Placentia Auditors: "Significant Deficiencies" in Finances Long Before Embezzlement
Placentia's iconic water tower
Photo by Nathan England
Yesterday, Placentia councilmember Chad Wanke—a former city treasurer in the corruption-happy North OC town whose bio makes him out to be a fiduciary wizard—had one hell of a don't-blame-me fit over the All-American City's latest scandal: more than $4 million allegedly embezzled by financial manager Michael Nguyen.
In the morning, he told the Voice of OC that no one should attack him or his allies on the council for the mess, claiming critics are using the fiasco for their "political ends," reporter Adam Elmahrek wrote. "Wenke [sic] pointed out that Bank of America (where the city keeps its accounts), two outside audits and city staff all missed the embezzlement."
In the evening, during a packed City Council meeting, Wanke continued his charade. Barely containing his anger after being asked to resign (along with fellow former city treasurer-turned-councilmember Craig Green) by multiple residents, Wanke seethed to residents that they should "do your own research" and that "there's been a lot of misinformation." Green, for his part, said there is "ignorance of the actual facts" while rambling on and on about...technology?!
Wanke and pals are painting out Nguyen (whom the Los Angeles Times says Wanke "worked closely with") to be a master schemer that duped everyone, especially the Wankers, and that no city official can be blamed—and certainly not the supposed financial whizzes on the council.
TicketsSat., Jan. 28, 6:30pm
PBR: Professional Bull Riders Built Ford Tough Series.
TicketsFri., Feb. 3, 7:45pm
Premium Level Seating: PBR: Built Ford Tough Series
TicketsFri., Feb. 3, 7:45pm
Premuim Level Seating: WWE Smackdown Live
TicketsTue., Feb. 14, 4:45pm
Only problem? That's not true.
Last Friday, LSL, CPAs, an accounting firm that just completed a financial audit for the Placentia for the period dating from July 1, 2014 to June 30, 2015, put out a press release essentially saying city officials should've suspected something was terribly amiss long before Nguyen was arrested:
Our audit for the period ending June 30, 2015 did identify several material weaknesses and significant deficiencies in internal controls and instances of noncompliance. It was not a "clean" audit. We feel it is important to communicate that our audit evaluated internal controls over wire transfers and we noted that the controls in place during the period of the financial audit, required the approval of two separate City employees to complete a wire transfer. We are not currently privileged with information regarding the investigation so it is unclear whether the breakdown occurred internally at City Hall or externally with the financial institution.
What's key about this statement is that prosecutors claim Nguyen began his embezzlement in April 2015. That means things were already going wrong way before Nguyen's alleged crimes—and, yep, Chad: it's more than fair to put extra blame on you and Green for not being more vigilant, given the two of ustedes were once the city's elected officials on all matters financial.
Sources tell the Weekly that city officials knew of the audit's preliminary warning signs as early as February of this year. And at last night's city council meeting, an LSL auditor repeated the meat of their press release. So on that note, we leave it to LSL to have the final word: "Local governments must be vigilant in their oversight and monitoring of controls to mitigate the risk of fraud. Internal controls can be circumvented if not monitored on a continual basis."
What's the frequency, Chad?
Get the ICYMI: Today's Top Stories Newsletter Our daily newsletter delivers quick clicks to keep you in the know
Catch up on the day's news and stay informed with our daily digest of the most popular news, music, food and arts stories in Orange County, delivered to your inbox Monday through Friday.