Three of the seven defendants in the Beaumont corruption probe made their initial court appearances Thursday, May 19, but will not enter pleas to charges until at least their next court date, May 26.
Seven former top city officials are accused of misappropriating nearly $43 million from the city, with some allegations dating back two decades.
Bail had been set for six of the defendants at $5 million, but Riverside County Superior Court Judge Becky Dugan said she would reduce that amount to $1 million each.
Appearing in custody in court were former City Manager Alan Kapanicas, former Finance Director William Aylward and former City Attorney Joseph Aklufi.
Four other defendants – former Planning Director Ernest Egger, former Public Works Director Deepak Moorjani, former Economic Development Director David Dillon and former Police Chief Francis “Frank” Coe – face arraignment dates in July. They posted bail this week.
All but Egger were arrested Tuesday. Egger turned himself in on Wednesday.
Outside the Riverside Hall of Justice after the court hearing, Kapanicas’ attorney Gregory H. Kassel said he anticipated that bail for his client would be posted.
“What I would challenge the District Attorney to do is show me the money,” he said. “Where is the $43 million?”
The criminal charges allege that sum was diverted to benefit some defendants.
Kassel said his client lives in an 1,800-square-foot house and drives a subcompact car. He said if someone had that kind of money, he would expect “opulence,” maybe a Lamborghini and several houses.
According to court documents, the house in Palm Desert is worth $450,000.
Kapanicas, 63, of Palm Desert, and Aylward, 53, of Cherry Valley, are both charged with six counts of embezzlement, 24 counts of misappropriation of funds and two counts of conspiracy.
Dillon, 62, of Temecula, Moorjani, 69, of Yorba Linda, and Egger, 59, of Mendocino, are each charged with one count of conflict of interest and six counts of embezzlement. Aklufi is facing six counts of embezzlement.
Coe, 51, of Redlands, was charged with two counts of misappropriation of funds and one count of conspiracy, with his bail set at $100,000.
Two Beaumont government critics who complained for years about suspected malfeasance in city government attended the court hearing.
“It’s definitely a relief that hopefully they will be held accountable,” said Judy Bingham, a citizen activist who sought public records for the past 11 years mostly tied to her concerns centered about fast-track developments and the relationship between the city and consultant Urban Logic, which employed many of the administrators who were indicted.
“This was money taken from the taxpayers and Western Riverside Council” of Governments, said Libi Uremovi, a city critic. She reviewed city financial records and brought her concerns to the district attorney’s office as long as a decade ago.
She said there is much more to uncover.
In a press conference Tuesday, District Attorney Mike Hestrin said most of the defendants funneled city funds to their own private companies.
Nearly $37 million of the funds that were allegedly diverted came from Transportation Uniform Mitigation Fees, which the city was supposed to pool with other local governments through the Western Riverside Council of Governments for county transportation projects, Hestrin said.
The allegations against Coe, misappropriations of funds, are related to a $45,000 interest-free loan investigators allege he received, with none of the officials first seeking city council approval. The district attorney on Tuesday said there were another $69,000 in other interest-free loans made to members of the Beaumont Police Department.