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A former Fullerton city risk manager and ex-Los Angeles city management analyst were scheduled to be arraigned today in Santa Ana as part of an elaborate alleged scheme that involved officially signing off on fraudulent personal injury and property damage claims and using illegally recovered taxpayer funds for personal use.
The boyfriend of one suspect also faces charges.
Darryl Raymond Phillips, 45, of Fullerton, is charged with three felony counts each of misappropriation of public funds by a public officer, grand theft-embezzlement, presenting a false claim and one felony count of forgery.
As the Orange County District Attorney's Office statement below shows, Phillips, who is out on $50,000 bail, could get up to eight years and eight months in state prison if convicted.
November 4, 2010
FORMER FULLERTON RISK MANAGER TO BE ARRAIGNED FOR EMBEZZELING OVER $35,000 FROM THE CITY BY ISSUING FRAUDULENT GOVERNMENT CLAIM CHECKS
*A former Los Angeles City Management Analyst and her boyfriend are also charged in this case
SANTA ANA - A former Fullerton City Risk Manager will be arraigned today for stealing over $35,000 of public funds by knowingly signing-off on fraudulent personal injury and property damage claims for personal use. Darryl Raymond Phillips, 45, Fullerton, is charged with three felony counts each of misappropriation of public funds by a public officer, grand theft- embezzlement, presenting a false claim, and one felony count of forgery. If convicted, he faces a maximum sentence of eight years and eight months in state prison. Phillips is out of custody on $50,000 bail. The People will be requesting the defendant's bail be increased to $100,000 at his arraignment Dec. 23, 2010, at 8:30 a.m. in Department C-55, Central Justice Center, Santa.
Co-defendant Tracey Renee Williams, 35, Torrance, a former Los Angeles City Management Analyst, is charged with three felony counts each of misappropriation of public funds by a public officer, grand theft, presenting a false claim, and two felony counts of second degree commercial burglary. She faces a maximum sentence of 10 years in state prison if convicted on all charges. The People will be requesting she be held on $100,000 bail.
Co-defendant Darnell A. Mackey, 25, Inglewood, Williams' boyfriend, is charged with one felony count each of grand theft and second degree commercial burglary. If convicted, he faces a maximum sentence of three years and four months in state prison. The People will be requesting Mackey be held on $50,000 bail.
Williams and Mackey must prove their bail money is from a legal and legitimate source before posting bond. They are scheduled to be arraigned tomorrow, Nov. 5, 2010, in Department CJ-1, Central Jail, Santa Ana. The time is to be determined.
From April 2008 to August 2010, Phillips was employed as the Risk Manager for the City of Fullerton and was responsible to review and deny or admit fault for claims made against the City. He is accused of assigning himself the additional responsibility of authoring the monthly report of City liability claims activity, which is prepared for the City Manager and other department heads to monitor claims.
On April 12, 2010, Phillips is accused of e-mailing a City property damage release form to his cousin, Williams, who was on medical disability from the City of Los Angeles. That same day, Williams is accused of fraudulently claiming $7,750 in property damage by lying that she had been a victim of a car accident in Fullerton on June 18, 2009, caused by a City employee. Williams is not named in any police records or reports from the June 18, 2009, accident.
Phillips is accused of approving the fraudulent claim payment of $7,750 and issuing a check from the City's claim funds to Williams. Williams is accused of depositing the check into her personal bank account. Once the check cleared, Williams is accused of transferring a majority of the stolen funds back to Phillips by writing two checks to him in the amounts of $5,000 and $2,000, which he is accused of depositing into his personal bank accounts.
On May 25, 2010, Phillips is accused of e-mailing and instructing Williams to fill-out and sign a Fullerton-issued release of claims form. Williams is accused of fraudulently filling out the form claiming $17,000 in injury-related damages as a result of the crash, which she was never involved in. Two days later, Phillips is accused of receiving Williams' claim and knowingly approving the fraudulent claim and issuing her a $17,000 check, which Williams deposited into her personal bank account. On two separate occasions, Williams withdrew $13,000 of city funds from her bank account.
On Aug. 10, 2010, Phillips is accused of asking a co-worker to add Williams' boyfriend, Mackey, as a loss payee for a claim against the City. On Aug. 17, 2010, Phillips is accused of e-mailing Williams a property damage release form and instructing her to fill it out and return it as soon as possible. Williams is accused of fraudulently filling out the form claiming Mackey was the victim of a Jan. 5, 2010, car accident caused by a Fullerton police officer. Mackey is not documented in any police records or reports from the Jan. 5, 2010, crash. Mackey is accused of fraudulently claiming $10,550 in property damages. Days later, Phillips is accused of approving the claim and issuing a Fullerton check to Mackey for the amount requested. Mackey is accused of depositing the check and withdrawing over $1,900 of the stolen cash and giving it to Phillips by way of Williams.
Phillips is accused of being unable to produce Williams' and Mackey's physical claim file when asked by co-workers. Phillips resigned following an internal audit that was conducted revealing the fraudulent payments made to Williams and Mackey were reported to police. Phillips resigned Aug. 31, 2010, when the fraud was discovered. Upon further investigation, Mackey, Williams, and Phillips were linked to the theft and warrants were issued for their arrests yesterday, Nov. 3, 2010. The three defendants were arrested today by the Fullerton Police Department.
Deputy District Attorney Israel Claustro of the Special Prosecutions Unit is prosecuting this case.