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Local News

County Property-Loss Report Includes $50,000 Loan to Defunct Lompoc Housing Agency

The forensic audit for the alleged misuse of monies by the now-defunct Lompoc Housing and Community Development Corporation is still many months away, but a report to the Santa Barbara County Board of Supervisors on Tuesday identified one piece of the puzzle.

The LHCDC used a $50,000 loan from the county in a potentially unallowable way, according to the county’s Loss of Public Property Report, the result of an internal audit for 2011 and half of 2012.

Internal audit manager Heather Harkless said the $50,000 came from a loan of HOME funds from the county in 2008. The possible misuse of those funds was also included in a warrant issued on the LHCDC by the District Attorney’s Office in order to get financial records for the ongoing forensic audit, she said.

When the Lompoc Housing and Community Development Corporation dissolved without notice last year, there were last-minute closures of homeless shelters and affordable housing properties fell into bank receivership.

The Santa Barbara County Grand Jury called out the county and Lompoc’s Redevelopment Agency for failing to property monitor millions of dollars in loans given to the LHCDC, which had a long history of noncompliance, warning letters, overcharging for affordable units, missing loan payments and failing to provide financial records.

After the agency dissolved without notice last year, the county started a forensic audit to look into the agency’s finances and track the $2.89 million it invested in LHCDC properties.

The Auditor-Controller’s Office received LHCDC documents with the help of the District Attorney’s Office search warrants at the end of January, so the audit could take up to a year to finish, according to Harkless.

“We have started going through the documents and information, and we may need to reconstruct the financial records to determine the path of the funds,” she said.

The Loss of Public Property Report also noted the credit card misuse at the Mosquito Vector Management District — resulting in criminal charges for former district chief Brian Passaro, who allegedly used his work credit card for thousands of dollars in personal expenses. He is facing criminal charges in Santa Barbara County Superior Court and has not yet entered a plea.

There were also some computers stolen from county facilities, missing receipts for money from the Santa Maria Welfare to Work Program, and bank fraud of the inmate commissary account at the Sheriff’s Department. The $258 taken in that case was recovered after law enforcement action was taken, according to the report.

Sheriff’s Department records clerk Mary Methmann has been accused of stealing $50 from the inmate commissary account during work and was placed on administrative leave Jan. 29. People can deposit money into inmates’ commissary accounts so they can purchase toiletries, snack foods, board games and other small items while in the County Jail.

Methmann is facing charges of petty theft related to that, and she is also charged with grand theft for allegedly burglarizing a Goleta home in early February and taking $10,000 worth of jewelry, according to authorities.

Her arraignment is set for Feb. 28, and the case will be handled by Senior Deputy District Attorney Brian Cota, who is also prosecuting Passaro and Karen Flores, the former business manager of the Santa Barbara Police Department accused of embezzling more than $500,000 over a five-year period.

“Someone came in to put money in somebody’s commissary account, and the allegation is that that money was stolen,” Cota said.

Noozhawk staff writer Giana Magnoli can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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