By: Libi Uremovic| Original Article at Patch.com
The City of Beaumont has started to post their bond fund accounts online: http://www.ci.beaumont.ca.us/index.aspx?nid=925
The Bond Fund Accounts are the individual bank accounts established by the Bond Trustee. The title and amount deposited in each bond fund account is listed on the bond’s Sources and Uses page.
Beaumont Bond Trustee, Union Bank, did not establish the accounts as directed on the bonds. There are only 5 or 6 different accounts listed on each bond, but Beaumont bonds have not one, but two sets of account numbers for each bond. Beaumont bonds have at least 20 different fund accounts. The 2012 Series C bond has 50 different fund accounts established.
And why would Bond Fund Trustee Stephen Boughton set up multiple accounts? To hide money.
READING THE BOND FUND ACCOUNTS:
The bond fund accounts have a face page and 1-5 additional pages depending on the amount of transactions incurred for the month. The accounts start with the 1993 Sewer Bond and ends with the 2013 Series B Bond.
The right-hand column on the face page of each bond identifies the bond’s Statement Period, Account Number, and Account Name to identify the bond. The bottom left-hand column identify any transactions or balance in the account.
RESERVE FUND
Every Bond requires a 10% Reserve Fund. With $237,645,000 Million in Bonds disclosed there should be $23,764,500 in Reserves. The City of Beaumont Bonds contain a total of $16,897,779 or 7.11% in Reserve.
$132,403.77 DISAPPEARS FROM 2012 SERIES A BOND
The 2012 Series A Bond shows that two (2) Escrow Fund Accounts under # 6711978708 were established. The first Account is listed as ‘closed’ with no transactions. The second Account shows a $132,403.77 transfer to account # 6711978706, but the transaction is not recorded in the Construction Fund Account.
Page 617/871
Construction Fund Acct # 6711978706
No Entries Recorded
Page 619/871 Escrow Fund #1
Acct # 6711978708
ACCOUNT CLOSED
Page 622/871 Escrow Fund #2
Acct # 6711978708
$132,403.77 to Acct # 6711978706
Last year a review of the bond fund accounts showed $350,000 embezzled using the same procedure. Removing funds from one account but not depositing the funds into the designated account is ‘Insider Embezzlement 101’. Only a Union Bank Employee can do the transactions.
Whether the City is aware that Union Bank is embezzling money from the bond accounts is unknown. It could be that Beaumont City Manager Alan Kapanicas and Finance Director William Aylward are aware and approve of the embezzlement. It could also be that the Union Bank Employee knows that government elected and appointed officials are too lazy and incompetent in their jobs to notice the embezzlement.