Four years after a former Gilroy Unified School District trustee allegedly embezzled more than $52,000 from a leading South County social services agency, the Santa Clara County District Attorney’s Office has charged Francisco Dominguez with two counts of felony grand theft.
The 51-year-old Gilroy resident and sole proprietor of DZ Consulting is accused of defrauding a local charitable organization known as the South County Collaborative, as well as an international engineering firm out of “tens of thousands of dollars” in his role as a hired consultant with a firm contracted to perform outreach for the California High Speed Rail Authority, according to a DA press release.
If convicted, Dominguez – who officially resigned from the Board of Education Nov. 9, 2011 after allegations came to light – could face more than three years in jail.
The DA’s office launched an investigation in early June 2011 following reports by the Gilroy Dispatch, which in May 2011 broke the news that Dominguez had come under fire for “systematic” embezzlement.
Dominguez has been notified of the charges but is not in custody as of Thursday. There is currently a warrant out for his arrest and officials are waiting for Dominguez to work through his attorney to surrender, according to the DA’s office.
The Dispatch was unable to reach Dominguez for comment. The phone number the Dispatch has on file is no longer current and his number is not publicly listed.
According to DA Investigator Terrence Simpson’s statement of probable cause, Dominguez faked that he attended meetings in which he was supposed to be surveying public opinion on high-speed rail. The former GUSD school board member also allegedly and repeatedly double-billed the nonprofit South County Collaborative, which hired Dominguez in September 2008 to manage a five-year, $125,000-per-year, federal Drug Free Communities grant.
Fiscal discrepancies first came to light in September 2010, when longtime Gilroy accountant John Blaettler, a veteran board member of the local philanthropic nonprofit Gilroy Foundation, left the Gilroy Foundation board and became the volunteer treasurer for the South County Collaborative.
Blaettler said he uncovered evidence showing that Dominguez stole $52,269 while managing federal grant money for two years for the South County Collaborative.
While acknowledging a “billing dispute” with the South County Collaborative, Dominguez repeatedly denied the allegations during an in-person interview with the Dispatch last year.
“I was submitting invoices for work I had completed, and at the time I wasn’t aware it was over the contract amount,” he said, asserting “there was no hiding information.” The South County Collaborative initially refused to ask the Gilroy Police Department to investigate possible criminal charges, saying they had reached a civil agreement with Dominguez to pay back the funds.
“Legal counsel was retained and extensive discussions took place among board members to determine the course of action to be taken that would best serve the community,” wrote the Collaborative Board in a June 2011 letter to the editor. “The board has not shied away from accountability. Rather, we are working diligently and methodically to do the right thing in response to a very agonizing and complex situation.”
Blaettler was later named “Man of the Year” by the Chamber of Commerce. The organization recognized him during its 2011 “Spice of Life Awards” for personifying the “utmost in integrity, ethical standards and the true definition of unselfish service to his community.” The Dispatch tried, but did not reach Blaettler Thursday.
South County Collaborative Chairwoman Lynn Magruder said Thursday the organization has already filed – and won – a lawsuit against Dominguez. The case was settled this year in Santa Clara County Superior Court.
Magruder did not have the documents on hand when she spoke with the Dispatch Thursday, but said reparations are in the ballpark of $30,000 plus 10 percent interest.
The Collaborative hasn’t actually seen any of that money, however. Dominguez has only made two payments of $7,500 to the agency, and that was in July 2011.
“I was really happy to get the judgment. Now, I would like to see some payment on the judgment,” said Magruder. “These things are endless. They drag on for months and months.”
For a handful of Collaborative volunteers including Magruder, the debacle couldn’t end soon enough. Several of the nonprofit’s members put in 15 to 20 hours a week for “months and months” providing information to lawyers and the DA’s office.
When Magruder received word Thursday afternoon of the DA’s charges levied against Dominguez, “I was glad to see something is finally moving along on this,” she said.
During the period of the alleged theft – Oct. 21, 2008 and Dec. 31, 2010 – Dominguez was entrusted to handle the Collaborative’s bookkeeping, but signed the extra payment checks to himself, according to Deputy District Attorney John Chase, head of the District Attorney’s Public Integrity Unit.
“People put a lot of trust in Mr. Dominguez, an influential and public figure,” he said. “Mr. Dominguez betrayed that trust, and profited from it.”
According to a DA press release issued Thursday, the investigation shows that Dominguez “fraudulently over-billed the South County Collaborative.”
From Feb. 1, 2011 to November 30, 2011, Dominguez also “fraudulently over-billed” Parsons Corporation, an international engineering and construction management firm, according to the DA’s office. The investigation shows that Dominguez signed an $80,000 contract with Parsons in February to assist with community outreach efforts – but billed the firm for many nonexistent meetings with a wide variety of community organizations, school officials, business owners and neighborhood groups.
Nearly all of the people interviewed by DA Investigator Terrence Simpson “said they had not met with Dominguez about high speed rail,” the DA’s press release states. “Dominguez also documented to his employers that he had personally attended a wide variety of scheduled community meetings. In many cases, the meetings he documented did not occur on those dates.”
Dominguez came to Gilroy from Oxnard, where he served on the school board from 1996 to July 2006. He was elected to the school board in 2006 and served as its board president for one year beginning Dec. 10, 2009. In 2010, Dominguez ran for the 28th District State Assembly seat and lost in the primary to Luis Alejo. Dominguez was elected to his second term as trustee in 2011. His term would have remained on the board until 2014.
When asked if she thinks the potential punishment fits the alleged crime, Magruder said that “luckily, I’m not the judge in this case.”
“The Collaborative has had no money to do anything. That makes it really hard,” she added. “Luckily, we have a great deal of volunteer resources.”