Alleged Embezzlement Stirs Disbelief in Newport Beach : Crime: Bob Dixon’s image left City Hall unprepared for his arrest amid accusations of stealing $1.2 million.

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

To friends, he was a best man at weddings, a godfather to their children, an opera and ballet buff. To his colleagues at Newport Beach City Hall, Dixon, 47, was a municipal man for all seasons: the efficient director of utilities, a mentor, a confidant, the man widely expected to assume the reins as the city’s new chief administrator next month.

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

After a humdrum City Council study session, two Newport Beach police detectives approached Dixon and asked him to step inside a small office. There is a problem, they said. Some city checks had turned up in Dixon’s personal accounts.

The dapper, bespectacled Dixon could only stare at the ground. Sources said Dixon told detectives he had no good explanations.

Tipped by a credit card company, police were looking at why city checks had apparently found their way into Dixon’s personal accounts. As police took him to jail, the loss looked minimal--maybe $60,000. But within days, the amount had skyrocketed to more than $1.2 million, authorities said--among the biggest cases of alleged municipal fraud in Orange County history.

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

The arrest shook City Hall to its foundation. Disbelief turned to shock and then anger. As officials and employees saw it, a trusted colleague--a City Hall fixture 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,” said Duane K. Munson, personnel director. “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 him. They suggested that this was an inherently good man overcome by a personality quirk, a character flaw that quietly raged out of control and eventually brought him down.

Dixon is in Orange County Jail in lieu of $500,000 bail. He is scheduled to be arraigned on embezzlement charges Friday. He would not be interviewed and referred questions to his attorney.

City officials say Dixon told police that he suffered a mental condition that led him to set up his elaborate scheme. In essence, he 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. “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 a Georgetown undergraduate, he was a chronic overachiever: majoring in government, serving in student government, coordinating the debating society’s tours. After graduation, he became executive assistant to the dean of the university’s College of Arts and Sciences. He earned a master’s degree at George Washington University.

But in 1971, various university club members began complaining that fictitious items had been charged to their accounts--gifts, meals, hotel rooms and a plane ticket to Chicago for the debate team, which had not gone to Chicago.

The largest expense was an around-the-world trip; the tab was submitted as a bill from a bindery company for work on the university yearbook. After an investigation by university officials, Dixon, the student activities director, was asked to resign.

In December, 1971, he was charged in U. S. District Court with 23 counts of mail fraud and embezzlement. There were allegations that Dixon had tapped advertising receipts from the school newspaper. He also allegedly transferred money from a student government bookstore to a personal account he named “Georgetown University Student Government.”

Dixon considered a plea of not guilty by reason of insanity, but a court-appointed psychiatrist found him mentally competent. In 1972, he pleaded guilty to two counts of embezzlement. He served five years probation and was ordered to continue psychiatric treatment as long as necessary, according to court papers.

At 30, Dixon moved to Newport Beach, where his parents had retired, friends said. In 1975, determined to rebound, he landed a job with Newport Beach.

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

It looked, until recently, like a small gamble that had paid off big.

Dixon rose quickly, becoming an administrative assistant in the utilities department and then the chief deputy. When the department director retired in 1985, Dixon finished first on a test for the post. Wynn decided to review the Georgetown case.

“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.”

Dixon became something of a prince of the city government. With his intelligence, wit and geniality, he was among the most admired people at City Hall. His image was of an effective administrator on the fast track, but always accessible, always available for help or advice.

He served on the management team that handled salary talks with employee associations--and at one time sat across the bargaining table from the detectives who would one day arrest him.

He was a patron of the arts, whisking off to New York for the opera or ballet. He donated thousands of dollars to the American Ballet Theatre and served on its board of directors, friends say. Dixon developed friendships with several 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.

On his travels, he often stayed in the best hotels, in rooms costing upward of $400 a night. He took jaunts to Europe, Hawaii, the Orient. He owned a time-share apartment in Jamaica, friends say. Often, he would treat his friends to trips. He drove a 1990 BMW to work.

At home, he collected black-and-white photographs, particularly art photos from the 1920s and ‘30s, Staneart said. Police seized more than 220 photos from his trilevel condo.

Friends and colleagues say they never saw the full extent of Dixon’s lifestyle. What was visible did not seem out of line, they said. The job paid $86,000 a year. And when his parents died 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 his salary--was more than enough to finance his lifestyle, his colleagues figured.

His alleged scheme, which investigators say dates back at least five years to his promotion to utilities director, was rather simple: Police suspect he submitted phony receipts for fictitious services or transactions. When a check was cut, Dixon collected it, forged a signature and deposited it in his own accounts, police said.

In some cases, the phony billings involved fictitious land purchases for a real city water project, police say. Written requests were made for checks to pay off fictitious homeowners at nonexistent addresses, ostensibly for easements so water lines could be put across the property, police say.

Another scheme allegedly was used to pay nonexistent homeowners for mineral rights to their property, purportedly so oil could be tapped. Money also was collected through phony billings from fictitious consultants or businesses for work that was never done, police say.

Authorities suspect that some of the billings from fictitious firms were produced on a computer seized from Dixon’s condo. In some cases, police suspect that Dixon collected the checks when they were returned to his office. Sometimes, checks were mailed to nonexistent businesses at post office boxes Dixon held, police say.

Since the arrest, auditors have checked city and credit union records back to the early 1980s, when Dixon came to the utilities department.

To recoup the losses, the city filed a lawsuit claiming that Dixon stole at least $1.2 million in city funds. The suit also seeks another $1 million in punitive damages.

“We are now giving top priority to recovering that money,” said Wynn.

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