Job Training Agency Fires Chief Over Secret Accounts : Finances: Board takes action against Douglas Shaw, who was suspended because of accusations that he misused funds. He allegedly withdrew more than $125,000 in hidden money from credit union.
The head of an El Monte-based job training agency who was recently suspended for alleged misuse of $127,000 in federal job training funds has been fired from his job amid new allegations that he kept two secret credit union accounts from which he withdrew more than $125,000.
Douglas Shaw, 50, executive director of the Mid-Valley Manpower Consortium since 1979, was dismissed late Tuesday night by the agency’s board of directors after they received a report indicating that Shaw kept phantom accounts for Mid-Valley in the El Monte City Employees Credit Union.
Shaw had sole access to the accounts and regularly withdrew cash in $100, $200 and $400 amounts over the last four years, said Michael Colantuono, the consortium’s attorney. The records do not indicate where the money came from or how it was spent.
In addition, Shaw sat on the credit union board and directed its employees to withhold balance statements and account information from the consortium, Colantuono said.
Shaw could not be reached for comment Wednesday, but his attorney, John Tyre, characterized the allegations as being totally inappropriate and said board members are blaming Shaw for the actions of other Mid-Valley employees. “After 17 years of devoted service to Mid-Valley, now they want to find an excuse to get rid of him because other members want to run it their own way,” Tyre said.
The allegations raise questions about the county’s ability to monitor more than $50 million in federal job training money funneled yearly to agencies such as Mid-Valley, the attorney said.
Auditors under contract to the county--Coopers & Lybrand--and those hired independently by Mid-Valley--Rubin and Ozurovich--are required to randomly check each agency’s accounting procedures against records kept in other places, such as the credit union, Colantuono said. The yearly audit reports given to the board clearly say such checks were performed. But those checks were never made, Colantuono said. The false statements misled the board and lulled them into a sense of complacency, the attorney said. Officials from the auditing firms could not be reached for comment.
“I think the consortium board is a victim here and so are the taxpayers,” Colantuono said.
But Jose Martinez, who oversees county job training funds as executive director of the Private Industry Council, said the audits met federal and county requirements. They are not intended to oversee day-to-day operations, which is the board’s responsibility, he said.
“It’s their job, not ours, to manage their own agency,” Martinez said.
Shaw has been on paid leave since he was suspended May 12. But his job will officially end July 19, unless he appeals the firing, Colantuono said.
In addition to the county, federal investigators from the Office of the Inspector General are examining Shaw’s expenditures for possible felony criminal charges.
County officials began investigating Mid-Valley earlier this year after an anonymous informant told them of possible misuse of funds at the agency, which provides summer employment and training for 1,000 adults and youths annually in the San Gabriel Valley. It receives about $3 million annually in federal Job Training Partnership Act money distributed by the county.
A county report completed last month found that Shaw violated federal regulations by paying $120,750 to cover the salaries of two Bradbury city employees for seven years. Another $7,000 in questionable expenses include Shaw’s $200 cash withdrawal at Santa Anita racetrack and a stay in a Las Vegas hotel.
