Agency in Jobs Scam to Return $2.4 Million

A Hollywood job training agency that fleeced the city and county of millions in a welfare-to-work scheme agreed Thursday to return $2.4 million in public funds, the district attorney’s office said.

In a sampling of records studied, nearly all of the 1,900 jobs that the United Community Resources Agency claimed to have found for clients were phony, prosecutors said. Money that was supposed to be spent on helping refugees and other recent immigrants find those jobs instead accumulated in the agency’s bank accounts, the district attorney’s office said.

At an arraignment hearing Thursday, the agency pleaded no contest to misuse of public funds and falsifying public records.

The investigation began in October 2000 when a group of employees gave the district attorney’s office employment records they thought were fraudulent, Deputy Dist. Atty. Jennifer Snyder said. Investigators looked at a sampling of those records and found that as much as 85% of them claimed that jobs had been found for clients at companies that either didn’t exist or were listed with false addresses and phone numbers.

“This is the kind of thing that gets the Golden Fleece Award, because public dollars are being just frittered away,” said Snyder, who heads the district attorney’s internal welfare fraud section.

In October, the district attorney served search warrants and seized the $2.4 million in the agency’s bank account, which the agency has agreed to forfeit. Under its plea, the agency also will abandon $800,000 in current billings to the county and city.

The training agency’s board of directors said in a written statement that it was “deeply troubled over the charges.”

“Until today, our organization’s 28-year history was notable for the excellence of our programs, which received wide commendation, and, until this recent series of events, had an enviable track record.

“The actions in question eluded not only our board of directors and independent accountants but, until recently, city and county grant program auditors.”

The agency began as the United Chinese Restaurant Assn. Cooking School but changed its name and mission after welfare reform took hold in the mid-1990s, Snyder said. The county Department of Public Social Services contracted its welfare-to-work programs to that agency and 13 other nonprofit groups. The agency seemed like a good fit for refugee programs, Snyder said, because staff members could speak several languages.

From 1998 to 2001, the value of the agency’s contracts doubled to more than $4 million, according to tax filings and audit reports.

In May 2001, the county audited the agency and discovered falsified client records. Rather than rescind contracts, the county ordered the agency to refund the $68,858 in question.

Despite that discovery, the county departments of Public Social Services and Community and Senior Services continued paying the nonprofit to administer training programs. Since 1999, the training agency has received nearly $7 million in revenue, 94% of which came from government contracts.

When its money was seized in October, however, the agency closed its doors and the county sent its clients to other agencies.

The district attorney also has charged the agency’s executive director, Angelita Gonzalez, with misuse of public funds, falsifying public records and grand theft. She has pleaded not guilty.

The theft charge stems from the agency’s pursuit of another $2 million in contracts for the coming year, allegedly knowing job placement claims were false. That money was not paid.

Michael Sobel, an attorney representing Gonzalez, said agency employees could have falsified documents without his client’s knowledge.

He added, “No one’s saying the agency didn’t do its job of helping people.”

The agency’s attorney, Michael Artan, also blamed employees.

“It is apparent that something improper happened,” he said. “It seems to us it occurred at the lower levels of the organization.”

As part of the plea agreement, the agency will aid the investigation.