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San Mateo County Mosquito and Vector Control District - Press Release

From: Bob Gay <rgay_at_(domain_name_was_removed)>
Date: Thu, 8 Dec 2011 13:21:28 -0800


County Supervisors/City Managers and Mayors/County Treasurer,

The following press release was submitted to the media outlets on Monday, December 5, 2011:

San Mateo County MVCD is the victim of embezzlement.

The General Manager of the San Mateo County Mosquito and Vector Control District, Robert Gay, reports that the District has been the apparent victim of theft, fraud, forgery and embezzlement by two former District employees, who carried out the criminal acts during their employment.

District Manager Gay reported to the Board of Trustees that a forensic audit of District financial data has revealed a complex and sophisticated method of misuse and theft of District funds and property believed to total more than $647,000. The vast majority of the loss occurred within the last fiscal year.

The scheme was uncovered when a member of the Board of Trustees raised concerns about certain reported expenditures within the District's pesticide account. When Mr. Gay's request for explanation resulted in unsatisfactory responses from the staff members responsible for District finances, Mr. Gay promptly arranged to have an outside CPA firm conduct an audit.

Immediately upon suspicion that wrongdoing may have occurred, Mr. Gay reported the matter to the San Mateo County District Attorney Office, which launched a criminal investigation. The District has been cooperating with District Attorney Investigators throughout the investigation. On completion of their investigation, the DA will file criminal charges.

One of the apparent perpetrators was terminated by the District, and another voluntarily resigned prior to the discovery of her involvement. Any other employees determined to have had knowledge of the wrongdoing and failed to report it, or knowingly benefitted from the wrongdoing, will also face discipline.

In consultation with recommendations of the forensic audit team, the District implemented additional fiscal safeguards, including policies and procedures to further bolster transparency and accountability for all financial transactions.

The District is actively pursuing recovery of the lost funds, including expenses incurred in the recovery of the assets, through available insurance coverage. The District is also planning to seek restitution from the perpetrators through civil suit and the anticipated criminal prosecution.

Public employees who engage in financial wrongdoing such as the acts perpetrated against San Mateo County MVCD are responsible for a monumental betrayal of public trust. The District will take all appropriate actions to ensure that the wrongdoers are held accountable to the fullest extent of the law, and to recover the funds stolen.

The media outlets were notified on Monday to direct their questions to Robert Gay, District Manager at 650-344-8592. Questions related to the criminal investigation or prosecution were to be directed to the District Attorney's Office at 650-363-4636.


Currently:

  1. The District has been cooperating with the District Attorney Investigators and we anticipate criminal charges will be filed.
  2. We believe the apparent perpetrators, both in the Finance Department acted in collusion. One has been terminated and the other resigned when an audit was scheduled. Any other employees found to have knowledge of the wrongdoing and failed to report will face discipline.
  3. The District has recently hired two new employees in the Finance Department. Both went through extensive criminal and credit back-ground investigations by ADP Screening and Selection Services.
  4. The District engaged Jeff Ira from C.G. Uhlenberg to provide a special team of auditors to perform a forensic audit for supporting the District Attorney Investigators criminal case.
  5. The District also engaged Jeff Ira's auditors to perform a complete rework of the District financial records for Fiscal Year 2010-11 and provided financial staff until the new employees were hired.
  6. The District has filed a claim under an insurance policy for loss due to theft by an employee and is seeking complete reimbursement for the loss.
  7. The District Manager, along with the auditors and the newly hired Finance Director, have restructured the District's Internal Controls and have provided the District's Board of Trustees reports on new internal controls implemented. (attached document)

The District is shocked at being the victim of employees who have brazenly betrayed the public trust.

Robert B. Gay
District Manager
San Mateo County MVCD
1351 Rollins Road
Burlingame, CA 94010
650 344-8592
650 918-8640 cell

Received on Thu Dec 08 2011 - 13:25:59 PST

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