7 former top officials of Beaumont charged with corruption

Prosecutors on Tuesday announced charges against seven former top officials in the city of Beaumont, alleging a sweeping web of corruption that dates back more than two decades and cost taxpayers nearly $43 million.

The Riverside County district attorney’s office accused the officials of an elaborate scam involving the sale of municipal bonds for projects handled by companies in which they had a financial interest. They also alleged officials secured interest-free loans for friends and colleagues with taxpayer money.

“Public servants must remember a basic truth – we serve the people. Any money handled by a city or any government is the people’s money and should be handled as such,” said Riverside County Dist. Atty. Mike Hestrin at a news conference. “Those who run our governments and make the laws are not above the law.”


Hestrin added the case should be a cautionary note to other cities to ensure contracting is free of conflicts of interest and waste.

Prosecutors allege that the Beaumont corruption was able to continue for so long in part because it involved so many officials in the city of 40,000 about 78 miles east of downtown Los Angeles.

In court documents filed Tuesday, Hestrin accused former City Manager Alan Kapanicas, former Economic Development Director David William Dillon, former Public Works Director Deepak Moorjani, former Planning Director Ernest Alois Egger, former Finance Director William Kevin Aylward, former City Atty. Joseph Sandy Aklufi and former Police Chief Francis Dennis Coe Jr. of years of white-collar crimes.

If convicted, the defendants would be forbidden from ever serving in public office again, prosecutors said. With the exception of Egger, all were arrested Tuesday and are expected to appear in court Thursday. Egger is expected to surrender to authorities Wednesday, officials said.

Tuesday’s charges followed more than a year of investigation by the district attorney’s Public Integrity Team, which found that Dillon, Egger and Moorjani had used their public offices to enrich themselves personally and secure interest-free loans for friends and colleagues with taxpayer money.

Beaumont was at the center of a public corruption probe in April 2015 when investigators with the district attorney’s office and the FBI raided City Hall. They hauled away dozens of boxes of records, computers and other items.

At the time, sources familiar with the investigation said the raid was part of an ongoing investigation of the municipality’s business relationship and contracts with Urban Logic Consultants Group, a Beaumont firm whose offices were also searched by investigators, officials said in a statement.


Authorities said Tuesday that the investigation turned up evidence of alleged improper ties between the company’s principals – Dillon, Egger and Moorjani – and their decisions as the heads of Beaumont’s economic development, planning and public works departments, respectively.

According to investigators, the three urged city leaders to issue bonds, which were then used to contract work to Urban Logic Consultants and turned them a profit, prosecutors said.

In 2003, the city approved a fee on new developments to help fund regional transportation projects, prosecutors said. Those fees amounted to more than $36 million. But instead of sending the money to regional projects, Kapanicas, Dillon, Moorjani, Egger, Aylward and Aklufi allegedly manipulated city documents, kept the money in Beaumont and then spent it on Urban Logic Consultants contracts.

From 2010 to 2013, Kapanicas and Aylward worked with Coe to secure the police chief two interest-free loans with city money. In total, the group lent more than $113,000 to Coe and other Beaumont Police Department employees, prosecutors allege.


At the same time, Kapanicas and Aylward were also allegedly inflating sales tax by lending its resale tax permit to Beaumont Electric, a private business. The two never requested City Council approval before awarding the company an interest-free $6.2-million loan to purchase electrical equipment, officials said.

Urban Logic has provided planning, engineering and economic development services to Beaumont for the last two decades.

In 2010, several former directors of Urban Logic sued a Beaumont citizens group for defamation and trade libel. The lawsuit was rejected, and in an appellate court ruling affirming the lawsuit’s dismissal, a judicial panel noted that three of Urban Logic’s then-principals — Moorjani, Egger and Dillon — had held top posts at Beaumont City Hall until August 2009.

Moorjani has previously stated that the FBI, the city and the company had investigated allegations of misconduct and no wrongdoing had been found, according to the appellate ruling.


In May 2014, an Orange County Superior Court judge issued a ruling that Beaumont failed to contribute to regional transportation projects for nearly a decade and owes more than $42 million plus interest to a regional transit fund.

The state controller’s office audited the city after finding “significant differences between the city’s financial transaction reports to the controller’s office and its audited financial statements over two fiscal years.” Auditors found the city’s accounting controls had “widespread deficiencies that rendered them effectively nonexistent.”

Except for Coe, each of the remaining six defendants has been charged with six counts of embezzlement of public funds. Dillon, Egger and Moorjani have also been charged with one count each of conflict of interest and face up to 16 years in prison.

Kapanicas and Aylward are also charged with 24 counts of misappropriation of public funds and two counts of conspiracy. They face up to 26 years in prison. Coe has been charged with two counts of misappropriation of public funds and one count of conspiracy. He faces up to five years in prison.


Bail for Kapanicas, Aylward, Aklufi, Dillon, Moorjani and Egger was set at $5 million each. Coe’s bail is $100,000, officials said.


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7:45 p.m.: This story was updated with additional quotes and information from prosecutors