SamTrans Faces 'Forensic Audit' as Part of Fraud Investigation

More insiders are speaking out as district attorney Steve Wagstaffe confirms his office has hired an independent forensic audit firm to assist with the investigation into fraud allegations at SamTrans.

View Comments (
)
|
Email
|
Print

    NEWSLETTERS

    For months, the Investigative Unit has been following the money at SamTrans, the transit district that runs Caltrain and SamTrans buses. As more insiders speak out, so does the tally of money – now topping $2.5M in questionable payments. District attorney Steve Wagstaffe confirms his office has hired an independent forensic audit firm to investigate fraud allegations raised by whistleblowers in our reports. Vicky Nguyen reports in a video that aired on May 7, 2014.

    Yet another former SamTrans employee has stepped forward raising concerns about how public money is being spent at the transit district that runs Caltrain and SamTrans buses. The disclosure comes just as San Mateo County district attorney Steve Wagstaffe confirmed his office has hired an “independent forensic audit firm to assist” with its investigation into claims of fraud in the finance department of the San Mateo County Transit District.

    “I’m working at a place that’s doing things that could be considered fraudulent and I don’t want to be part of that,” said Linda MacIntyre, a former contractor at SamTrans from 2011 to 2013. She audited payments to ensure public money was spent properly.

    MacIntyre joins a growing list of former SamTrans employees claiming finance leaders approved questionable spending and allowed accounting practices that violated government standards.

    “These expenses are being paid with taxpayer money,” MacIntyre said, “Don’t rock the boat. Keep under the radar. That’s the basic advice there from everybody.” MacIntyre added that her contract work dried up when she tried to tell her supervisors about the malfeasance.

    For months, the Investigative Unit has followed the money trail at SamTrans, uncovering a paper trail of financial mismanagement, starting with $373,904 in what the district called “errors.”

    Now, we’ve uncovered $38,000 in tuition payments for CEO Mike Scanlon’s master’s degree that appear to have violated government accounting standards. 

    His University of Denver tuition is an approved perk on top of his $419,492.06 annual salary. But records show six payments were re-classified from accounts containing money restricted for other costs.

    In the past, SamTrans indicated payments for consultants that were later re-classified and paid from insurance accounts were “classification errors that were “incorrectly coded.”

    Additionally, the day the district received our public records request for information associated with Mr. Scanlon’s degree, records show two more payments totaling $16,003 were changed to the appropriate accounts.

    The district declined our repeated requests for comment on these payments as well as the latest allegations, citing a pending lawsuit filed by former employee and whistleblower Ling La.

    But the tally continues to grow.

    The Investigative Unit has also confirmed records that show $72,000 in expenses for accounting firm VTD between 2010 and 2011 do not have any invoices to prove  they ever existed. In an email, VTD confirmed it has not done business with SamTrans since 2009.

    It’s one of dozens of questionable and inflated expenses exposed by whistleblowers over the past 8 months that now adds up to $2,529,533.09.

    So where is the money going? It’s the million-dollar question SamTrans refuses to answer.

    The district continues to deny fraud, and in the past, blamed whistleblowers for any overstated expenses.

    “I believe that there’s a strong possibility of fraud occurring here,” Nitsan Pashut said. He has nearly a decade of experience in government auditing and he’s the third auditor asked by NBC Bay Area to review SamTrans records and whistleblower allegations.

    “There should be more investigation,” he said. “Disgruntled [employees] or not, this was reviewed by management.”

    Pashut said that despite the district’s history of clean audits, the transactions we found present a troubling pattern.

    “These are public funds and its important they are not misused or miscategorized.  There should be more controls in place to assure the public that the public funds are being used in the right place,” Pashut said. 

    Have a tip for the Investigative Unit? Email Vicky@NBCBayArea.com. You can also follow her on Twitter or connect on Facebook Call 888-996-TIPS (8477) or email the Unit at TheUnit@nbcbayarea.com