SAN DIEGO (CNS) - Two ex-officials of the Southeastern Economic Development Corp., who diverted hundreds of thousands of dollars in public funds into secret bonuses for themselves and others, were placed Friday on five years probation and ordered to pay $435,000 in restitution to the city of San Diego.
Carolyn Smith, the former president of the SEDC, and Dante Dayacap, the organization's director of finance, pleaded guilty in November to felony embezzlement.
Judge Edward Allard III suspended a yearlong jail sentence for Smith and an eight-month jail sentence for Dayacap, but ordered both to perform hundreds of hours of community service.
Supervising Deputy Attorney General Jim Dutton said the defendants gave themselves and others secret bonuses over a three-year period, between 2005 and 2008.
Dutton said Smith and Dayacap went out of their way to keep the scheme secret, with Smith telling SEDC employees that the organization had a policy prohibiting discussion of bonuses
Smith thought she could hand out money as long as she came in under budget, the prosecutor said.
"Her stance was, "I'm sorry, but I really didn't do anything wrong,"' Dutton told the judge.
Dutton unsuccessfully argued for jail time, saying Smith exhibited a pattern of fraud, non-disclosure and covering up because she didn't think she was being paid enough. He said her annual salary was $150,000.
Smith's attorney, Jerry Coughlan, said his client has lost her career, and is now unable to work in the public sector, doing what she loves.
"The suffering that she has brought on herself is real," Coughlan told the judge. "We all do things wrong in our lives."
Dayacap's attorney, Marc Carlos, said it took his client some time to understand that what he did was wrong.
Dayacap apologized to the city, the SEDC and the community of San Diego.
"I am deeply sorry," he told the court.
Allard said making the defendants repay the taxpayers was important, even at $100 a month.
"Every time they pay, they will be reminded what they did," the judge said.
The SEDC was created in 1981 with the goal of taking tax revenue from an area of southeast San Diego and re-investing funds back into the community to create affordable housing and other projects.
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