Placentia’s Finance Services manager was arrested Wednesday night for allegedly embezzling $4.3 million from the city, according to prosecutors.
Michael Minh Nguyen, 34, of Irvine, is charged with 17 felony counts of misappropriation of public funds with sentencing enhancements for aggravated white collar crime over $500,000, and property loss over $3.2 million, according to the Orange County District Attorney’s office.
Currently held on $4.3 million bail—with a requirement to prove the money came from a legitimate source before posting a bond—Nguyen faces up to 29 years in state prison and an $8.6 million fine if he is convicted, the OCDA says.
He was hired by Placentia on April 21, 2008, given access to city accounts and given responsibility for wire transfers and maintaining financial ledgers. But between April 22, 2015, and April 12 of this year, Nguyen made 17 wire transfers from the city account to other accounts belonging to him and others, the OCDA alleges.
In the past four months alone, Nguyen transferred $2 million from the Placentia account, prosecutors claim.
It was not immediately clear what prompted the alleged embezzlement, according to Senior Deputy District Attorney Marc Labreche. It did not appear Nguyen was living a lavish lifestyle as he was renting an apartment in Irvine, added the case’s prosecutor.
The FBI alerted the city to the suspicious transactions on Tuesday, when the bureau’s Cyber Task Force was able to freeze $1.5 million that had been transferred from Placentia to Nguyen’s personal account and revert the funds back to the city, Labreche explained.
Placentia officials contacted the district attorney’s office the same day to take over the investigation of Nguyen to avoid any conflict of interest, Labreche said.
Nguyen was arrested by members of the OCDA’s Bureau of Investigations, which received investigative assistance from the same agency’s Public Integrity Team.
The city financial manager had been pulling down $97,291 in salary; $8,106 in other pay and $17,251 in benefits for a total compensation package of $122,648, according to the government watchdog Transparent California.
Those who doled that out to Nguyen reacted harshly to his alleged crime.
“This goes completely against the values of our city and the positive strides we have made during the last year,” says Placentia Mayor Jeremy Yamaguchi in a city-issued statement. “Any misuse of our taxpayers’ funds is adverse to the values and commitment that we strive for as a city.
“We immediately brought this to the attention of the district attorney’s office and have been continually working with our police department, the district attorney’s Public Integrity Team and other entities to ensure all the funds in question are recovered. We have taken immediate and decisive actions on this matter, and will continue to remain steadfast in our endeavors to provide the highest standards of public trust for our community.”
The city has already strengthened its internal financial controls, asked the OCDA for a forensic accountant to help with evaluating the loss and recovery of funds, and hired a forensic auditor to conduct its own comprehensive review of the city’s internal controls, officials say. And before all that, Nguyen was immediately suspended as the allegations came to light and later fired, according to Placentia’s City Administrator Damien R. Arrula.
“This alleged embezzlement and theft of public funds is an affront to the people of Placentia and to our hard-working employees,” Arrula says. “It is of grave concern to learn that a city employee would exploit his position and knowledge of our internal controls for personal gain. The City of Placentia will not tolerate any misconduct by any city employee to ensure the highest level of standards are being followed.”
The city will pursue all criminal and civil remedies to ensure Nguyen is punished and all the money he allegedly stole is recovered, Arrula added.
Nguyen is scheduled to be arraigned some time today in Santa Ana’s Central Jail. But the investigation is ongoing and anyone with information is asked to contact Supervising District Attorney Investigator Damon Tucker at 714.648.3667.