Tustin : City Sues for Funds Allegedly Embezzled

The city has filed a lawsuit in an attempt to recover $168,721 allegedly embezzled by a former assistant finance director who was arrested last August.

Loni Hamblin Patterson, 45, was charged with embezzlement and forgery while husband Joseph Patterson and former husband Wallace Hamblin were arrested on counts of receiving stolen property. Loni Patterson had allegedly deposited city funds in a California First Bank account from 1981 up until her resignation in June, 1985, and written forged checks that were cashed by the two men.

The city’s lawsuit names the three and the bank as defendants and requests punitive damages as well as reimbursement for the amount lost. Attorney Daniel K. Spradlin, representing the city, said the bank was named because it “negligently investigated, controlled, managed and operated” the city’s account.

Spradlin added that the city also asks for a full accounting of all the defendants’ transactions to be sure that the $168,721 was the total amount taken. “My understanding from the police is that this is only the amount that could be definitely substantiated and there may, in fact, be additional funds involved,” he said.

He said the lawsuit will probably have to wait until after the criminal case is completed so that the defendants cannot avoid testifying by arguing that it could affect the other trial. The bank is not involved in the criminal case.