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L.A. County audit reports 101 cases of fraud by county workers and contractors [Updated]

May 26, 2010 |  6:21 pm

Auditorseal Los Angeles County auditors substantiated 101 instances of fraud during the last six months of 2009, uncovering cases large and small in which  taxpayers were cheated, according to a report released Wednesday.

Among the report’s findings:

* A Department of Public Social Services employee, Trang Dinh, inappropriately obtained the personal and confidential information of 82 welfare participants and used the information to file fraudulent income tax returns and obtain refunds totaling at least $100,000. Dinh was discharged and the Internal Revenue Service may file criminal charges, according to investigators.

* A janitorial services contractor, Grace Building Maintenance Co., was paid hundreds of thousands of dollars for services it did not provide. The contracts with the Beaches and Harbors and Public Library departments were canceled, and owner Beong Jeong was convicted of a felony and ordered to surrender all rights to his personal residence and pay restitution of $842,000.

[Corrected at 6:05 p.m. Thursday: An earlier version of this post incorrectly reported that a county audit had identified Los Angeles County Fire Department Chief Helen Jo as having received a written reprimand for mishandling a personnel case. She was not the person reprimanded. The audit, which was released Wednesday, did not name Jo. It stated that a "fire manager" had received a reprimand.]

* A Fire Department manager mishandled the hiring of a new employee, Ed’ward Rhone, resulting in additional salary and employee benefit costs to the county. Also, Rhone’s then-future mother-in-law, Sharon Harper, gave Rhone preferential treatment, which resulted in his being appointed to a higher-level position with higher pay. Rhone has subsequently been transferred to a more demanding job in order to justify the salary. The Fire Department manager received a letter of reprimand, and Harper, who had been the second-highest ranking county executive, was demoted and later retired.

* Three senior Fire Department managers played golf during county work hours but claimed a full day on their time cards. One of the employees also recorded overtime for that day. The other two employees, who are exempt from the Fair Labor Standards Act, were not disciplined because at the time Fire Department rules allowed exempt employees to report they had worked full shifts if they worked at least one hour. Fire management has since changed time reporting procedures to ensure that exempt employees properly account for hours worked.

Fire Chief Michael Freeman disputed the auditor’s findings, saying in an interview: “There was no disciplinary action on any managers because there was no wrongdoing.” After speaking with Freeman, the auditor-controller’s office said it had incorrectly reported that one of the managers received a letter of reprimand.

-- Garrett Therolf