On September 2, 2009, Patrick David Dugan, a Certified Public Accountant, was arraigned in Orange County Superior Court on charges of unlawfully taking $49,000 from the Los Alamitos Rotary Club (LARC) by transferring money into his personal account while serving as the club treasurer. Mr. Dugan is charged with one felony count of grand theft and two felony counts of money laundering. The bail was set at $49,000 - the loss amount. The maximum sentence on these charges is four years and four months in state prison.
According to the complaint, Mr. Dugan, a Certified Public Accountant, had worked as the financial officer for LARC since 1998 and was solely responsible for maintaining the club’s financial records and presenting financial statements to the executive board and club members. Between December 2005 and December 2007, Mr. Dugan is alleged to have taken $49,000 from LARC by transferring the money from the club into his personal account. Mr. Dugan is accused of attempting to hide the embezzlement by altering LARC’s financial statements.
The alleged offense was discovered in April 2008, when Mr. Dugan became ill and was unable to perform his duties for LARC. The theft was discovered in May 2008 when members of the club noticed discrepancies between official bank records and the financial reports presented by Mr. Dugan. LARC reported the theft to the Los Alamitos Police Department, who referred the case to the Orange County District Attorney’s Office for investigation to avoid the appearance of a conflict of interest.
Plea Agreement And Subsequently Surrendered License As Part of Stipulated Settlement. On March 30, 2010, Mr. Dugan plead guilty to the two counts and was ordered to serve 90 days in jail, pay fines and fees and be on 3 years' probation. In 2011, the Board of Accountancy filed an Accusation alleging the conviction and Mr. Dugan's failure to report his conviction within thirty (30) days.
Given the conviction and the Board's intention to seek revocation, Mr. Dugan then surrendered his license effective September 30, 2012 which allows him to petition for reinstatement after a statutory period if he pays the investigation costs (over $10,000) and shows proof of rehabilitation and mitigating evidence.
Attorney Commentary: Embezzlement cases are becoming more common with the economic pressures facing our economy. Normally law-abiding people can be tempted when given unfettered access to funds. Even if the person intends to pay it back later, the unlawful or unauthorized taking is designated a theft. It also seems to be one of those offenses that once it begins, it is difficult to stop.
The best time to address one of these cases is before charges are filed. Civil settlements can be useful and help avoid criminal charges since often the company or business or individual simply wants the money returned. Thus, the ability to pay restitution is paramount. However, if someone has had financial problems, repayment can be an issue. This is the time to obtain a second job, cut every possible expense and do everything to amass funds for repayment.
In addition, bail arrangements need to be made in advance to ensure that there is self-surrender and a bail amount that is affordable. Usually in theft or embezzlement cases, the bail amount is the amount of the loss. There are creative ways to reduce bail in order to have more funds to pay restitution and to make sure the individual is out of custody and able to work to pay restitution.
If charges are filed, restitution is still critical. The days, however, when repayment alone will suffice are over in some jurisdictions. My clients and I have heard more than one blistering speech from a judge recently regarding "white collar crime." It takes a comprehensive plan to avoid jail time in these cases -- of which restitution and satisfying the alleged victim are key.
Posted by Tracy Green. Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have handled numerous civil and criminal cases where embezzlement or theft allegations or charges have been filed. The firm website is http://www.greenassoc.com/
