Prosecutors allege Thatcus "T.C." Richard helped steer numerous small contracts for audio-visual work to companies owned by friends and that in return, those companies subcontracted with a firm Richard owned, paying him more than $1 million.
His attorney, Richard Coberly, said after Monday's court hearing that his client maintains he has been falsely accused.
"From what he has told our office, he was a diligent employee and he's very upset that at this point there's allegations against him that he doesn't believe are true," Coberly said outside the courthouse.
Coberly asked for his client to be released on his own recognizance, but Los Angeles Superior Court Judge Upinder S. Kalra set Richard's bail at $775,000. A bail review is scheduled for June 25, Coberly said.
Coberly said Richard, who appeared in court in a wheelchair, has Stage 4 cancer in his back and hip.
"He's a very sick man," he said. "We're trying to make sure that he's in a private medical facility where he's getting the best care he can get."
Richard, 64, is charged with 27 felony counts, including misappropriation of public funds, embezzlement and contract fraud.
If convicted on all counts, he faces up to 20 years in state prison, according to prosecutors.
Richard, who was paid a little more than $100,000 per year by the DWP, retired in June 2014. DWP spokesman Joseph Ramallo last week said the agency was investigating whether Richard will be able to keep his pension.
The alleged fraud began as early as 1993, according to a statement from the DWP. Richard, who acted as a contract administrator for the utility, allegedly helped to steer approximately 140 city contracts to his friends' companies.
Most of those contracts were small, less than $50,000, and "subject to lower-level supervisory approval," the DWP statement said. The contracts were competitively bid, but Richard tailored the specifications to fit his friends' businesses and attract little interest from competitors, according to the statement.
Times staff writer Jack Dolan contributed to this report.