Firm Charged With Bond Fund Diversion In Beaumont Oversaw Adelanto Issuances

A company founded and operated by several of the individuals recently charged in the Beaumont embezzlement, malfeasance and political corruption scandal were involved in the City of Adelanto’s issuance of $58 million in bonds in the late 1990s and early 2000s.
On May 17, seven former high-ranking Beaumont city officials were charged by the Riverside County District Attorney’s Office with misappropriating nearly $43 million from that city. A central element of that illicit scheme was the use of outside entities and consultants to both serve in official municipal staff capacities or as specialists whose function related to the issuance and expenditure of bond money.
Municipal bonds are securities issued by cities and other governmental entities. The proceeds from the sale of the bonds are used, or are intended to be used, for public improvement projects.
The bondholders are paid back at a set percentage over a 20-to-35-year period by the increase in property tax revenue that is supposed to be a consequence of the higher property valuations resulting from the improvements.
Arrested and charged in the matter were Beaumont’s former city manager Alan Kapanicas, former economic development director David Dillon, former public works director Deepak Moorjani, former planning director Ernest Egger, former finance director William Aylward, former city attorney Joseph Aklufi, and former police chief Frank Coe.
In 1993, Dillon and Egger, who had worked together with Temecula-based Trans-Pacific Consultants when that firm had a contract with Beaumont to facilitate the construction of a long-delayed sewer-treatment plant, left Trans-Pacific and formed their own consulting outfit, Urban Logic, with Deepak Moorjani, an engineer from Yorba Linda.
In roughly the same general time frame Kapanicas went to work as Beaumont’s contract city manager and formed a company called General Government Management Services through which he billed the city.
According to the Riverside County District Attorney’s Office, Beaumont brought in Dillon, Egger and Moorjani, working under the aegis of Urban Logic to serve as the city’s contract department heads overseeing economic development, planning and public works, respectively. Simultaneously Aylward was hired as finance director and Akulfi as city attorney.
In their capacities, Dillon and Egger set the stage for the conspirators to loot the city by devising a $655 million debt-financing plan for Beaumont to pay for public improvements over a 25-year span beginning around 1995, according to the Riverside County District Attorney’s Office. The district attorney alleges that the defendants collectively, minus Coe, then used “their roles in advising the city to issue new bonds while at the same time making payments to their own company.”
In addition to that, after Beaumont in 2003 adopted an ordinance
mandating that the city collect transportation mitigation fees on all new development, Kapanicas, Akulfi, Dillon, Egger, Moojani and Aylward rigged it so that the transportation mitigation fees did not go to a regional agency as was required but rather maintained control of the funds and used the money on projects in Beaumont, awarding the work to their own companies.
All told, according to the district attorney’s office, the defendants diverted to their own use or enrichment $42,967,421.90 over the complete span of the conspiracy.
Coe, who was the police chief, was caught up in the scheme because, according to the district attorney’s office, “From 2010 to 2013, Kapanicas, Aylward, and Francis
Coe, who was the Beaumont Police Chief at that time, came up
with a way to loan then-chief Coe $45,000 of city money, interest free. In total, the defendants loaned $113,773 of city money — interest free — to members of the Beaumont Police Department. The defendants never asked the Beaumont City Council for approval of these interest free loans.”
Information put out by the Riverside County District Attorney’s Office implies, but does not directly state, that the no-interest loans to key police department members were intended to buy the others freedom from investigation.
Well across the San Bernardino/Riverside County Line, out in the High Desert city of Adelanto, some of the alleged conspirators were involved in municipal operations there, including questionable uses of bond money.
In the mid-1990s, Adelanto was engaged in an effort to convince the Department of Defense to convey title of the then-recently shuttered George Air Force Base to it and/or its redevelopment agency. The City of Victorville had a competing proposal and there ensued a lengthy bureaucratic and legal battle between the two cities over civilian conversion rights to the aerodrome. Adelanto, in a move that was later determined by the courts and the State of California to be illegal, issued redevelopment bonds to fund that effort.
In 1995 and 1996, Urban Logic headed up a team of consultants that included lawyers who prepared documents that related to the issuance of $32.8 million in water bonds. Subsequently, some of the lawyers who were part of the team that readied and completed those bond issuances were paid for their other work for the city by the proceeds from those bonds. Also in 1996, Moorjani drew up a water management and conservation plan for Adelanto.
In 2000, Urban Logic again was retained by the City of Adelanto to assist it in completing documentation and applications for $25.2 million in utility bonds that were issued and sold, and then debt serviced with the sewer fees the city imposed on residents.
In 2007, Aylward, who was not a principal in Urban Logic but was one of the co-conspirators caught up in the Beaumont scandal as alleged by the Riverside County District Attorney and acted in league with Urban Logic, Akulfi, Kapanicas and Coe, in 2007 served as finance director in Adelanto.
The Sentinel is informed that Adelanto city officials have begun an inquiry into the work Urban Futures, Moojani and Atkward did for the city. A lawyer told the Sentinel that little is likely to materialize from that effort, since the statute of limitations on any criminal offenses has likely elapsed.

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