Agency Director Admits Embezzlement : Plea bargain: Fired head of Southeast Asian refugee service pledges to repay the $70,000 he took. Sentencing is deferred.

The dismissed director of an agency serving Southeast Asian refugees pleaded guilty Friday to embezzling more than $70,000 and his lawyer promised he would make full restitution.

Kao Thao, 30, admitted misappropriating $70,577 from Lao Family Community Inc. of Garden Grove while serving as executive director between 1988 and last July.

Under the deal struck with prosecutors, Thao could be sentenced to a maximum of one year in jail if he pays back the funds he embezzled. His sentence, which could also involve no imprisonment, will be based on a probation report now being prepared.

If Thao fails to come up with the money by the time he is sentenced, he could serve four years and eight months in prison, state Deputy Atty. Gen. James D. Dutton said.

“We have an interest in trying to get the money back for the victims and this plea, I think, encourages that,” Dutton said after the court hearing.

Thao, accompanied by his wife and two other family members, would not comment. His attorney, Bruce Bridgman, said Thao would meet the restitution payment deadline. Thao’s family members have raised about half of the money owed, he added.

He has already paid back $19,000, Bridgman said. Thao repaid the sum after officials at the center began an internal financial review, but before law enforcement agencies became involved.

“I think an early admission of contrition is a significant thing,” Bridgman said. “He did not prolong this, he did not dodge his responsibility to pay the money back. And I think he felt justified, when he initially took the money, that he was doing the right thing.”

The lawyer said Thao invested the agency money in residential property in his own name in an attempt to generate cash to pay bills that had accumulated with the Internal Revenue Service for unpaid payroll taxes and other debts.

“It’s one of those things where sometimes the spirit of the law and the letter of the law are two different things,” Bridgman said. “When you look at the letter of the law, it was probably broken, whereas the spirit of the law may not have been.”

State investigators began the probe following an initial complaint from a Lao center official and after receiving reports that checks to meet payroll and to buy food for a Huntington Beach child development program had bounced.

Lao Family Community acting director Gayle Morrison said Friday the proposed restitution equals the amount stolen, but does not include indirect costs such as charges for checks that bounced.

“We are still trying to figure out direct and indirect costs,” she said.

The investigation had not affected the agency’s programs and funding, Morrison said. Thao’s attorney said his client has received letters of support from members of the Southeast Asian community.

“I think he’s extremely depressed and humiliated,” Bridgman said. “I think he feels he shamed his people.”