Embezzlement Suspect Kept Up Impeccable Front

This was not the face of an embezzler. No way, not Bob Dixon.

To friends he was a caring and kind individual--a best man at weddings, a godfather to their children, a cultured opera and ballet buff. To his colleagues at Newport Beach City Hall, Dixon was a municipal man for all seasons. He was the strong and efficient director of utilities, a mentor, a confidant, the person widely expected to assume the reins next month as the city’s new chief administrator.

But that appealing image, seemingly as sharp and glossy as the black-and-white art photographs Dixon loves to collect, was torn to shreds last week.

After a humdrum City Council study session, a pair of Newport Beach police detectives approached the 47-year-old city official and asked him to step inside a small office at City Hall. There’s a problem, they said. Some city checks had turned up in Dixon’s personal accounts.

The dapper, bespectacled utilities director could only stare at the ground. I’ve got no good explanations, he reportedly told the investigators.

Tipped by a credit card company, police were looking for an explanation of why city checks had apparently found their way into Dixon’s personal credit card and bank accounts. As police took him to jail Monday, the loss looked minimal--maybe $60,000 seemed to have been taken. But by week’s end, the amount had skyrocketed to more than $1.2 million, authorities said, making it among the biggest cases of municipal fraud in Orange County history.

If Dixon did all this, it fits a pattern.

In the early 1970s, he pleaded guilty to embezzling funds from Georgetown University after school officials accused him of taking $83,000 while serving as student activities director. He was put on probation for five years and had been under psychiatric care pretty much ever since.

News of the arrest last week shook Newport Beach City Hall to its foundation. Disbelief quickly turned to shock and then anger. As they saw it, one of their most trusted colleagues--a man who been a fixture at City Hall for 17 years--had turned against them.

“You can’t help but feel damaged by the indiscretion of someone in a field where trust is a cornerstone,” Personnel Director Duane K. Munson said. “When someone in our fraternity violates those trusts, it affects all of us. Most of the time we try to be better than good, to be worthy stewards of the public trust. But it’s hard to overcome something like this.”

Even so, many of Dixon’s friends continued to talk sympathetically about their colleague, who is in County Jail in lieu of $500,000 bond while he awaits arraignment Jan. 31. They suggested that this was an inherently good man overcome by a quirk in his personality, a character flaw that quietly raged out of control and eventually brought him down.

City officials say Dixon told police after his arrest that he suffered a mental condition that led him to set up his elaborate scheme. In essence, Dixon maintained that he wanted to be caught, that he had a self-destructive side that always undercut an otherwise exemplary career, they said.

“The man we knew as Bob Dixon wasn’t the guy who was the embezzler--that guy never showed his face,” said Jeff Staneart, the city’s deputy utilities director now running the 50-person department. “We feel we’ve lost a loved one, a family member, a mentor, a leader. It’s a very empty feeling.”

The roots of Dixon’s downfall stretch back several decades.

As an undergraduate at Georgetown University in Washington, Dixon was a chronic overachiever. The native of Glenview, Ill., majored in government, served as parliamentarian for the Senior Council and acted as touring coordinator for the debating society. After graduation, he became executive assistant to the dean of the university’s College of Arts and Sciences. In the meantime, he collected a master’s degree at George Washington University.

But it was in his next job with Georgetown, as student activities director, that Dixon landed in trouble. In the spring of 1971, members of various university clubs began complaining that fictitious items had been charged to their accounts--gifts, meals, hotel rooms. A plane ticket to Chicago, for instance, was billed to the debate team, but the club never went to Chicago.

The largest expense was an around-the-world trip that included charges for plane fares, hotels, meals and other expenses. The tab was submitted to the university as a bill from a bindery company for work on the university yearbook.

After an investigation by university officials, Dixon was asked to resign.

“He was highly trusted,” James F. Kelley, the university vice president for administrative affairs, told the Washington Post at the time. “He was unquestionably held in very high regard by everyone here.”

But the embarrassing dismissal was only the beginning. In December, 1971, he was charged in U.S. District Court for the District of Columbia with 23 counts of mail fraud and embezzlement from 1968 through 1971.

Among the charges were allegations that Dixon had tapped advertising receipts from the school newspaper, the Hoya, and transferred them into a personal checking account he maintained under the name “Hoya.” He also allegedly transferred money from a Student Government bookstore to a personal account he dubbed “Georgetown University Student Government.”

Dixon initially tried to plead not guilty by reason of insanity, but that defense was rebuffed when a court-appointed psychiatrist found him mentally competent.

A source in Washington familiar with the case, however, recalls that Dixon did exhibit a remarkable facility for spinning a tale.

“He developed fantasies about his life that he carried out to an incredible degree,” said the source, who asked not to be named. For example, the source said, Dixon told others that “his parents were involved in an airplane accident. It never happened.”

His defenses exhausted, Dixon in 1972 pleaded guilty to two counts of embezzlement. He never served jail time but did five years’ probation and was ordered to continue psychiatric treatment as long as necessary, according to court papers.

Life seemingly in disarray at age 30, Dixon picked up the pieces and moved to the West Coast, where his parents had settled into retirement in Newport Beach, friends said. In 1975, determined to rebound from the East Coast debacle, he landed a post with the city of Newport Beach under a federal job development program that paid half his salary.

Although there were no strict disclosure requirements as part of the program, Dixon seemed eager to repent for his crimes, readily reporting his past troubles on a job application. City Manager Robert L. Wynn checked into the matter and learned that the issue had been resolved to the university’s satisfaction, so he took a chance and tapped Dixon as a supply clerk for the city.

It looked, until last Monday, like a small gamble that paid off big.

Dixon quickly rose through the ranks, becoming an administrative assistant in the Utilities Department in the early 1980s and then the chief deputy. When the longtime department director retired in 1985, Dixon finished first on a test to determine who was best suited to fill the vacancy. Wynn, however, decided to revisit the Georgetown embezzlement case, going so far as to review a copy of the legal papers from the District of Columbia.

“We discussed it, and he looked me right in the eye and said he had learned his lesson and hoped a stupid error he made 12 years before wouldn’t be held against him for a lifetime,” Wynn recalled. “I believed him and made the appointment. . . . In retrospect, with 20/20 hindsight, I wish I had not appointed him, I wish I had never met him, I wish he had never moved to Newport Beach.”

Until last Monday, Dixon was something of a prince of the city government. With his intelligence, quick wit and genial nature, Dixon was among the most admired people at City Hall. His tortoise-shell eyeglasses and well-tailored suits helped round out the image of an effective administrator on the fast track to the top.

Colleagues say he was always accessible, always ready to provide help or advice. If you’ve got a problem, they said, go find Bob Dixon. He was the type of boss who could talk to his subordinates, whether they were prized technicians or minimum-wage clerks.

Many city officials grew to trust Dixon implicitly.

He served on the three-man management team that handled salary talks with the various employee associations (and at one time sat across the bargaining table from the two detectives who would later take him into custody). He helped select and bring on line the city’s new computer system. Dixon even served on the board of directors at the Newport Beach City Employees Federal Credit Union.

The Dixon lifestyle seemed to fit the man--worldly, urbane, jet setting.

He was a patron of the arts, often whisking off for a whirlwind weekend to New York City for the opera or ballet. Dixon, a lifelong bachelor, established an especially close relationship with the New York-based American Ballet Theatre.

He donated thousands of dollars to the ballet company and had even served on its board of directors, friends say. Dixon developed friendships with several of the dancers and, for a time, dated a principal ballerina, friends said. Officials and dancers with American Ballet Theatre did not return phone calls from The Times.

“It was not uncommon for him to go back once a month to the East Coast,” said Staneart, Dixon’s second in command at the Utilities Department. “For him a trip back to New York was something less of an effort than it is for most of us to commute up to Los Angeles for a concert. He didn’t know what jet lag was.”

On those travels, he often stayed in the best hotels, bedding down in rooms that cost upward of $400 a night. Dixon also took jaunts to London, Europe, Hawaii, the Orient. He owned a time-share apartment in Jamaica, friends say. Often he would treat his friends to trips.

At home, he collected black-and-white photographs, focusing in particular on art photos from the 1920s and ‘30s, Staneart said.

The walls of his plush, trilevel condominium in Huntington Beach seemed those of a high-class photo gallery. One whole wall was dominated by a book shelf, but the rest of the space was devoted to framed, artsy shots: landscapes, famous faces, reclining nudes.

Scores of other photographs and prints were stored in boxes or artists’ satchels. The collection was so vast--police seized more than 220 photographs from his condo alone--that Dixon put a number of lush photos of waterscapes on the walls at the city Utilities Department.

Aside from the photographs, Dixon’s condo was dotted with a dozen masks he had collected. Other costly collector’s items included portraits of Winston Churchill, Alexander Hamilton and Abraham Lincoln, matted and framed beside their original signatures, authorities said. Dixon drove a 1990 BMW to work.

Friends and colleagues say they never did see the full extent of Dixon’s lifestyle; the utilities director kept many of the details under wraps. What was visible--the frequent trips, the photo collection, the expensive car--didn’t seem so out of line, they said.

They explained it away very simply. Dixon made $86,000 a year from his job as a department head. Moreover, when his aging parents died within a few months of each other eight years ago, Dixon told colleagues he inherited a fairly healthy estate, including a pricey home that he sold.

That apparent nest egg--combined with a healthy salary--was more than enough to finance Dixon’s single lifestyle, his colleagues figured.

But their reasoning was dashed by the arrest last Monday. Though police investigators initially suggested that the embezzlement was rather clumsily done, most city employees were shocked that Dixon--their friend and colleague--was suspected of pulling off something of that magnitude and hiding it for so long.

The alleged scheme, which investigators say dates back at least five years to his promotion to utilities director, was rather simple.

Police suspect that Dixon submitted phony receipts for fictitious services or transactions to the Finance Department. When a check was cut, Dixon collected it, forged a signature and deposited the money in his own accounts, police said.

In some cases, the phony billings involved fictitious land purchases for a city water project that is in fact under way. Written requests were made to the city treasury for checks to pay off fictitious homeowners at nonexistent addresses, ostensibly to pay for an easement so a water line could be put across the private property, police allege.

For example, one billing seized by police requisitioned a check to pay off Mr. Charles Lubin at 1892 Titus Drive in Fountain Valley, according to court documents. But there is no Charles Lubin in Fountain Valley. In fact, there is not even a Titus Drive in the city.

A similar scheme allegedly was used to draw money to pay nonexistent homeowners for the mineral rights to their property, purportedly so oil could be tapped. Money was also collected through submission of phony billings from fictitious consultants or other businesses for work that was never done, police charge.

To aid in the scheme, authorities suspect, some of the billings from fictitious firms were produced using a Macintosh computer that was seized from Dixon’s house.

Police suspect that in some cases Dixon collected the checks when they were returned to his office to be dispatched. But in other instances the checks were mailed to nonexistent businesses at post office boxes held by Dixon, police allege.

Since the arrest, a team of auditors has checked city records dating to the early 1980s, when Dixon first came to the Utilities Department. An audit was also conducted at the credit union.

The city has already moved to recoup the losses, filing a lawsuit last Wednesday claiming that Dixon stole at least $1.2 million in city funds between 1981 and 1992. The suit also seeks an additional $1 million in punitive damages.

“We are now giving top priority to recovering that money,” said Wynn, who suspects that it will take upward of two months before every lead is exhausted.

On Saturday, a reporter visited Dixon at County Jail. Looking a bit haggard and tousled, he refused to answer questions, repeatedly referring them to his attorney.

“He’s very depressed,” said Stephan A. DeSales, the Fullerton attorney representing Dixon. “He’s had a history of psychiatric treatment over the last 20 years. I’m concerned about him. This is pretty enormous stuff. We’re attempting to arrange for psychiatric care.”

Colleagues and friends, meanwhile, remain frozen in a tug of war of emotions.

“I’ve spent a couple nights looking at the bedroom ceiling trying to come up with an answer for why he did it,” said Munson, the city personnel director. “I can’t find a rational reason. It’s like trying to understand Latin. I can’t figure out why he did this.”

Times staff writers Robert W. Stewart in Washington and Rose Kim in Santa Ana contributed to this story.