Newport Beach Sues Banks, Others to Recoup Embezzled City Money
In an attempt to recover some of the $1.8 million embezzled by former city employee Robert J. Dixon, Newport Beach is suing banks and credit card companies that allegedly did business with him.
In a civil suit filed Monday, attorneys for Newport Beach charge that the banks and credit card companies were negligent in not catching checks he forged. The suit says those institutions “owed a duty . . . to exercise reasonable care in accepting for deposit or payment checks drawn on (Newport Beach’s) account.”
The suit also argued that the banks and credit card companies, through their routine credit checks, should have ascertained that Dixon’s bank balances were “in no way commensurate with (his) income” as a city employee.
Dixon, 48, was convicted of diverting city funds to his private accounts while serving as director of the utility department. He was sentenced last month to four years in prison.
The lawsuit asks for unspecified damages.
Defendants listed in the suit are Bank of Newport, Bank of America, Chase Manhattan Bank, American Express Co., Citicorp Diners Club, Manufacturers Hanover Trust Co., Citibank, FCC National Bank, First Card, American Telephone & Telegraph and 20 currently unknown “John Doe” firms or individuals with whom Dixon allegedly deposited forged checks.
No date has been set for the trial.
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