Ex-Newport Official Admits Embezzlement

Former Newport Beach Utilities Director Robert J. Dixon pleaded guilty Tuesday to charges that he embezzled $1.8 million from the city to buy art, jewelry and stocks, and pay for lavish trips abroad.

Dixon, 48, appearing gaunt and speaking softly, entered the plea to two counts of embezzlement before Superior Court Judge John J. Ryan. Dixon faces up to seven years in prison on the charges and is scheduled to be sentenced by Ryan on June 11.

He was arrested by Newport Beach police Jan. 13 for allegedly depositing in his personal bank accounts more than 400 city checks payable to nonexistent property owners. His arrest stunned many city officials and his close friends, who couldn’t believe Dixon, a leading contender to replace retiring City Manager Robert L. Wynn, would steal money from the city.

Equally shocking to his colleagues was the disclosure that he had a prior conviction for embezzlement, in 1972 while he was employed by Georgetown University. Wynn, who has since retired, said he was aware of the conviction and felt that the “thing had been resolved . . . and justice was done.”

Friends described Dixon as an avid traveler and art collector, who took vacations abroad to attend art auctions and in one year traveled to Europe and Tahiti, and made numerous trips to New York City to attend the theater and other performing arts events.

A lifelong bachelor, Dixon established an especially close relationship with the New York-based American Ballet Theater, donating thousands of dollars to the company and even serving for a time on its board of directors. Dixon developed close friendships with several of the dancers and, for a time, dated one of the principal dancers, friends said.

On his travels, he often stayed in the best hotels, renting rooms that cost upward of $400 a night. 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. The walls of his plush, trilevel condominium in Huntington Beach were dominated by framed prints. His collection was so vast--police seized more than 220 photographs from his home--that Dixon put a number of waterscapes on walls of the city Utilities Department.

Dixon has been held in jail since his arrest. His bail was $500,000.

His attorney, Stephan A. DeSales of Fullerton, said Dixon has confessed to everything. “He has admitted that it is his fault and he is responsible for what he did. But he doesn’t know why he did it or why he has this compulsive behavior,” he said.

Dixon has turned over everything he owns to Newport Beach for restitution for the money he embezzled over a 10-year period.

Earlier, Dixon, a 17-year city employee, signed a court stipulation that gave the city his last paychecks, personal accounts, his rights to use a luxury condominium in Jamaica for two weeks each year, his Huntington Beach townhouse, land in Arizona, a BMW, 39 credit cards, and an extensive art collection. DeSales said Dixon’s assets should total $800,000 to $900,000.

“I honestly think he was relieved when he got caught,” said DeSales, referring to the obviousness of his scheme. “It was like an elephant with mud on its feet walking across a white rug.”

DeSales said psychologists working with Dixon since January have found that his “compulsive behavior” surfaces when he is “under pressure” and feels a need to spend money. DeSales said it is an addictive behavior like gambling or drug abuse.

A full hearing is scheduled June 11 when Dixon is to be sentenced. DeSales said he will present testimony from psychologists and others in an attempt to minimize Dixon’s jail sentence.

City employees contacted Tuesday said they are glad the affair is approaching a conclusion.

“I’m really focusing on moving ahead,” said City Manager Kevin J. Murphy, who replaced Wynn when he retired earlier this year. “I think the organization has moved on. . . . We’re dealing now on making sure it won’t happen again.”

City Planning Director James Hewicker said he doesn’t dwell on the scandal anymore.

“I don’t think about it like I used to when it first happened. I used to think about it a lot,” he said. “It was really upsetting.”

DeSales said no bargain had been struck as to punishment, and the only agreement with Deputy Dist. Atty. Craig McKinnon was that Dixon would only be charged with two counts of embezzlement.

By agreeing to reduce the number of possible embezzlement counts against Dixon from 400 to two, DeSales said, the county avoided a lengthy criminal trial that could have cost taxpayers as much as $1 million.

The scheme Dixon used involved submitting phony paperwork to the city Finance Department for fictitious services or transactions. When a check was cut, Dixon collected it, forged a signature and deposited the money in his own accounts.

In some cases, the phony billings involved fictitious land purchases for a city water project. Written requests were made to the city treasury for checks to pay off fictitious homeowners at nonexistent addresses, ostensibly in return for an easement for a water line across private property.

A similar scheme allegedly was used to draw money to pay nonexistent homeowners for 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, according to police.

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

Police say 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 say.

The scheme unraveled when an investigator at a credit card firm called Newport Beach police to report that a large number of city checks were turning up in Dixon’s account. After a short investigation, police confronted Dixon and he confessed.