{"id":3439,"date":"2012-02-28T09:06:58","date_gmt":"2012-02-28T17:06:58","guid":{"rendered":"http:\/\/www.fogcityjournal.com\/wordpress\/?p=3439"},"modified":"2022-12-22T07:27:39","modified_gmt":"2022-12-22T15:27:39","slug":"corporation-pleads-guilty-in-procurement-scam-to-defraud-city","status":"publish","type":"post","link":"https:\/\/www.fogcityjournal.com\/wordpress\/3439\/corporation-pleads-guilty-in-procurement-scam-to-defraud-city\/","title":{"rendered":"Corporation Pleads Guilty in Procurement Scam to Defraud City"},"content":{"rendered":"
\"\"

District Attorney George Gasc\u00f3n announced Monday that city-approved vendor Cole Hardware has accepted responsibility for its part in a procurement scam with the City and County of San Francisco. Photos by Luke Thomas.<\/p><\/div>\n

By Luke Thomas<\/a><\/strong><\/p>\n

Editor’s Note: This article has been updated with a public statement released by Cole Hardware.<\/em><\/p>\n

February 28, 2012<\/p>\n

An approved city vendor pled guilty to two felony charges February 24 for its part in a procurement scam to defraud the San Francisco Public Utilities Commission, District Attorney George Gasc\u00f3n announced Monday.<\/p>\n

\u201cOur city will not tolerate city vendors who steal taxpayers\u2019 money,\u201d Gasc\u00f3n said during a press conference at the Hall of Justice. \u201cWe are pleased Cole Hardware has accepted responsibility for its role in this multi-level scheme to defraud the SFPUC.\u201d<\/p>\n

According to court documents, Cole Hardware is one of two city vendors and one of ten co-defendants to have engaged in a conspiracy to bilk the city out of at least $100,000 between 2003 and 2007.\u00a0 It is alleged that Donnie Alan Thomas, a former SFPUC supervisor who pled guilty last year for his role in the scam, worked in conjunction with Cole Hardware employee Elizabeth Bradford and knowingly submitted fraudulent invoices to the SFPUC with false descriptions of items purchased. The false descriptions allowed Thomas to conceal that he was purchasing items for his personal benefit. Bradford has not pled in the case and awaits a preliminary hearing.<\/p>\n

Cole Hardware released a statement explaining its role in the case. “For more than 50 years, Cole Hardware has stood for integrity, excellence and good citizenship in San Francisco. Unfortunately, a few years ago two trusted 20+ year employees submitted misleading invoices to the City, thereby facilitating a fraud by some of the City\u2019s SFPUC workers. At the time, Cole Hardware\u2019s ownership was not aware of this misconduct. When we learned the details we terminated both employees, fully cooperated with the District Attorney\u2019s investigation, adopted new internal policies to prevent future misconduct and offered to reimburse the City for any losses attributable to our employees. Sadly, after more than two years of huge expenses fighting the charges in court, Cole Hardware has reluctantly accepted a plea bargain. This is purely an economic decision. Cole remains committed to our mission of serving those living and working in San Francisco.”<\/p>\n

The other city vendor to have pled guilty to fraud is Centennial Distributors, Inc.<\/p>\n

Items that are alleged to have been obtained fraudulently through Cole Hardware include decorative landscaping rock, redwood lumber, high performance automobile parts and meat for a party, said lead prosecutor Kelly Burke.<\/p>\n

Cole Hardware pled guilty to felony counts of grand theft and forged requests for payment. As part of its plea agreement, Cole Hardware will be required to pay restitution in the amount of $51,544.72 \u2013 the fraudulent monies tracked to Cole Hardware – and is required to pay $650 in fines and court fees. A sentencing hearing is scheduled for March 23 in Department 28.<\/p>\n

\u201cThe officers of [Cole Hardware] were not individually charged and so they have not accepted individual liability,\u201d Burke said. \u201cThis is about corporate liability for actions of an employee \u2013 but [Cole Hardware] is still criminally liable for actions that would have been taken on behalf of an employee.\u201d<\/p>\n

\"\"

Assistant District Attorney Kelly Burke.<\/p><\/div>\n

Then-City Controller Ed Harrington, who is now head of the SFPUC and who was recently called to the witness stand<\/a> to testify in an unrelated civil case involving a city employee who bilked the city out of at least $482,000<\/a> between 1999 and 2001, conceded the city\u2019s internal fraud-detection controls failed.<\/p>\n

\u201cWhen you have collusion, it\u2019s very difficult to catch,\u201d Harrington said. \u201cWe are changing all of our procedures within the public utilities commission to make sure this doesn\u2019t happen again.\u201d<\/p>\n

\"\"

Former City Controller Ed Harrington.<\/p><\/div>\n

As well as centralizing city purchasing, as many as 400 city employees will receive fraud-detection training, Harrington said.<\/p>\n

In addition to Thomas\u2019 plea, Jean Quiroz, John Rauch, Robert Mazareigos and Vincent Padilla, have also pled guilty in the case. Their employment with the city has been terminated. Two of the employees are retired and have had their pensions revoked.<\/p>\n

Two other co-defendants, Miles Bonner and Tri-Delta Electric, have not as yet pled in the case and are awaiting a preliminary hearing.<\/p>\n

Despite its guilty plea, Cole Hardware remains a city-approved vendor, \u201cbut I don\u2019t know what level of business is being done with them,\u201d Harrington said. \u201cAs far as I know [Cole Hardware has not been] debarred as a city vendor.\u201d<\/p>\n

\u201cToday we have sent a strong message that the City will not tolerate public servants or vendors who attempt to fleece our hard-working taxpayers,\u201d Harrington stated.<\/p>\n

Gasc\u00f3n \u201cpleased\u201d with evidence ruling in Sheriff Mirkarimi domestic violence case<\/strong><\/p>\n

Also during Monday\u2019s presser, Gasc\u00f3n was asked to comment on Judge Garret Wong\u2019s pretrial ruling that will allow prosecutors to present video evidence<\/a> against Sheriff Ross Mirkarimi in his upcoming criminal trial.<\/p>\n

Mirkarimi is charged with three criminal misdemeanors \u2013 domestic violence, dissuading a witness and child endangerment \u2013 stemming from an alleged domestic violence incident involving his wife Eliana Lopez on New Year\u2019s Eve.<\/p>\n

The video, recorded by Lopez\u2019 neighbor Ivory Madison on January 1 at Madison\u2019s urging and with Lopez\u2019 permission, contains a statement from Lopez<\/a> about the incident and shows a bruise on Lopez\u2019 inner right bicep. Mirkarimi\u2019s defense lawyer, Lidia Stiglich, had sought to render the video inadmissible<\/a> based on hearsay rules of evidence.<\/p>\n

\u201cWe believe it was the right ruling,\u201d Gasc\u00f3n said.<\/p>\n

On the question Judge Wong raised about the release of photos to the media from the video having the potential of \u201ctainting\u201d the jury pool, Gasc\u00f3n said, \u201cThat is always a concern when you have a public trial, especially when it involves well-known people within the community. I think it will obviously be the work of the court and the other parties involved to make sure that we do get a jury that would provide a fair assessment of the evidence – certainly that\u2019s the intention of my office and I am sure that will be the intention of the defense and I think we\u2019ll have the right jurists to make sure that occurs.\u201d<\/p>\n

Asked about accusations that the District Attorney\u2019s office is trying the case in the media, Gasc\u00f3n responded, \u201cThere were photos that were attached to the motion to argue against the motion by the defense to exclude the evidence here. It is important to be able to illustrate the importance of this evidence, and the pictures in this particular case speak very clearly to what the contents of the evidence are.\u201d<\/p>\n

\u201cIt was important for us to establish very clearly to the court the value and the substance of this case,\u201d Gasc\u00f3n added. \u201cWe have to make our argument in order to be able to establish that, in fact, this is important evidence.\u201d<\/p>\n

When asked if there have been any discussions about a possible plea agreement, Gasc\u00f3n said, \u201cCertainly we\u2019re always open for discussions. I think it would be beneficial to have those discussions, but we have not heard anything from the other side. Leading up to this point there has been a refusal to work with our office to cooperate so we have not been able to have those types of discussions.\u201d<\/p>\n

\"\"

San Francisco District Attorney George Gasc\u00f3n.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

According to court documents, Cole Hardware is one of two city vendors and one of ten co-defendants to have engaged in a conspiracy to bilk the city out of at least $100,000 between 2003 and 2007. It is alleged that Donnie Alan Thomas, a former SFPUC supervisor who pled guilty last year for his role in the scam, worked in conjunction with Cole Hardware employee Elizabeth Bradford \u2013 who has not pled in the case and awaits a preliminary hearing \u2013 knowingly submitted fraudulent invoices to the SFPUC with false descriptions of items purchased. The false descriptions allowed Thomas to conceal that he was purchasing items for personal benefit.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[222,17],"tags":[921,1117,1216],"class_list":["post-3439","post","type-post","status-publish","format-standard","hentry","category-news","category-politics","tag-ed-harrington","tag-george-gascon","tag-san-francisco-public-utilities-commission"],"yoast_head":"\nCorporation Pleads Guilty in Procurement Scam to Defraud City - Fog City Journal<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.fogcityjournal.com\/wordpress\/3439\/corporation-pleads-guilty-in-procurement-scam-to-defraud-city\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Corporation Pleads Guilty in Procurement Scam to Defraud City - Fog City Journal\" \/>\n<meta property=\"og:description\" content=\"According to court documents, Cole Hardware is one of two city vendors and one of ten co-defendants to have engaged in a conspiracy to bilk the city out of at least $100,000 between 2003 and 2007. 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It is alleged that Donnie Alan Thomas, a former SFPUC supervisor who pled guilty last year for his role in the scam, worked in conjunction with Cole Hardware employee Elizabeth Bradford \u2013 who has not pled in the case and awaits a preliminary hearing \u2013 knowingly submitted fraudulent invoices to the SFPUC with false descriptions of items purchased. 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