Two former officials of the Mexican American Community Services Agency, the community organization which used to run the El Portal Leadership charter school in Gilroy, pleaded guilty to fraudulently using employees’ retirement savings for unauthorized expenses Friday.
The two officials – Olivia Soza Mendiola, 56 of San Jose, and Benjamin Tan, 62 of South San Francisco – also agreed to pay back $170,000 in compensation for retirement funds they illegally diverted from the agency’s workers, according to a press release from the Santa Clara County District Attorney’s Office.
The plea of guilty to the charge of grand theft and the reimbursement agreement were part of a plea bargain with prosecutors, with Superior Court Judge Philip Pennypacker presiding, the D.A.’s statement said.
Soza Mendiola was MACSA’s Chief Executive Officer, and Tan was Chief Financial Officer at the time they illegally used the retirement funds, authorities said.
From 2004 to 2009, the two officials used money that was supposed to fund employee retirement accounts to pay other MACSA expenses, including iPods, Jazzercise classes, walkie-talkies and meals at Chuck E. Cheese, authorities said. They did this knowing that their employees’ paycheck stubs falsely represented this money was going to their retirement accounts.
Soza Mendiola and Tan faced a maximum sentence of three years in jail, but avoided time in custody with the plea agreement announced Friday.
The two must pay the full $170,000 back to the employees within 90 days, according to authorities.
“I am very pleased that MACSA’s employees will soon be receiving all of the money deducted from their paychecks and illegally diverted, plus interest,” said Deputy D.A. John Chase, who heads the chief prosecutor’s public integrity unit. “Securing payment of large sums of restitution is often difficult, but it is accomplished with this settlement.”
At least some of those diverted retirement funds even contributed to $20,000 in extra take-home pay for Soza-Mendiola, according to a “statement of probable cause” in support of an arrest warrant issued by the DA’s office in April 2012.
MACSA is a San Jose-based organization. It’s El Portal Leadership Academy in Gilroy shut down in 2009, shortly after the allegations against Soza Mendiola and Tan came to light.
The ensuing investigation which culminated in Friday’s guilty plea was conducted by the D.A.’s Office and the U.S. Department of Labor.