BEAUMONT, CA- More than a year after the FBI and Riverside County District Attorney’s office raided several locations connected to the city of Beaumont, officials tell Patch that arrests have been made and charges are being filed.
Additional details about who was arrested and what charges they are facing will not be released until a press conference at 3 p.m. Patch will go to that conference and bring you the details as they are made public.
However, the Desert Sun is reporting that seven officials connected to the city are now facing embezzlement charges.
The newspaper says those charged include: former City Manager Alan Kapanicas, former Police Chief Frank Coe, former Public Works Director Deepak Moorjani, former City Attorney Joseph Aklufi, former Economic Development Director David William Dillon, former Finance Director William Aylward and former City Planner Ernest Egger.
Banning-Beaumont Patch has also discovered that at least four of those men are now jailed. According to online booking records, we’ve discovered:
- Alan Charles Kapanicas was arrested at 9:10 a.m. on Sunrise Mountain View in Palm Desert. He was booked into the Indio jail at 11:47 a.m.
- William Kevin Aylward was booked into the Banning jail Tuesday at 11:24 a.m.
- Joseph Sandy Aklufi was booked into the Riverside jail at 12:28 p.m.
- Deepak Moorjani was booked into the Riverside jail at 12:21 p.m.
“Our city deserves closure at this point, and this is one step closer,” Beaumont City Councilman Mark Orozco told Patch by telephone Tuesday afternoon following the DA’s announcement.
The investigation dates back to April 22, 2015, when authorities from both the FBI and District Attorney’s office filed into town to search city hall and Urban Logic Consultants. They also searched the house of former city manager Alan Kapanicas in Palm Desert.
Then, three weeks later, the state Controller’s Office announced it was conducting an investigation into the city’s financial and reporting practices. They ultimately released a report stating they’d found “… widespread deficiencies that rendered [the City of Beaumont’s accounting controls] effectively non-existent, with 75 of 79 internal control elements determined to be inadequate.”
Since that time, it’s been a slow process with officials declining to comment on the investigation. Then, just last month, the U.S. Securities and Exchange Commission served subpoenas on the city.
This is a breaking news story. Refresh for the latest.
Seven former Beaumont city officials have been charged with public corruption, Riverside County Superior Court records show.
Riverside County District Attorney Mike Hestrin has called a news conference for 3 p.m. Tuesday, May 17, to announce the charges.
Those charged are former City Manager Alan Kapanicas, former Police Chief Francis Dennis “Frank” Coe Jr., former Economic Development Director David William Dillon, former Public Works Director Deepak Moorjani, former Planning Director Ernest Alois Egger, former Finance Director William Kevin Aylward and former City Attorney Joseph Sandy Aklufi.
All except Egger and Coe have been booked into jail, according to county jail records.
Kapanicas has been charged with 33 felonies: embezzlement by a public official, misappropriation of funds and conspiracy. The date of the violations was listed as Nov. 16, 2012. An arrest warrant was issued May 17.
Coe was charged with four felonies: three counts of misappropriation of funds and conspiracy.
Dillon was charged with seven felonies, including six counts of embezzlement by a public official.
Moorjani� was charged with seven felonies, including six counts of embezzlement by a public official.
Aklufi was charged with six felony counts of embezzlement by a public official.
Beaumont interim City Manager Elizabeth Gibbs said she has no comment on the indictments and that a news release is forthcoming.
The charges come a year after anti-corruption investigators with the DA’s Office and FBI agents served search warrants at City Hall, Kapanicas’ Palm Desert home and the Beaumont offices of Urban Logic, the consulting firm that for years provided the city with its public works, planning and economic development directors.
Urban Logic and a company created by Kapanicas, General Government Management Services, was paid for years with bonds funds for their respective engineering and financial services for the city.
Kapanicas and Aylward left City Hall shortly after last year’s raids.
In November, the state Controller’s Office found that the city’s accounting controls were “effectively nonexistent,” making it impossible to know whether hundreds of millions of dollars had been spent for their intended purposes.
Staff Writer Craig Shultz contributed to this report.
This story is developing. Check back for updates.
Embezzlement charges have been filed against the former Beaumont city manager and police chief and at least three other city officials, at least some of whom have been accused of pocketing city money, as part of a far-reaching public corruption investigation.
Former City Manager Alan Kapanicas, former Police Chief Frank Coe, former Public Works Director Deepak Moorjani, former City Attorney Joseph Aklufi, former Economic Development Director David William Dillon, former Finance Director William Aylward and former City Planner Ernest Egger have been charged with numerous felonies, according to documents unsealed today. Kapanicas is a Palm Desert resident.
Kapanicas and Aylward face the heaviest allegations — 33 felony charges each, including embezzlement by a public official and criminal conspiracy.
None of the arrested officials were immediately available for comment or have defense attorneys listed in the court system. Messages left with the Beaumont mayor and current city council members were not immediately returned.
District Attorney Mike Hestrin will hold a press conference about the arrests at 3 p.m.
These charges are the culmination of FBI raids conducted in the Coachella Valley and the Inland Empire more than a year ago.
Last April, an FBI-led public corruption task force confiscated hundreds of boxes of documents, computers and other items from the Beaumont City Hall. Agents also went to Urban Logic Consultants, which had worked with Beaumont for two decades, and to Kapanicas’ home in Palm Desert.
At the time, law enforcement wouldn’t say what the raids were about, but clues began to surface soon.
Three weeks after the raid, the State Controller Betty Yee announced she was launching an investigation into “significant discrepancies” in the financial reports at Beaumont City Hall. Six months later, in November, Yee’s audit said Beaumont’s internal accounting controls were “non-existent” and that three officials – Kapanicas, Moorjani and Aylward – had “complete control” over the city’s bond money.
Worse still, all three of these officials were using this control to make money off the city.
Kapanicas and Moorjani both held second jobs as the executives of consulting firms, General Government Management Services and Urban Logic Consultants, respectively. Both men had used their city positions to approve payments from the bond money to their own companies, the audit said.
Aylward’s money-making scheme was even less complex. As finance director, he was responsible for the accounting of city bonds, from which he just paid himself directly, billing the city for working with the bond money. Essentially, Aylward paid himself more money for doing the job he already had.
None of this should have gotten past the City Council, the audit said, but somehow it did.
“It is difficult to understand why the City Council would ever approve or condone having the city’s executive management team’s personal business enter into such agreements with the city,” the audit stated. “Basically, the city management and the City Council failed to exercise its fiduciary responsibilities in protecting taxpayer dollars.”
The Beaumont arrests provide some perspective on a similar raid conducted at Palm Springs City Hall last September, showing that investigations of public corruption can take a long time before any arrests take place, if ever.
Both raids were done by the Inland Regional Corruption Task Force, which is led by the FBI but includes the IRS, the U.S. Attorney’s Office and district attorneys in both Riverside and San Bernardino counties. The Palm Springs probe continues today, as investigator study the relationship between former Mayor Steve Pougnet and developer Rich Meaney, who paid Pougnet more than $200,000 for undisclosed consultant work.
Reporter Brett Kelman can be reached at 760 778 4642 or firstname.lastname@example.org. Follow him on Twitter at TDSbrettkelman.
SEVEN OFFICIALS CHARGED
- Kapanicas – 33 felony charges, including embezzlement by a public official, misappropriation of funds, and conspiracy
- Aklufi – Four felony charges, including misappropriation of funds and conspiracy
- Aylward – 33 felony charges, including embezzlement by a public official, misappropriation of funds, and conspiracy
- Coe – Four felony charges, including misappropriation of funds and conspiracy
- Dillon – Seven felony charges, mostly embezzlement by a public official
- Egger – Seven felony charges, mostly embezzlement by a public official
- Moorjani – Seven felony charges, mostly embezzlement by a public official
Source: Riverside County court records