Owner of 9Lives Club in Gilroy pleads no contest to embezzlement, grand theft

Former Morgan Hill Downtown Association Executive Director Jorge Briones, left, and his lawyer Arthur Cantu appeared at the South County Courthouse Friday morning for a plea hearing on charges that Briones embezzled the nonprofit organizationÕs revenues.

The former executive director of the Morgan Hill Downtown Association pleaded guilty Thursday to charges that he embezzled funds from the nonprofit organization while he was employed there.
Jorge Briones, 47 of Morgan Hill, pleaded no contest to one count of embezzlement and one count of grand theft at South County Courthouse, according to Santa Clara County Deputy District Attorney Judy Lee. Both of the charges are felonies.
Briones was arrested in December 2012 after a year-long investigation by Morgan Hill Police, who found that he had been writing checks to himself from the MHDA’s account and trying to cover it up while he worked at the organization in 2010 and 2011.
The no contest plea Thursday was part of a plea bargain, in which Briones is likely to serve 90 days in County Jail, three years of formal probation, and will be required to pay restitution, Lee said. He will also be subject to an employment restriction prohibiting him from holding any position – paid or volunteer – in which he handles the finances of others.
Briones is currently the owner of the 9Lives club in Gilroy, and the employment restriction will not affect his involvement with his own company, Lee clarified.
He will return to South County Courthouse Nov. 4 for his formal sentencing hearing.
Briones worked as the MHDA’s executive director from 2007 to 2011.

The Morgan Hill Police investigation – which began in late 2011 – found that Briones had been writing checks to himself funded by revenues from the MHDA, police said. He allegedly tried to cover up his actions by claiming the checks were written to vendors who supplied goods and services to the MHDA, and for other work-related expenses. 

Examples of those falsified expenses include a check to himself for $3,329 which he listed in the MHDA’s accounting system as reimbursement for candy for the downtown “Safe Trick or Treat” event one year, and a check for $2,921 which he entered as reimbursement for money he paid to Pacific Displays for supplies for the association, according to police reports.

Briones allegedly wrote about 50 checks to himself in this way, authorities said. All together, the checks added up to more than $29,000 embezzled from the nonprofit organization.

The MHDA is a nonprofit organization that promotes downtown Morgan Hill for economic development and tourism purposes. It hosts several events and series of events annually, including the Downtown Wine Stroll and the summertime Thursday Street Dance concert series on Third Street.

The MHDA is funded by annual membership dues, revenue from events it sponsors, fundraising efforts and – formerly – the Morgan Hill RDA before that agency was dissolved by state law earlier this year.
After the MHDA board of directors eliminated Briones’ executive director’s position in 2011 – when the organization was struggling financially, reportedly for reasons unrelated to the alleged embezzlement – he opened up the 9Lives music club in downtown Gilroy.