 and 424, for misusing the public’s money.
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