Dive Brief:
- A Santa Clarita, CA, city engineer is facing the possibility of nearly 14 years in prison after city officials said he kept more than $500,000 in cash bond refunds intended for city contractors, according to the Engineering News-Record.
- Authorities arrested David Rubira in May, and city officials said he diverted $533,571 into his own bank accounts from November 2012 to April 2015. Rubira pleaded not guilty last month to the embezzlement charges, and his preliminary hearing will be held Sept. 30, according to MyNewsLA.
- After an audit, KPMG US suggested that the city implement more procedural controls and oversight to prevent the potential for similar future occurrences.
Dive Insight:
According to officials, Santa Clarita has a program through which contractors, engineers and others doing work for the city can make a cash deposit rather than provide certain performance and bid bonds. Rubira allegedly volunteered to take charge of issuing refunds to contractors who made good on their obligations and were entitled to receive their deposits back. However, authorities claim Rubira opened up bank accounts with names similar to those who had refunds coming and deposited their checks into those accounts.
In recent months, the construction industry has been plagued by various alleged acts of fraud, including that of architecture firm employees at CannonDesign and U.S. Department of Veterans Affairs former director of the Cleveland Veterans Affairs Medical Center, William Montague.
Both Montague and former CannonDesign executive Mark Farmer were convicted and sentenced to prison for their roles in a bribery and kickback scheme intended to give CannonDesign an edge in winning VA hospital bids. Just this month, CannonDesign agreed to pay a $12 million fine to settle federal charges after withdrawing from a VA project in California and accepting legal responsibility for its employees' actions.