Pasadena’s city manager blamed a “a complete breakdown” of internal controls Tuesday as prosecutors announced the arrest of a former city employee accused of embezzling more than $6 million from city coffers and funneling some of the money through two local churches.
Investigators with the Los Angeles County district attorney’s office arrested Danny R. Wooten, 51, a former analyst with Pasadena’s Department of Public Works; Tyrone Collins, 55; and Melody Jenkins, 46.
The arrests come as part of a 60-count felony complaint alleging grand theft, conflict of interest and embezzlement.
For more than a decade, prosecutors contend, Wooten embezzled the funds by generating about 300 false invoices for the city’s underground utility program, which he managed.
The program -- independent of the city’s general fund -- is funded by a tax on electric customers. It pays for moving power and communications lines underground.
“The fact that this fraud went on for this many years is not only disappointing, it’s unacceptable,” said City Manager Michael J. Beck. “Clearly it is a complete breakdown of our internal controls.”
Wooten directed more than $3.5 million to Collins, the owner of Pasadena-based Collins Electric, through “questionable or unauthorized” invoices for labor and services involved in moving utility lines underground, according to an external audit conducted by KPMG for the city.
Officials published KPMG’s full audit Tuesday on the city’s website.
Money paid to Collins Electric was either repaid in cashier’s checks to Wooten or paid to New Covenant Christian Fellowship Center in Pomona, where Wooten is a senior pastor, according to the audit.
An additional $2.7 million was paid out to New Covenant and a second church Wooten is affiliated with, the Southern California Evangelist Jurisdiction Center in Pasadena, KPMG’s audit said. Wooten sits on its executive board, according to the church’s website.
It’s unclear if the churches ever received the funds. Wooten approved and picked up the checks made payable to the two churches, then deposited them in accounts held in his name, according to KPMG’s audit.
On Wooten’s city-owned computer, investigators found the template he allegedly used to generate sham invoices for one of the churches, listing charges ranging from $7,645 to $787,495.
The invoices from the churches claimed labor and services related to moving electrical lines underground, but KPMG auditors could find no valid purpose for the payments.
Invoices from the churches -- like those from Collins Electric -- lacked standard elements such as purchase orders and didn’t specify addresses where electrical work was to be performed, according to the audit.
One of the churches is also located in an area of Pasadena that wasn’t scheduled to have underground utilities work begin until 2016, the audit said.
Jenkins, a former temporary Pasadena city employee, was paid more than $40,000 for labor connected to moving utility lines underground.
City employees noticed accounting irregularities in May 2014, prompting an internal investigation, KPMG’s audit and a separate investigation by the district attorney's office, according to a city spokesman.
The case remains under investigation, but officials do not believe other employees were involved.
Wooten, who worked for the city for 12 years, was placed on administrative leave in March for an unrelated matter. He was terminated July 25 for reasons unrelated to the embezzlement investigation, city officials said.
Wooten is being held on $1.75-million bail and is scheduled to be arraigned Wednesday.
Reached by phone Tuesday afternoon, Bishop Milton, a pastor at Holy Assembly C.O.G.I.C. church in Pasadena, said he was still struggling to reconcile the Wooten he’s known for 20 years as a friend with the newly emerging depiction.
“He’s my right hand man. I’m shocked,” Milton said. “This is like unbelievable right now. Unbelievable.”