Road Contractor Tells of Making Profit to Recoup His Loss on an Earlier Project

A road contractor told police that he made a $70,000 profit on a $100,000 paving contract awarded without bids by a Westminster city official “as a way to get back” a loss he suffered on a previous project, according to court documents. “If you lose one place, you have to make it up somewhere else,” Jack M. Mitchell, president of J.M.M. Contracting of Phoenix Inc., told Westminster Police Detective Willie Lewis, according to the documents.

John Cyprien, who resigned his $52,000-a-year job as Westminster purchasing agent and deputy city administrator June 21, and Mitchell are each facing charges of felony conspiracy and embezzlement of city funds, Orange County Deputy Dist. Atty. Carl Armbrust said.

When Lewis asked if that was a good way to do business, Mitchell replied: “That was the way it was done in the construction business,” the court records indicated.

May Investigation

Police Chief Don Saviers said the complaint was filed after an investigation that began May 7 into irregularities involving a contract for paving some city streets that Cyprien is alleged to have approved.

The contract, in the amount of $100,848--allegedly $70,000 to $80,000 above the actual cost --went to Mitchell’s J.M.M. Contracting of Phoenix Inc. without a bid or estimate, investigators said.

Cyprien and Mitchell could not be contacted for comment Tuesday.

Saviers said it was a unique case because Cyprien, acting as city purchasing agent, approved the payment and the city Finance Department, using gas tax funds already budgeted for the job, paid the amount without question.

“It’s sort of a unique situation because it looked like a reasonable amount until we started looking into it and found out that the company was only renting us a little equipment,” Saviers said.

As city purchasing officer, Cyprien was head of the Purchasing Department and was authorized to approve expenditures without review.

Won Purchasing Post

He was hired in August, 1981, as director of field services and was then promoted to deputy city administrator responsible for purchasing, the city personnel office said.

The investigation was launched after authorities received a letter from Robert Snyder of Las Vegas, a former business associate of Mitchell’s, alleging irregularities in the contract.

In February, 1984, Mitchell’s company completed road repair work in Westminster but claimed the company had “gone over” $78,000 in materials for the job, according to the police investigation.

After the job, Mitchell wrote to Cyprien asking him to request the additional $78,000 from the city or from the U.S. Department of Housing and Urban Development, the two funding agencies.

But both the city and HUD said J.M.M. would have to do the job for “what was bid” and no extra money would be given.

“Shortly after this, Cyprien gave J.M.M. the (second) job without going through the competitive bid process,” court documents said.

After contacting several road-paving companies and Anaheim and Garden Grove public works officials for estimates of the same paving job, police determined that Mitchell’s bill “was far too much.”

Had Done a ‘Good Job’

Cyprien told police that he neglected to obtain any written estimates or competitive bids and offered the job to Mitchell’s company because J.M.M. had done a “good job” for the city on some road work in February.

Snyder had alleged that after the second job was finished, Cyprien and Mitchell then sat down and agreed on the $100,848 price, court documents said.

Cyprien told police he accompanied Mitchell and Snyder to Hawaii after the second job was done. Although Snyder said all trip expenses were paid by Mitchell, Cyprien told police that each was to pay his own portion of the expenses.

Police, who obtained Cyprien’s bank records with a search warrant, found a canceled check in the amount of $1,574 from Cyprien’s account to Mitchell.

Cyprien and Mitchell were not taken into custody. Instead, arrangements were made through their attorney for them to appear July 19 for arraignment.

Since the investigation took place, the city has reorganized its purchasing process, a city official said. All purchase orders now must be approved by the assistant city administrator before a check can be written.