Law Enforcement: California City Officials Allegedly Skimmed $43M from City

"They victimized the entire city.”

Embezzlement charges were filed on Tuesday against the former Beaumont, CA city manager and six other city officials for allegedly skimming $43M in city funds. A year-long investigation resulted in the arrest of seven city officials: Former City Manager Alan Kapanicas, former Police Chief Frank Coe, former Public Works Director Deepak Moorjani, former City Attorney Joseph Aklufi, former Economic Development Director David William Dillon and former Finance Director William Aylward. A seventh person is expected to turn himself in on Wednesday.

All seven suspects have been charged with felonies. Aylward and Kapanicas face the most serious charges -- 33 felony counts each including embezzlement by a public official, misappropriation of public funds, and criminal conspiracy. Authorities say that the suspects used their political positions to funnel money to their private companies.

"The bottom line is, they victimized the entire city,” said FBI agent Colin Schmitt, who oversees a task force that raided Beaumont City Hall last year.

Current Beaumont Mayor Mike Lara responded to the arrests during a City Council meeting, saying the city had cooperated with the investigation and urged residents not to lose faith in the rank-and-file city employees. "They are just as disappointed, if not more so, regarding what has transpired," Lara said.

District Attorney Mike Hestrin estimated the corruption scheme had cost taxpayers about $43 million, including $36 million in "illegally maintained" fees and a $6 million loan given to a Beaumont business without any payback plan.

It is unlikely Beaumont will get all that money back, Hestrin said.

“I don’t know what the chances are. Probably not good," Hestrin said. "But we are going to work hard to get restitution."