An employee of the L.A. Department of Water and Power has been arrested on charges that he embezzled $4.4 million from the utility over the course of almost 20 years.
Thatcus "T.C." Richard, 64, worked as an audio-visual technician until his retirement last year. According to the DWP, he oversaw 140 contracts for audio-visual services, dating back to 1993, which were awarded to companies owned by his close friends.
According to the complaint filed by the L.A. District Attorney's office, Richard's activities were not discovered until March 2012, when the DWP Special Investigations Office received an anonymous letter, which was forwarded by the L.A. Controller's Office. The DWP investigators followed up on the letter and interviewed Reginald Brewer, a DWP video engineer, who detailed allegations that Richard was awarding contracts to companies that he controlled.
The case was referred in January 2014 to the District Attorney's Office, which opened its own investigation. According to the complaint, Brewer told DA investigators that Richard had concocted an "elaborate scheme," whereby Richard created contracts requiring the use of outdated technology, and then awarded the contracts to the only companies still using that technology.
Those companies then subcontracted the work to Top Line Communications, a company Richard owned, according to the DA's office. The contracts were generally for amounts less than $50,000, which required a lower level of approval.
Reached at the DWP today, Brewer referred calls to the DWP's press office.
Richard, who lives in Moreno Valley, was arrested Wednesday at the Brookside Healthcare Center, a nursing facility in Redlands, according to jail records. He is being held at the West Valley Detention Center in Rancho Cucamonga on $1.2 million bail. He faces 27 counts, including embezzlement, misappropriation of public funds and contract fraud. If convicted, he could face up to 20 years in prison.
In a statement, the DWP said it appeared that Richard "acted alone."
"He operated in a very small business unit within the department, which made concealing the illicit activity easier," the statement read.
Since the case was uncovered, the DWP went back over five years of contracts initiated by small units, and audited some of them based on certain criteria. The utility also instituted more ethics training and expanded conflict-of-interest disclosures for contract administrators. In January, it took steps to verify ownership of companies doing business with the utility for the first time.
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According to the L.A. Times' database of DWP salaries, Richard earned $83,430 in base wages in 2012. Including overtime and other compensation, he made $101,920.
Mayor Eric Garcetti released a statement praising the work of DWP investigators.
"The suspected criminal activity was discovered through the vigilance of the Controller's office and the DWP's security services division and reported to law enforcement," he said. "The perpetrator should be fully prosecuted, and every effort will be made to recover the money that was stolen by this former employee.”
This post has been updated to clarify that DWP referred the case to the D.A.'s office in January 2014.