sf_puc.pngSan Francisco prosecutors today charged seven people, including five former San Francisco Public Utilities Commission workers, in an alleged procurement scam between 2003 and 2007 that bilked the city out of $200,000.

An investigation began in 2007, prompted by a letter from a whistleblower who prosecutors today declined to identify.

Former PUC Hetch/Hetchy power crew supervisor Donnie Alan Thomas, 45, and high-voltage electrician Miles Bonner, 60, are to be charged with 41 felonies and two misdemeanors for their roles in the alleged scam misusing the city’s vendor procurement system, District Attorney Kamala Harris said.

The charges include grand theft, conspiracy and embezzlement.

Harris said the men used PUC money to buy goods for both their personal use and for a private company they owned, Tri Delta Electric Inc., by creating false invoices.

The items included cell phones, furniture, plumbing materials and “expensive stereo equipment” for the men’s cars and “designer shades” for their homes, according to Harris.
However, the materials listed on the invoices would either be vague or contain completely fabricated information, according to prosecutors.

The items were bought through two city-approved vendors, two employees of which are also being charged in the case.

“Clearly there’s been a violation of the public trust,” Harris said today at a news conference attended by PUC General Manager Ed Harrington and City Attorney Dennis Herrera, whose offices are also involved in the investigation.

Harris said the men were “being paid by the city to do good work … and instead they’ve been lining their pockets.”

The investigation led to two other alleged scams by the men that involved falsely billing the city for labor costs, and failing to pay insurance and employment taxes for their private company.

Herrera said the PUC was “Johnny-on-the-spot back in 2007” for informing his office about the allegations.

The city attorney’s office will continue to “police diligently” what happens “in the public market,” Herrera said.

In addition to the procurement scam, Thomas, Bonner and a third former PUC employee, John Rauch, 69, who ran the Hetch/Hetchy Treasure Island crew and is also a principal in Tri Delta Electric, are accused of working on private electrical jobs while on PUC time.
Rauch is facing a felony grand theft charge and two misdemeanors.

The three men are also charged with allegedly underreporting the number of Tri Delta Electric employees and the type of work done to the State Compensation Insurance Fund, in order to reduce insurance premiums, and with filing false unemployment insurance tax information to the state Employment Development Department.

Two other former PUC workers, high-voltage electrician Robert Mazariegos, 56, and electrical line worker Vincent Padilla, 28, are alleged to have worked for Tri Delta Electric during PUC time and will be charged with felony grand theft.

“I take it very seriously when people misuse city money,” said Harrington. “It makes me very angry.”

According to Harrington, the men earned salaries between $70,000 and $100,000 working for the PUC.

“They were well-paid,” he said.

Harrington said all five PUC employees were subsequently either fired or resigned, and the agency has since changed some of its procedures, including revising how goods are ordered and implementing fraud training for employees.

In addition, Jean Quiroz, 42, the former vice president of Centennial Distributors Inc., and Liz Bradford, 40, an employee of Cole Hardware, and their companies are facing multiple felony charges, including grand theft, conspiracy and embezzlement.

Prosecutors said the women allegedly knowingly submitted invoices from the vendors to the PUC with false descriptions of purchases.

The vendors also made “substantial profits” on the items sold, Harris said.

Harris said the seven defendants have not been arrested and have been given 48 hours to turn themselves in. She dismissed concerns they might flee authorities.

“Because the law has a very long arm,” she said, smiling, “and they’re in enough trouble already.”

If convicted of all charges, Thomas and Bonner face a maximum 21 years in prison, plus hundreds of thousands of dollars in fines and restitution, according to Harris.

Rauch, Mazariegos and Padilla could face three years in prison, Quiroz 10 years and Bradford nine years, plus fines and restitution.

The two city vendors also could be ordered to pay hundreds of thousands of dollars in restitution.

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