Court documents filed in the Beaumont corruption case outline how investigators believe some of the seven defendants set up a system that kept their deals and millions of dollars in alleged illicit money diversions out of the public eye.
The documents, called a declaration in support of arrest, were filed for each former city official, detailing the alleged scheme in which they are charged in 94 counts with misappropriating nearly $43 million from Beaumont over two decades.
Filed by Riverside County District Attorney’s Office senior investigator Michael Gavin, the paperwork shows how prosecutors believe Beaumont in the early 1990s “due to failing infrastructure and anticipated growth decided to bring on a number of consultants to run the city.”
Consultants arrive: City officials brought in Urban Logic Consultants along with owners and principals, Ernest Egger, David Dillon, and Deepak Moorjani, “to manage the planning, engineering and economic development aspects of the City,” according to the declaration.
Alan Kapanicas was “hired by the City around the same time as ULC through his company General Government Management Services (GGMS) to perform the role of City Manager,” the document filed in Kapanicas’ case said.
What consultants did: Urban Logic “designed and implemented the city’s Community Facilities District, described as “a revenue generating mechanism that allows money to be raised from selling bonds, to be repaid by a tax on the individual homeowners.”
Large district: Instead of covering a small area like most such districts, Beaumont’s “encompasses nearly the entire city and has an approval for $655 million of bonded indebtedness to build out the entirety of Beaumont,” the declaration states.
No oversight: Defendants worked out a way to keep the City Council from overseeing payments coming out of the bond accounts, the declaration states.
Payments OK’d: An invoice for payment “would be signed by Dillon, Egger, Moorjani, Kapanicas or William Aylward (Finance Director) as department heads, the documents state. Urban Logic was wired money directly from the bond proceeds.
“In this way, ULC principals signed off on payments to their own company,” Gavin wrote.
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