Former Finance Services Manager Michael Minh Nguyen was sentenced earlier this month to 25 years in state prison for embezzling $5 million from the city of Placentia, but Orange County prosecutors are not done with the case.
Herbert Norris Trotter II is scheduled to be arraigned in Orange County Superior Court today for allegedly laundering much of the taxpayer funds that Nguyen stole.
Trotter, who runs The Talaton Group, a Beverly Hills company that claims to help clients raise money for projects, has been slapped with 14 felony counts of misappropriation of public funds and 14 felony counts of money laundering, with sentencing enhancement allegations for theft over $100,000, aggravated white collar crime over $500,000, property damage over $1.3 million, and money laundering exceeding $1 million.
The 45-year-old Santa Monica resident could get up to 37 years in prison if convicted, the Orange County District Attorney's office previously revealed.
When Nguyen was hired by Placentia on April 21, 2008, he was given access to city accounts and given responsibility for wire transfers and maintaining financial ledgers at a time the staff was turning over. Between Jan. 27, 2014, and April 12, 2016—the day Placentia officials discovered and reported the fraud—the 34-year-old Irvine resident made 36 illegal wire transfers from the city account to other accounts belonging to him and others.
The city had been tipped off by the Westgate Las Vegas Resort & Casino, where Henderson, Nevada, resident Michael Todd McDonald is claimed to have tried to persuade the business to accept a wire transfer from the city of Placentia, which he allegedly claimed was for a “film project.” A closer look at the city books found suspicious wire transfers, including some to Trotter and the Talaton Group LLC.
The total rip-off amount by Nguyen: $5.2 million. The FBI Cyber Task Force and Senior Deputy District Attorney Marc Labreche, the case's lead prosecutor from the Major Fraud Unit, recovered about $3 million for the city and an insurance company is expected to kick in another $1 million. Part of Nguyen's plea deal with the court has him paying Placentia $2,649,155.57 in restitution and more than $10 million in fines. He swore to Judge Gary S. Paer at sentencing that he will pony up to the city.
Trotter enters the picture because, between Aug. 5, 2014, and March 9, 2016, he is accused of conspiring with and aiding and abetting Nguyen in misappropriating $1,533,040 by engaging in a scheme to obtain business funding for the then-city official. Between May 15, 2015, and April 4, 2016, Trotter laundered $1,208,465 by transferring funds from The Talaton Group, where his wife also works, into his and his family members’ personal accounts for personal use, according to the OCDA.
Speaking with the Orange County Register last year, Trotter said Nguyen had come to The Talaton Group to get help raising money for nail salons his aunt wanted to open and a potential real estate deal in Las Vegas. Trotter at the time denied knowing of any wrongdoing by Nguyen.
The OCDA alleges that between Jan. 22 and March 16 of 2016, 40-year-old McDonald conspired with and aided and abetted Nguyen in misappropriating $2,347,000 by engaging in a Las Vegas gambling venture with the then-city financial chief. Between Jan. 22 and April 12, 2016, McDonald is accused of laundering $748,675 by transferring funds from his accounts for personal use, including gambling.
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He faces 46 felony counts of money laundering and 15 felony counts of misappropriation of public funds, with sentencing enhancement allegations for theft over $100,000, aggravated white collar crime over $500,000, property damage over $1.3 million, and money laundering exceeding $150,000 but less than $1 million. A conviction could McDonald to state prison for up to 58 years and eight months, the OCDA says.
At a previous hearing in the Nguyen case, City Administrator Damien R. Arrula read a victim impact statement on behalf of Placentia that stated, in part, "The tax dollars we receive are from our residents who take pride in our small community and work hard to pay their taxes. The average household income of our 53,000 residents is $65,000 per year. The expectation is these funds are going to pay for police officers and firefighters, to maintain parks and pave our local roads. I say all this to point out this is not a victimless crime.
“... Many of our operations and improvement projects have been put on hold or delayed because of his crimes. He depleted our reserves. He depleted our emergency funds. One key example is that we have not been able to purchase six new police department vehicles, which would aid in responding to emergencies for those in need. We have delayed much needed improvements to our senior center, police station and parks, including a children’s playground that has not been updated in 20 years.
“... Perhaps, what pains me the most is that you, Mr. Nguyen, grew up here and spent most of your professional career in this area. This was your home. This was our home. And, you took a torch to it. You were once a trusted colleague, a friend, a partner in our efforts to improve our community and the health and wellbeing of those who live in it. And you blew it all away.”