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http://www.azcentral.com/news/articles/2012/09/06/20120906phoenix-exec-accused-kickbacks.html
by Emily Gersema - Sept. 29, 2012 09:01 PM
The Republic | azcentral.com
A retired Phoenix worker faces trial this fall on charges that he funneled more than $322,000 in city checks to a truck-washing company as part of a six-year fraud scheme, public records show.
Investigators believe former public-works assistant director Ronald Cross received kickbacks, including a down payment for a house, from officials with Clark's Maintenance as part of the scheme.
The city has continued to investigate Clark's Maintenance after an internal audit released in August revealed other departments had authorized a combined $4.7 million in payments to the company during the past eight years. The city has since severed all business with Clark's Maintenance.
The length of the fraud scheme, combined with Cross' spotty performance record, raised concerns among some City Council members.
Councilman Bill Gates said he believes the city "should have caught the fraud earlier" than it did.
"We need to put certain practices in place so that something like this cannot go on," he said.
The investigation
In 2010, Phoenix detectives and auditors began simultaneous investigations into a series of unusual invoices that Cross paid to Clark's Maintenance LLC -- also doing business as JC's Phoenix Truck Wash -- in Phoenix.
Police in May arrested Cross, who retired in June 2010, in connection with the case, court records show.
Cross, 64, of Phoenix, faces one count of felony fraudulent schemes and one count of theft for accusations he bilked the city out of an estimated $322,000 that prosecutors say benefited himself, as well as Clark's Maintenance owner Jessie Clark and manager Heather Swanson, Maricopa County Superior Court records show.
Clark, 52, and Swanson, 33, also from Phoenix, face similar charges.
Attorneys for Clark, Cross and Swanson didn't respond to messages seeking comment.
Investigators said the kickbacks included a $25,000 down payment on a house Swanson sold to Cross, according to police records.
Swanson transferred ownership of a house to Cross in March 2006, according to Maricopa County Recorder's Office documents.
Cross, Swanson and Clark have pleaded not guilty to the charges. A Superior Court judge has scheduled their trial for Nov. 26.
Cross also faces a drug-possession charge. Police in May arrested him after finding powder cocaine in his vehicle, according to police records.
City audit
City auditors found that in Public Works, Cross authorized more than 180 payments to Clark's Maintenance from June 2004 to May 2010.
Most of the invoices Cross authorized were for $2,000 or less, which police said enabled Cross to avoid drawing suspicion from other city officials. Under Phoenix's contract policies, the city must issue a call for bids and set up a contract for services that cost the city more than $2,000, police said.
The city's auditors and public-works officials said the suspicious payments to the firm likely would have gone unnoticed if it weren't for a public-works property manager who questioned a few pending invoices for the truck-washing company in June 2010, about two months after Cross retired.
"It's difficult to detect fraud when there's collusion" among a group, said city auditor Bill Greene. "One is covering the other's tracks."
Work history
Through a public-records request, The Republic obtained copies of Cross's personnel file, which showed he received spotty performance reviews since he was hired in 1988. Cross was reprimanded at least four times during his 22 years with the city, including infractions some treat as terminable offenses.
City records show Cross did not appeal the reprimands or warnings in any of these disciplinary incidents:
Nov. 5, 1998: Cross's then-supervisor wrote a letter of reprimand and placed Cross on 10 days of suspension after Cross had "received a body massage in a conference room at Public Works Metro Facilities division."
"Your failure to perceive the action as unprofessional or inappropriate is a concern on my part," the supervisor wrote.
In addition, the supervisor wrote that an internal investigation found Cross "accepted appeals of deductions from a custodial contractor and voided the deductions in direct conflict with the (city's) established contract appeals processes" in 1993.
In voiding those deductions, Cross cost the city $5,593, the supervisor wrote.
Feb. 3, 2003: Cross received a written reprimand from the head of public works for accusing a deputy director of being a "racist, sexist and a bigot."
June 16, 2004: Public-works officials issued a written reprimand for allegations that Cross had a loud and inappropriate argument with a co-worker over his cellphone ringing in the office.
Jan. 27, 2006: Public-works officials placed Cross on 10 days suspension after finding he was downloading e-mails with pornographic pictures and making copies of them. He had sent pornographic e-mails to several city employees and to people who don't work for the city, according to the files.
City policy states that an employee caught downloading and distributing porn faces an automatic 80-day suspension.
In a written statement to The Republic, city officials said Cross received written reprimands instead of the harsher punishment "because that level of discipline was determined to be the most appropriate disciplinary action at the time."
Council responds
Councilman Jim Waring said the council and city should take a close look at the city's audit practices and human-resources policies and consider revamping them to ensure problem employees are caught early on and disciplined appropriately.
"I'm trying to get assurances that there aren't more of these (situations) out there," Waring said.
When The Republic told Waring about Cross' computer pornography infraction, he was shocked.
"This was on a work computer? Why didn't we fire him?" Waring said. "This was not just a problem employee, but he was engaged in some alleged criminal activity."
Read more: http://www.azcentral.com/news/artic...nix-exec-accused-kickbacks.html#ixzz283TRg4oC
by Emily Gersema - Sept. 29, 2012 09:01 PM
The Republic | azcentral.com
A retired Phoenix worker faces trial this fall on charges that he funneled more than $322,000 in city checks to a truck-washing company as part of a six-year fraud scheme, public records show.
Investigators believe former public-works assistant director Ronald Cross received kickbacks, including a down payment for a house, from officials with Clark's Maintenance as part of the scheme.
The city has continued to investigate Clark's Maintenance after an internal audit released in August revealed other departments had authorized a combined $4.7 million in payments to the company during the past eight years. The city has since severed all business with Clark's Maintenance.
The length of the fraud scheme, combined with Cross' spotty performance record, raised concerns among some City Council members.
Councilman Bill Gates said he believes the city "should have caught the fraud earlier" than it did.
"We need to put certain practices in place so that something like this cannot go on," he said.
The investigation
In 2010, Phoenix detectives and auditors began simultaneous investigations into a series of unusual invoices that Cross paid to Clark's Maintenance LLC -- also doing business as JC's Phoenix Truck Wash -- in Phoenix.
Police in May arrested Cross, who retired in June 2010, in connection with the case, court records show.
Cross, 64, of Phoenix, faces one count of felony fraudulent schemes and one count of theft for accusations he bilked the city out of an estimated $322,000 that prosecutors say benefited himself, as well as Clark's Maintenance owner Jessie Clark and manager Heather Swanson, Maricopa County Superior Court records show.
Clark, 52, and Swanson, 33, also from Phoenix, face similar charges.
Attorneys for Clark, Cross and Swanson didn't respond to messages seeking comment.
Investigators said the kickbacks included a $25,000 down payment on a house Swanson sold to Cross, according to police records.
Swanson transferred ownership of a house to Cross in March 2006, according to Maricopa County Recorder's Office documents.
Cross, Swanson and Clark have pleaded not guilty to the charges. A Superior Court judge has scheduled their trial for Nov. 26.
Cross also faces a drug-possession charge. Police in May arrested him after finding powder cocaine in his vehicle, according to police records.
City audit
City auditors found that in Public Works, Cross authorized more than 180 payments to Clark's Maintenance from June 2004 to May 2010.
Most of the invoices Cross authorized were for $2,000 or less, which police said enabled Cross to avoid drawing suspicion from other city officials. Under Phoenix's contract policies, the city must issue a call for bids and set up a contract for services that cost the city more than $2,000, police said.
The city's auditors and public-works officials said the suspicious payments to the firm likely would have gone unnoticed if it weren't for a public-works property manager who questioned a few pending invoices for the truck-washing company in June 2010, about two months after Cross retired.
"It's difficult to detect fraud when there's collusion" among a group, said city auditor Bill Greene. "One is covering the other's tracks."
Work history
Through a public-records request, The Republic obtained copies of Cross's personnel file, which showed he received spotty performance reviews since he was hired in 1988. Cross was reprimanded at least four times during his 22 years with the city, including infractions some treat as terminable offenses.
City records show Cross did not appeal the reprimands or warnings in any of these disciplinary incidents:
Nov. 5, 1998: Cross's then-supervisor wrote a letter of reprimand and placed Cross on 10 days of suspension after Cross had "received a body massage in a conference room at Public Works Metro Facilities division."
"Your failure to perceive the action as unprofessional or inappropriate is a concern on my part," the supervisor wrote.
In addition, the supervisor wrote that an internal investigation found Cross "accepted appeals of deductions from a custodial contractor and voided the deductions in direct conflict with the (city's) established contract appeals processes" in 1993.
In voiding those deductions, Cross cost the city $5,593, the supervisor wrote.
Feb. 3, 2003: Cross received a written reprimand from the head of public works for accusing a deputy director of being a "racist, sexist and a bigot."
June 16, 2004: Public-works officials issued a written reprimand for allegations that Cross had a loud and inappropriate argument with a co-worker over his cellphone ringing in the office.
Jan. 27, 2006: Public-works officials placed Cross on 10 days suspension after finding he was downloading e-mails with pornographic pictures and making copies of them. He had sent pornographic e-mails to several city employees and to people who don't work for the city, according to the files.
City policy states that an employee caught downloading and distributing porn faces an automatic 80-day suspension.
In a written statement to The Republic, city officials said Cross received written reprimands instead of the harsher punishment "because that level of discipline was determined to be the most appropriate disciplinary action at the time."
Council responds
Councilman Jim Waring said the council and city should take a close look at the city's audit practices and human-resources policies and consider revamping them to ensure problem employees are caught early on and disciplined appropriately.
"I'm trying to get assurances that there aren't more of these (situations) out there," Waring said.
When The Republic told Waring about Cross' computer pornography infraction, he was shocked.
"This was on a work computer? Why didn't we fire him?" Waring said. "This was not just a problem employee, but he was engaged in some alleged criminal activity."
Read more: http://www.azcentral.com/news/artic...nix-exec-accused-kickbacks.html#ixzz283TRg4oC