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Embezzlement Investigation

Contact
Jeannette Ortega


401 E. Chapman Avenue
Placentia, CA 92870

Phone: (714) 993-8264
Fax: (714) 961-0283

Hours
Monday - Thursday
7:30 am - 6:00 pm

Latest Update on the Embezzlement Investigation
The following information is provided by the City regarding the alleged misappropriation of public funds by Michael M. Nguyen, former Finance Services Manager for the City of Placentia. As of July 22, 2016 a majority of the stolen funds have now been returned to the City.

Overview of Criminal Proceedings
  • Between January 27, 2014 and April 12, 2016, Nguyen allegedly sent a number of unauthorized wire transfers totaling about $5.16 million to various private accounts bypassing internal and external financial controls.  Bank statements and general ledgers were manipulated utilizing software to conceal his actions.
  • On June 17, 2016 the Orange County District Attorney’s Office charged Nguyen with 106 counts for misappropriation of public funds, money laundering and other related counts.  The complaint seeks an “aggravated white collar crime enhancement” for the alleged actions. 
  • The pretrial hearing has been scheduled for September 23, 2016. Additional information will be forthcoming.

Recovery Efforts          
  • So far a total of $3.16 million has been returned to the City.
  • An additional $1 million crime insurance policy is being processed. 
  • After the additional crime insurance policy is processed, about $1 million will remain outstanding.
  • City continues to work with the District Attorney’s Office to identify additional funds for recovery.
  • City will use any and all available actions to recover the remaining stolen funds for the residents of Placentia.

City Actions upon Becoming Informed of the Issue
  • City immediately locked Nguyen out of all financial and electronic controls, and he was suspended.
  • City immediately contacted the District Attorney’s Office to conduct an independent investigation.
  • City collaborated with the DA in gathering evidence of misconduct.
  • City immediately implemented a recovery plan to identify misappropriated funds, and provided the information to the DA.
  • DA in cooperation with the Placentia Police Department arrested Nguyen within 24 hours. 
  • City’s internal financial controls were immediately strengthened to provide additional security. Many of these new controls exceed governmental standards.

Third-party Review and Investigations
  • Forensic Auditor: An independent forensic audit is currently being conducted through the City Attorney's Office by KPMG.
  • Personnel Investigation: An independent personnel investigation, utilizing an outside investigator, is underway.
  • All findings and recommendations from the investigations will be presented to the City Council at a public meeting.

Statement from Placentia City Administrator Damien R. Arrula - July 25, 2016
"Placentia is grateful for the District Attorney’s exhaustive work to recover and return the $3.16 million in stolen funds to the City and taxpayers of Placentia. The recovery of the majority of funds within such a short timeframe demonstrates the power of the partnership between our two agencies. We will continue to remain steadfast in recovering the remaining stolen funds for the residents of Placentia and bring justice to those responsible. An additional $1 million crime insurance policy is being processed. The City will use any and all available actions to recover any outstanding funds for the residents of Placentia.”

Additional Information
July 25, 2016 - City's Press Release on Significant Progress Made in the Recovery of Embezzled Funds
June 17, 2016 - District Attorney's Press Release
April 27, 2016 - City Administrator Letter RE CFO Position

Placentia
401 East Chapman Avenue
Placentia, CA 92870
(714) 993-8117