School lunch accountant pleads not guilty to embezzling $1.8 million

A former Rialto school district accountant accused of embezzling $1.8 million in schools’ lunch money after being seen on video stuffing cash in her bra pleaded not guilty Wednesday to 16 felonies.

After entering the not guilty pleas, Judith Oakes, 48, was held in lieu of $1.8-million bail by a San Bernardino County Superior Court judge

Oakes could serve up to 11 years in prison if convicted of all the charges in what Rialto police say is the largest white-collar crime case they have ever handled.

Oakes was charged Tuesday.

As a nutrient services accountant, Oakes oversaw the lunch money collected from the district’s 29 schools, along with related state and federal funds. The investigation into Oakes remains ongoing and police are planning to question other district officials as part of the probe.

Rialto Police Capt. Randy De Anda said the department was also investigating a supposed confession letter from Oakes, which has yet to be authenticated. De Anda said the letter was turned over to the school district last Friday by the San Bernardino Sun newspaper.

Oakes, who lives in San Bernardino, was arrested Aug. 7 on the basis of the video evidence, authorities said. Law enforcement agencies and the state Department of Education are investigating why the loss was not discovered earlier.

An investigative firm hired by the Rialto Unified School District has so far found a “documented” loss of at least $1.8 million dating to 2005, but warned that the losses could be as high as $3.16 million, including discrepancies that could not be documented. The district’s superintendent and his deputy have been placed on leave by the school board. Both have denied any wrongdoing.

In a statement to The Times, Supt. Harold Cebrun denied any knowledge of the wrongdoing, “strongly condemned” Oakes’ behavior and denied any romantic involvement with the accountant.

Through his attorney, Cebrun noted that the school board president had told the public that Cebrun had fallen into Oakes’ web that “many men fall into,” implying that there was a romantic connection. He also pointed out that some board members have long sought to oust him. Those in more clear supervision roles over Oakes remain at work, he added, including the acting superintendent who oversaw the district’s finances.

Oakes resigned the day after her arrest. She earned about $77,000 annually, but by all accounts lived a luxury lifestyle that included two homes, off-road vehicles and expensive trips. According to De Anda, Oakes said “she had unfettered access to enormous sums of money over the years — much of it in cash.” A search of her home turned up thousands of dollars in cash, De Anda said.

Cebrun and his assistant, James S. Wallace, were placed on paid leave, but neither is considered a suspect, De Anda said.

School board members, meanwhile, are questioning the oversight of the lunch money. “We have to ask: How could this person get away with this for so long? How did someone not catch her sooner or discover earlier that money was missing and the figures weren’t adding up?” school board Vice President Edgar Montes asked last week.

District officials said they were working to recover the money if possible and implement new practices to oversee lunch funds. It’s been a tough year in the 26,000-student Rialto school district.

In January, a high school basketball coach was shot at a San Bernardino park and accused by police of withholding information about the attack. Another high school basketball coach was arrested in March and accused of molesting two of his female players.

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richard.winton@latimes.com