Scams and the City

You’d think government employees, especially high-ranking officials, would feel fortunate. Their salaries are relatively good and they have some job security. And yet, as 2020 ends, five San Francisco department heads are facing indictment by the US Attorney for allegedly having taken bribes. 

 

Some 20 years ago, when Terence Hallinan was District Attorney, a surprising number of the scammers he prosecuted were on the city or state payroll. Here are some examples from my three-year stint editing press releases drafted by Assistant DAs:

 

SF Health Commissioner Facing False-Check Charge in Sonoma County  San Francisco District Attorney investigators today  [10/12/2000] arranged for the surrender of SF Health Commissioner Ron Hill, a Castro District resident accused of passing false checks in Sonoma County. A Sonoma County Superior Court warrant for Hill’s arrest was issued in January, with bail set at $17,500. SFDA Chief Investigator Dan Addario facilitated the surrender of the defendant, who turned himself into Sonoma County officials this morning.

 

Ex-Controller of Golden Gate University Charged With Embezzlement   Edward Anthony McCann, 50, surrendered himself today [1/10/01] in response to a warrant issued by the San  Francisco Superior Court. The warrant, sought by District Attorney Terence Hallinan, charges McCann with embezzlement of approximately $3.5 million from Golden Gate University; money laundering; and under-reporting income to avoid taxes. The alleged thefts occurred between September 1996 and early 2000. During this time McCann was in charge of the accounting department at Golden Gate.

 

According to the declaration filed with the complaint, McCann had set up a fraudulent company, then authorized payment made to that company. The fraudulent company was owned solely by McCann, who spent the money on real estate and personal items.

 

Former Muni Driver Sentenced   A former San Francisco Muni bus driver was sentenced today [1/13/2001] on charges of worker’s compensation fraud and grand theft stemming from a private disability claim he filed for an injury sustained in 1993. Pyron L. Stewart, 56, of Tracy was convicted of fraudulently obtaining private disability benefits from Colonial as a result of an injury he allegedly received on Dec. 31, 1993. On that date, Stewart claimed to his employer, Muni, that he slipped and fell on the steps of his bus, sustaining a strain to his lower back. He filed a worker’s compensation claim and went onto disability. Between 1994 and 1999 the City and County paid more than $80,000 on Stewart’s claim.

 

One month after filing his claim, Stewart filed a claim for the same injury on his private disability insurance policy with Colonial, stating that his injury had occurred off the job. (He alleged that he had fallen down some stairs at a BART station.) Stewart’s policy with Colonial stipulated that if his injury occurred on the job, he would be paid $500 per month during the first year and $300 per month thereafter; however, if the injury occurred off the job, he would receive $2,000 per month for the first year and $700 per month thereafter. Stewart regularly submitted new claim forms to Colonial over a five-year period…

 

This is not the first time Stewart has been in trouble for insurance fraud. In 1980 he was convicted in Alameda County of filing fraudulent insurance claims. In 1994 he was convicted in San Francisco of insurance fraud, perjury, and grand theft in conjunction with a Worker’s Compensation claim filed while he was a Muni driver… Stewart is also currently on felony probation in Sacramento county for a 1997 conviction for unemployment insurance fraud.

 

Stewart is the second former Muni driver sentenced for Worker’s Compensation fraud in the last three months. 

 

Grand Jury Indicts Nine in Fraud Ring   San Francisco District Attorney Terrence Hallinan announced today [2/22/01] that his office, along with the California Department of Insurance, obtained an indictment February 6, charging nine people with conspiring to commit a variety of fraud-related offenses. The investigation is the largest of its kind ever conducted by SFDA. It targeted “cappers” (persons who illegally recruit accident victims for healthcare providers and lawyers), as well as medical professionals and law offices engaged in wholesale insurance fraud.

According to records on file with the court, at the hub of the large case is Suzannah Esquivel, 53, a longtime employee of the San Francisco Police Department’s records room, and Rolando “Rolle” Meneses, 52, allegedly the main capper in the case.

 

The ring, or “mill,” came to light when civilians involved in car accidents were allegedly capped by Meneses, who tried to refer them to certain doctors and lawyers. Troubled that Menese had access to the personal information contained in the accident reports, many of these citizens contacted law enforcement.

 

SFDA investigators inserted fictitious accident reports portraying undercover operatives as accident victims into the normal channels. Suzannah Esquivel allegedly then provided the reports to Meneses and within days the operatives listed in the reports were allegedly capped either by Meneses himself or by himself or by Leila Cordova, Emmanuel Salumbides or Jose Calderon. 

Some of the cappers allegedly referred the agents to Chiropractic Clinic, a business owned by Ulrich Moelgaard, and to the law offices of Michael Goldfeder and the law offices of Buchanan & Field. The various players were surreptitiously recorded by the operatives and many of these tapes allegedly reveal coaching by Meneses and law-office personnel to try to encourage the undercover investigators to complain of “pain” in order to inflate insurance claims. The law offices submitted claims to insurance companies that were 3 to 5 times higher than the medical bills.

 

“Organized rings like this don’t just damage business interests,” said District Attorney Hallinan. “They also hurt the consumer, who has to pay premiums that are inflated because of fraud.”

 

Institutional Police Officer Charged with Theft From SF General Hospital  …Keith Kelpsas was arraigned today on charges of felony theft and embezzlement. According to the declaration in support of the arrest warrant, Kelpsas was on duty on August 4, 2001, when he took possession of more than $9000 in cash to log for safekeeping and to deposit with the hospital cashier. The money was never logged in, nor was it delivered to the cashier.

 

After an initial investigation by SF Institutional Police Sergeants Craig Koss and Raphael Restauro, the matter was referred to the District Attorney’s special prosecutions division… Kelpsas has resigned from the Institutional Police Force and faces up to three years in prison. “This type of conduct by a sworn officer will not be tolerated,” said District Attorney Terence Hallinan.

 

Former SF welfare official fails to show up for trial  Samuel Lee Davis, 44, an eligibility worker charged with embezzling some $420,000 from San Francisco Department of Human Services , is now  [12/21/01]  a fugitive from justice, having failed to show up for his trial November 30. A no-bail bench warrant for Davis’s arrest has been issued by Superior Court Judge Kevin Ryan. 

 

Another judge had previously released Davis on his own recognizance over the strenuous objections of the District Attorneys office, which had requested that Davis be required to post a bail bond to secure his attendance at future court dates. San Francisco District Attorney Terence Hallinan asked anyone having information on Davis’s whereabouts to contact assistant D.A. Malcolm Vaughn of the special prosecutions unit at 415-551-9579.

 

Judge orders former SF Health Commissioner to pay $5 million to ex-lover   By John Glionna of the LA Times   …Superior Court Commissioner Loretta Norris ordered former official Ronald Hill to pay the award, which included $2.5 million in punitive damages.  On Friday [2/27/02] the San Francisco District Attorney’s office said it would consider filing criminal charges against Hill, who was appointed to the city’s Health Commission in 1997 by Mayor Willie Brown. Under state law, it is a felony to intentionally expose someone to HIV, prosecutors say.

 

Thomas Lister, Hill’s former lover, filed suit in January 2001 after discovering papers revealing his HIV status. Norris issued a summary judgment in the case after Hill did not respond to the suit or appear in court. Lister, 36, a manager at an area brokerage firm, said he met Hill in March 2000 shortly after moving to San Francisco from New York City. At the time he said, both men professed to be HIV negative. The two had unprotected sex, according to Lester’s lawsuit.

Months later, Listed discovered medical papers from Hill’s doctor that more evidence of his HIV status.

 

“When I showed him the papers he said ‘What is this?’ And I said ‘I think you know what this is. It has your name on it.’ But all he gave me were excuses, saying he was taking medication only as a preventative measure because a former lover had the disease.  Lister said he soon began to feel ill and a test in October 2000 confirmed he had contracted the disease…

 

Hill resigned from his post in October 2000 after he was arrested in Sonoma County for allegedly passing $3,000 in bad checks.

 

Terence instructed me to tell the media it might be difficult to get a conviction if prosecutors had to prove intent to give another person the virus. “It’s kind of a new area of the law,” he said. 

 

Former SFFD Lieutenant arraigned for submitting false claims, computer fraud  A former San Francisco Fire Department Lieutenant, Curtis Young, was arraigned today [5/2/02] on an arrest warrant charging him with submission of false claims accomplished by unauthorized computer access and manipulation. Young had worked in the Assignment Office at Headquarters Company. It is alleged that while working there and after his transfer from last duty, he manipulated the computer system to credit his work record with hundreds of hours of compensatory time to which he was not entitled. If convicted, young face is up to four years and eight months in prison and a $10,000 fine.

 

UCSF Head Cashier Indicted    Marie A. Taliaferro and her daughter Christina “Sunni” Taliafero were indicted in April 2002 on charges of embezzlement of public funds, grand theft, money laundering, receiving stolen property and tax fraud. Taliaferro allegedly embezzled $4.5 million (!) from UCSF and another $200,000 from UCSF-Stanford Health Care Services. (The two medical schools had merged for a few years, a preposterous scheme devised by Ernst & Young, consultants who made millions in the process.)

 

Marie Taliaferro had been the head cashier at UCSF. She was supposed to deposit the cash and checks brought in by the various departments, including co-payments made by patients. An audit eventually determined that between 1995 and mid-1999 Marie had skimmed some $4.7 million, most of which went to Solimar, Inc. an entity run by daughter Sunni. Solimar published two issues of a magazine called “Solimar: Living in the New Millennium,” and ran a store in Lafayette called “Wings of Solimar,” which sold angel-themed items. (At the time Della Reese had a hit TV show called “Touched by an Angel” and the Taliaferros figured they had a winning business model.) 

 

A  UCSF lawyer tried to excuse the administration’s failure to properly audit the cashier’s office, claiming that Marie T. had a “sophisticated scheme that involved taking cash and not depositing checks, yet indicating that she had, and later writing off some of those checks as bad debts.” If that’s sophisticated, I’m Gore Vidal. The reality is that the UCSF administration was preoccupied with imposing the merger with Stanford on a recalcitrant faculty. 

 

The big accounting firm to which UC outsourced an audit of the cashier’s operation, Deloitte & Touche, took more than a year to identify a “need to improve the bank reconciliation function of the Bank of America account.” UC then hired KPMG Peat Marwick “to help in the reconciliation effort and undertake a review of the cashiering function.”  It took another 15 months and interviews with many UCSF employees before they focused on Marie Taliaferro.

 

According to the District Attorney’s criminal complaint, when Marie was finally interviewed by UCSF auditors, her primary defense was that “The money had inadvertently been deposited into a UCSF/Stanford account.”  When she was indicted in 2002 I wrote a press release with a line that I knew Terence would cut: “She was no angel, but the satanic consultants from Ernst & Young who devised the absurd UCSF/Stanford merger in the name of ‘economies of scale’ may have made off with more of the public’s money legally.”

 

Terence scowled when he got to my tag, took up his pen and wrote, “The University of California Medical Center is a state institution. A theft from UCSF is therefore also a theft from the taxpaying public. I place a high priority on the investigation and prosecution of such corruption by public employees.”