Though allegations that a local nonprofit skimmed money from its employees’ retirement funds surfaced more than a year ago, the Office of the District Attorney has not decided whether to file criminal charges
– a decision they expected to reach by June at the latest.
Though allegations that a local nonprofit skimmed money from its employees’ retirement funds surfaced more than a year ago, the Office of the District Attorney has not decided whether to file criminal charges – a decision they expected to reach by June at the latest. The investigation is still “in progress,” according to an office spokesman.
Last August, a $22,000 audit conducted by the state’s Fiscal Crisis & Management Assistance Team “found evidence of apparent illegal fiscal practices and misappropriation of funds” by the Mexican American Community Service Agency. Santa Clara County Office of Education Superintendent Charles Weis forwarded those findings along to the Office of the District Attorney for further investigation.
“It’s still an open investigation,” said Nick Muyo, one of the DA’s public information officers, during a phone interview.
Though he would not discuss the specific details surrounding the investigation of MACSA, Muyo explained that, in a general sense, some cases take longer than anticipated once investigators begin to “peel back the layers.”
“I’m not going to address anything specific to MACSA,” Muyo said, “but as you go into these things thinking you’ll have it done in a month, maybe six months – as you uncover things and glean more information, sometimes you realize there’s more that that needs to be done.”
The nonprofit agency – which ran Gilroy’s only charter school and another charter school in San Jose – failed to make about $400,000 in payments to its charter school employees’ retirement accounts over the course of several years and instead used those funds to pay for operational costs, according to last August’s audit.
Both charter schools were closed in the summer of 2009. MACSA relinquished its charter for El Portal Leadership Academy in Gilroy. Soon after, the East Side Union High School District revoked MACSA’s charter for Academia Calmecac, the charter school the organization ran in San Jose, said Jerry Kurr, associate superintendent of business services and administration for that district.
Because the audit is not admissible evidence in court, further investigation was necessary, according to a statement provided by the Office of the District Attorney earlier this year. And because the investigation is still ongoing, the DA’s Office cannot discuss the details, Muyo said.
“Our policy with any case is to ensure that a thorough and complete investigation is done,” he wrote in an e-mail. “After we determine the facts and whether there is a law violation, we assess whether the case can be proven beyond a reasonable doubt. Only after these criteria are satisfied can we file charges.”
In any investigation of a large business entity, it is not unusual that prosecutors may identify business records issues and complexities that were not initially identified or anticipated, Muyo wrote. Reconstructing a business’s accounting activity could take more time if that business did not keep orderly records or maintain internal controls, he wrote.
“A lack of internal controls may also indicate that summary journals or ledgers may not be relied upon and further and more extensive review of source documents is required,” he wrote.
Additionally, sometimes important witnesses, such as original accounting or bookkeeping staff, are no longer available to help collect, identify and interpret documents, Muyo said. This holds true in MACSA’s case – former Chief Executive Officer Olivia Soza-Mendiola resigned June 30, 2009, and former Chief Financial Officer Ben Tan is also no longer employed by MACSA. Both oversaw MACSA during the skimming.
At this point, the DA’s Office would not say when they hoped to reach a decision. According to Bud Frank, the deputy district attorney assigned to the case, there is generally a three year statute of limitations for felonies in California, though some exceptions are written into the law.
Incoming District Attorney Jeff Rosen, who will replace current DA Dolores Carr Jan. 3, said that though he was aware of the investigation, he was not familiar with the details. Rosen said that government integrity is one of his top priorities.
“Since we’re the only ones other than the Feds that can prosecute political corruption, it’s very important that we do that,” he said.
