The executive officers of a South San Francisco non-profit pleaded guilty Friday to stealing thousands of dollars from the agency's retirement funds and were ordered to pay the money back within three months or face jail time.
Olivia Soza Mendiola, 56, of San Jose, and Benjamin Tan, 62, of South San Francisco, the CEO and CFO of the Mexican American Community Services Agency, entered their pleas in front of Santa Clara County Superior Court Judge Phiip Pennypacker.
They admitted to illegally diverting more than $170,000 in funds intended for the retirment of the agency's employees, according to Deputy District Attorney John Chase, with the Public Integrity Unit.
If they pay the moeny back within the allotted time, they will be sentenced to community service, rather than jail time.
“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,” John Chase wrote in a news release.
“Securing payment of large sums of restitution is often difficult, but it is accomplished with this settlement.”
From 2004 to 2009, the two used money earmarked for employee retirement accounts to pay other MACSA expenses, including iPods, Jazzercise classes, walkie talkies and meals at Chuck E. Cheese’s.
Mendiola and Tan diverted money but employee paycheck stubs falsely indicated that the money was going into retirement accounts, Chase said.
This amount includes nearly $60,000 in pre-judgment interest, calculated at a rate of 10 percent per year. The negotiated disposition left open the question whether the defendants will be ordered to pay restitution for a much larger portion of diverted retirement money consisting of employer paid contributions.
This involves money that was not deducted from the employees’ paychecks.
During the period of time charged in the complaint, MACSA failed to make more than $620,000 in employer contributions to retirement accounts, as required by its collective bargaining agreement, Chase said.
The court will decide at a future hearing whether the defendants must pay back this money as additional restitution in this case.
The case was jointly investigated by the Santa Clara County D.A.’s Office and the U.S. Department of Labor.
“We are very pleased to see that retirement funds deducted from these employees’ hard-earned pay will be returned so they can be used as intended,” said Jean Ackerman, regional director of the U.S. Department of Labor’s Employee Benefits Security Administration in San Francisco.