Tuesday, May 14, 2013

Seattle Recovers Embezzled Million

Just over a year after discovery that a Seattle city engineer had embezzled a little more than a million dollars from municipal sewer extension projects, the Seattle City Pete Holmes reports that taxpayers have recovered all but $30,000.00 of the stolen funds.  Seattle utility engineer Joseph Phan still faces criminal charges numbering 70 counts of first and second degree theft in connection with the diverted funds. Holmes' diligent and persistent civil court efforts to get back the stolen million have made city taxpayers almost entirely whole. "We shower we will come after you with everything we have to make taxpayers and ratepayers whole," Holmes said in announcing completion of the restitution effort.

Phan was responsible for estimating the costs of hooking up sewer and water lines to new construction for developers anew home owners, drafting the city construction agreements, and collecting payment for the work from those owing the city for the construction. Allegedly Phan opened a bank in his own name into which he deposited the checks from property owners payable to the City, then using the money in the account to buy rental properties and vehicles in his own name, and to make cash gifts to relatives and to his church. He was arrested in March, 2012.

Seattle seized $96,000 from Phan's city pension account, $20,000 from his life insurance, and $43,000 from a college savings account he set up. Phan's scheme was uncovered after he was fired for hacking into his own city utility account to post payments he never actually made. After Phan was terminates, a developer asked the city to transfer funds it had paid to Phan from one property development which never materialized to the account of a different project, and sent in a copy of the check in payment. Seattle could find no record of any deposit of the payment into City accounts, and the following investigation turned up the million dollar embezzlement.

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