A California Department of General Services custodian did almost no work for four years but collected $185,000 in pay and benefits through a fraudulent scheme with his supervisor, according to a California State Auditor investigative report published Thursday. The custodian and his boss, neither of whom are identified in the report, coordinated from 2016 through 2020 to collect the custodian’s unearned paycheck and then to split the money, according to the report. The pair “very likely engaged in a criminal conspiracy” and “also appear to have violated sections of the Penal Code that prohibit the embezzlement and misappropriation of public funds and the falsification of accounts by a public employee,” the report states.
The auditor’s office contacted the Department of General Services in December 2020 after receiving allegations of fraud, according to the report. The department discovered supporting evidence and sent it to the Department of Justice in January 2021, but the DOJ closed the investigations “without providing an explanation for its decision,” the report said. DOJ, in a statement late Thursday afternoon, disputed auditor’s account.
“While the California Department of Justice does not typically announce our investigations to the public, it is inaccurate to say that the investigation of this case was closed,” the department said. We appreciate the state auditor’s work here and their office’s effort to add to our existing investigation.” The auditor’s office pursued its own investigation, eventually securing admissions from both the custodian and supervisor, according to the report. The report indicates the custodian and the supervisor resigned. The Department of General Services didn’t immediately respond to questions. The investigative report summarized the department’s response, saying it would contact law enforcement and pursue disciplinary action against the supervisor.
“DGS added that the alleged behavior is a violation of its values and it will review its policies and procedures to prevent these activities from recurring,” the report states. The supervisor hired the custodian, whom he had worked with previously at a state agency, in November 2016. The custodian stopped coming into work about a month later, when the two initiated the scheme, according to the report. The supervisor filed false time sheets on behalf of the custodian for nearly four years, for a total of $142,000 in monthly pay and $43,000 in benefits, according to the report. The supervisor delivered the custodian a paycheck every month around payday for the duration of the scheme, and the custodian gave his boss cash payments in exchange, the report said.
The two men provided different accounts of how much money they each took home from the checks, according to the report. The custodian admitted that the only work he did in the four-year period was delivering some documents “two or three times” to the Department of General Services’ Sacramento headquarters. A former building manager who oversaw the supervisor failed to provide “even minimal oversight” of the roughly 20 employees he oversaw, according to the report. “Had the building manager exerted even minimal effort in executing his duties as a supervisor to ensure accurate time and attendance records, he would have noticed that the custodian was absent,” the report states. Even after receiving multiple complaints about the supervisor, the building manager took no action, enabling the supervisor to carry out up to about $99,000 in additional abuses in coordination with another employee, who was an office technician, according to the report. The scheme came to light when the Department of General Services hired a new manager in December 2020. The manager found documentation saying the custodian had retired in August 2020, but when he started asking around, no one in the office knew the individual, according to the report.