Former Beaumont Officials Guilty in Corruption Case – Admit Engaging in Fraud

Four former Beaumont officials accused of corruption pleaded guilty Tuesday, Dec. 19, to charges including embezzlement, misappropriation of public funds and conflict of interest, and agreed to pay a total of $8.1 million in restitution.

The money must be paid to the Western Riverside Council of Governments, which filed a lawsuit alleging that Beaumont officials diverted $43 million from a regional transportation program between 2003 and 2009.

In October, former Beaumont public works director Deepak Moorjani pleaded guilty to a felony conflict of interest charge and agreed to pay $3 million to WRCOG.

The money is to be paid “forthwith” from assets previously frozen by the District Attorney’s office, Riverside County District Attorney Mike Hestrin said in a statement.

Former Beaumont Planning Director Ernest Egger, ex-Economic Development Director David Dillon, former City Manager Alan Kapanicas and onetime Finance Director William Aylward agreed to the plea deals Tuesday morning in Riverside County Superior Court.

“You were given the trust of the people of Beaumont. You pledged to respect them. Instead, you are prosecuted here today. You are a cabal, a syndicate of dishonor,” Beaumont Mayor Pro Tem Nancy Carroll told the defendants during victim impact statements. “You are no longer the players you believed yourselves to be. You are the money-changers in the temple.

“You nearly brought the city of Beaumont to its knees. This was your house of cards,” she said.

Under the agreement with prosecutors, each of the defendants will spend about a year under electronically monitored house arrest, and serve three years formal probation.

Dillon, who pleaded guilty to one felony count of conflict of interest and one felony count of embezzlement, will pay $4 million in restitution. Egger, who pleaded guilty to one felony count of conflict of interest must pay $3 million.

Kapanicas, who pleaded guilty to felony counts of embezzlement and misappropriation of public funds, must reimburse WRCOG $1 million, and Aylward, who pleaded guilty to felony counts of embezzlement and misappropriation of public funds must pay $100,000.

All four are barred for life from holding public office in California. All other charges against them were dismissed as part of the plea bargain.

The pleas leave only one defendant in the criminal case: former Beaumont City Attorney Joseph Aklufi. He faces a preliminary hearing Feb. 22.

The $43 million was supposed to go to the joint power agency’s Transportation Uniform Mitigation Fee, which uses contributions from member cities for regional transportation projects to mitigate increased traffic from housing developments.

WRCOG contends the defendants used various ploys through a contracting company they had formed, Urban Logic Consultants, to block Beaumont’s payments to TUMF, bringing harm to neighboring cities in the area.

“It might look like one part of government took money from another part of government,” current WRCOG chairwoman and Banning Councilwoman Debbie Franklin said during the victim impact statement. The withheld money, she said, should have gone to build critical roadways in western Riverside County.

“That means our residents have had, and will have to endure, hours of needless congestion for years from now,” she said. The defendants “deliberately lied … in a blatant disregard for the impact their actions would have on the innocent residents of the Pass area.”

“It was a very complex conspiracy scheme,” prosecutor Amy Barajas of the district attorney’s Public Integrity Unit said. “In a very roundabout and secretive way, they were able to exploit their positions of trust and power in the city” to get money that should have gone WRCOG.

Instead, she explained, it was used on projects inside Beaumont the defendants could profit from, through contracts the city made with the defendants’ Urban Logic firm.

Dillon’s defense attorney Paul Grech said Tuesday that his client and the others in Urban Logic were caught between two choices made by the Beaumont City Council at the time: Use local bonds to fund projects inside Beaumont, and also join WRCOG for regional projects.

“They tried to have it both ways,” he said in a telephone interview. City staff, including Dillon, were “stuck between what the City Council of the time wanted to do, and what the city’s obligations were to WRCOG. … You can see how utterly blinding this would be to a jury, and how long and expensive it would be to litigate.”

Beaumont Mayor Lloyd White said that while the defendants must make restitution payments and would serve some time under electronic monitoring, it wasn’t enough.

“I think the citizens of Beaumont deserved more,” White said. “But I think the District Attorney gave us everything we could get, through due process.”