Fire Officials Suspend Accountant Suspected of Embezzling $750,000

County fire officials Tuesday suspended an accountant suspected of embezzlement after Board of Supervisors Chairman Mike Antonovich complained of “foot dragging” in the investigation of the possible theft of as much as $750,000.

William Paternostro, 39, a civilian accountant who has worked for the Fire Department since 1976, was suspended at the end of the workday, according to Deputy Fire Chief Earl Fordham. No charges have yet been filed against Paternostro, but he was identified in search warrant documents filed in Municipal Court as a suspect in the embezzlement of money through a petty cash fund.

Antonovich said that Auditor-Controller Mark H. Bloodgood told him that the loss of Los Angeles County Fire Department funds in an embezzlement spanning a year or more was at least $500,000 and may climb as high as $750,000. The loss of money funneled through the petty cash fund was first estimated to be at least $145,000, according to court records.

Antonovich met in executive session Tuesday with Supervisors Ed Edelman and Kenneth Hahn to discuss the investigation of the missing money and why Paternostro was still on the public payroll.

“There seems to be foot dragging, and we’d like to know why,” Antonovich said after the meeting. “I am irate that a person who is accused of embezzling hundreds of thousands of dollars has not been suspended,” Antonovich said. “I mean, that’s crazy.”

Paternostro, who has declined comment on the case, had been transferred in August from his accountant’s post to a clerk’s job in the Fire Department’s hazardous materials unit. His transfer came after fire officials became suspicious that something might be amiss in the way that a revolving petty cash fund was being handled, officials said.

The embezzlement probe is being conducted by representatives of the county chief administrative officer, the county auditor-controller and investigators from the forgery-fraud detail of the Sheriff’s Department.

As outlined in an affidavit filed by Sheriff’s Detective Bobbie McDonald, the scheme involved the manipulation of a fund used to pay minor expenses incurred by county firefighters on the department’s behalf.

The petty cash fund, administered by the Fire Department and maintained by the credit union that serves county firefighters, was designed to fluctuate within set limits--never exceeding $6,000--as money was withdrawn to pay expenses and then was reimbursed by the county.

After an investigation was started, a department accountant reported finding that checks--some of them exceeding the $6,000 limit--had been deposited in the petty cash account, then transferred by wire to several financial institutions.

“Beginning in August, 1986, wire transfers started transferring funds from (the) petty cash account into (the) suspect’s account,” Detective McDonald reported. “As of July 15, 1987, evidence reveals approximately $145,000 in questionable wire transfers.”

According to McDonald, Paternostro was the only Fire Department employee authorized to transfer funds by wire. Checks deposited into the petty cash account, then transferred, are thought to have been sent by outside organizations to pay for fire protection services, officials said.