Former SF Public Utility Commission Supervisor Pleads Guilty to Felony Charges in Procurement Scam

Monday, September 19, 2011

CONTACT: Stephanie Ong Stillman, DA Gascón’s Office, (415) 553-1167
ADA Seth Steward, DA Gascón’s Office, (415) 553-1014

SAN FRANCISCO, CA – District Attorney George Gascón announced today that Donnie Alan Thomas, a former Supervisor at the San Francisco Public Utilities Commission (SFPUC), pled guilty to felony charges in a procurement scam to defraud the PUC for personal benefit.

As a result of this plea today, Thomas will serve three years in state prison. In addition, Thomas will be ordered to pay over $319,000 in restitution to the SFPUC, over $109,000 to the State Compensation Insurance Fund, and over $59,000 to Employment Development Department.

“Stealing public money impacts all of us, said San Francisco District Attorney George Gascón. “Money that should have been used to benefit the citizens of the City and County of San Francisco instead ended up in the defendant’s pocket. Public corruption will not be tolerated while I am the District Attorney.”

Thomas, a former supervisor of the San Francisco Public Utilities Commission Hetch/Hetchy Power Crew, engaged in a conspiracy to defrauded the SFPUC for personal benefit through use of the city’s vendor procurement system.

Two city vendors are alleged to have been involved in the conspiracy. It is alleged that employees of those vendors knowingly submitted invoices to the SFPUC with false descriptions of items purchased. The false invoice descriptions allowed Thomas to conceal the fact that he was purchasing items for his personal benefit.

Additionally, Thomas worked on private electrical contracts through his company, Tri Delta Electric, Inc. (TDE) while on SFPUC time. Thomas was an officer in the corporation. It is alleged that the three officers of TDE split the profit made on the private jobs they worked during SFPUC time.

In addition, Thomas defrauded the State Compensation Insurance Fund by failing to accurately identify the number of TDE employees and the type of work done in order to reduce the premiums paid. Thomas also defrauded the Employment Development Department by not withholding unemployment insurance taxes from the paychecks of TDE employees and did not pay unemployment taxes to the Employment Development Department.

“Although the events occurred prior to my arrival, I’ve since implemented a number of new internal controls and procurement changes to prevent these heinous activities from happening again,” said SFPUC General Manager Ed Harrington. “Today we have sent a strong message that the City will not tolerate public servants who violate the public’s trust. I applaud our San Francisco District Attorney, City Attorney, and Mayor for their leadership in seeing that justice is served.”

The case is continued to set sentencing on November 10 in Department 28 at 9:00am.
Today, before the Honorable Carol Yaggy in Department 28 of the San Francisco Superior Court, defendant Thomas pled guilty to four felony charges including altering or forging requests for payment in violation of California Penal Code Section 470(d), presenting fraudulent claims to the City and County of San Francisco in violation of California Penal Code Section 72, embezzlement and falsification of accounts by a public officer in violation of California Penal Code Section 424, and making a false statement for purpose of reducing premium, rate, or cost of workers compensation insurance in violation of California Insurance Code Section 11880(a). The defendant also pled guilty to failure to file return or report or to supply information in violation of California Unemployment Insurance Code Section 2117.

There are four other co-defendants who have already pled guilty in this
case: John Rauch, Robert Mazariegos, Vincent Padilla, and Centennial Distributors, Inc. There are five other co-defendants whose cases remain open and under investigation.