Calif. Democratic treasurer perpetrated $7M fraud

By TOM VERDIN and DON THOMPSON
Associated Press
Published: Tuesday, Mar. 27, 2012 - 10:20

SACRAMENTO, Calif. -- Democratic campaign treasurer Kinde Durkee defrauded at least 50 candidates, officeholders and political organizations out of $7 million in a scheme that dates back more than a decade, according to a court filing made Tuesday by federal prosecutors.

The U.S. attorney's office in Sacramento filed the additional charges in federal court, providing the most detailed account to date in a case that has left some Democratic candidates scrambling for campaign cash in an election year.

Such filings typically are a prelude to a plea, but prosecutors would not confirm such a development or offer any further details.

Durkee, who heads Durkee & Associates in Burbank, was arrested in September and charged with suspicion of mail fraud after millions of dollars disappeared from the campaign accounts of U.S. Sen. Dianne Feinstein, other Democratic members of Congress and several Democratic state lawmakers.

The filing details a complex shell game in which Durkee shifted campaign money to cover an array of personal and business expenses.

In one example, $23,000 taken from Feinstein's account was used to help pay American Express credit card charges from the Los Angeles Dodgers, Amazon.com, Disneyland, Trader Joe's and Turners Outdoorsman.

Other misappropriations from Feinstein's account covered payments for a Long Beach condominium owned by Durkee and to the 401(k) plan for her employees.

The court filing said Durkee had devised a scheme from January 2000 until she was arrested last September "to defraud clients of Durkee & Associates, and to obtain money from them by means of materially false and fraudulent pretenses, representations and promises."

It said she had signature control over roughly 700 bank accounts, including those used by political campaigns.

Durkee's attorney, Daniel Nixon, did not return telephone and email messages Tuesday evening.

John Kevin Vincent, the assistant U.S. attorney listed as the chief prosecutor in the case, declined to discuss the material in the latest filing and would not say whether a plea deal was in the works.

"When we get to that point, we'll send out a notification," Vincent said.

Durkee was scheduled to appear in court Friday afternoon at a hearing that had been set before Tuesday's developments.

She has been accused of looting the accounts of dozens of Democratic officeholders, candidates and political organizations. Prosecutors also say Durkee filed false information with the Federal Election Commission and the California Secretary of State, which track campaign contributions and expenditures.

Read more here: http://www.sacbee.com/2012/03/27/4371582/prosecutors-filing-hints-at-plea.html#storylink=cpy

Read more here: http://www.sacbee.com/2012/03/27/4371582/prosecutors-filing-hints-at-plea.html#storylink=cpy

Today's quote is Uplifting to all who read

"The most important product from space is not Teflon or pharmaceuticals, but peace"
- Jesco von Puttkamer

Is Stockton Falling off Financial Cliff?

STOCKTON, Calif. (AP) — A red, white and blue sign declaring Stockton an "All-America City" still adorns City Hall, but the building's crumbling facade tells the real story of the community's recent fortunes.

Since the sign went up nearly a decade ago, Stockton has twice topped Forbes magazine's list of "America's most miserable cities." And now another unflattering title could be headed its way: largest American city to declare bankruptcy.

The city of 290,000 that rode the wave of the housing boom in the late 1990s and early 2000s now finds itself littered with foreclosed homes, saddled with pension, health care and other obligations it can't afford, and unable to pay its bills.

The City Council voted last month to suspend $2 million in bond payments and begin negotiations with bond holders, creditors and unions. A new California law requires that cities begin a 60-day mediation process before filing for Chapter 9 bankruptcy, though city leaders can file at any time if negotiations stall.

The police union, upset over job cuts and a record murder rate, posted billboards tracking the city's "body count" and giving out the city manager's phone number. One blood-spattered sign read: "Welcome to the 2nd most dangerous city in California: Stop laying off cops!"

The city's deficit now is $15 million — a little more than 9 percent of its annual general fund — and that could double in the next fiscal year.

"We are hanging on by our fingertips," said Mayor Ann Johnston, who has overseen three fiscal emergency declarations and hopes to persuade the city's creditors to forgive some debt.

Founded along the San Joaquin River during the Gold Rush, Stockton has much to boast. It's a gateway to Yosemite National Park and sits atop fertile soil that supports an agricultural industry that built the city and still is its underpinning — the three-day annual Stockton Asparagus Festival draws 100,000 people. It's one of just two deep-water inland ports in California.

During the housing boom, people priced out of the San Francisco Bay area were trundling down Interstate 5, buying up homes in subdivisions built for commuters.

"We became affordable housing for the Bay Area," Johnston said.

City leaders believed the influx of residents and wealth would finally lift the community into its rightful place as a top-tier city. From 2000 to 2005, median home prices quadrupled to $400,000.

The downtown waterfront is a monument to the high hopes of the era. An extensive promenade leads past a 12,000-seat sports arena, a gleaming hotel that opened as a Sheraton and an upscale restaurant, much of it bought with city money.

Today, there are more Canadian geese than people in this part of town. Residents say they avoid the arena because they don't feel safe at night. The Sacramento restaurateur the city lured with generous incentives has closed his doors-- though white tablecloths still adorn the sleek dining room-- and the Sheraton management has also left town.

A developer recently bought the hotel at auction and is refashioning the rooms into dorms for University of the Pacific students.

Though many communities across the country are struggling with their finances and some already have filed for bankruptcy — Pennsylvania's capital of Harrisburg, Jefferson County, Ala., and little Central Falls, R.I. — Stockton's litany of problems stand out.

The unemployment rate has doubled over the past decade and now hovers around 16 percent. A fifth of residents live below the poverty line.
The city has the second-highest foreclosure rate in the nation — it alternates with Las Vegas for the dubious distinction of first place. Home prices have fallen to pre-2000 levels, and as many as half of homeowners owe more than their houses are worth.
The looming bankruptcy was a subject of discussion at Weston Ranch subdivision, where three unemployed neighbors passed a rainy afternoon drinking beer in lawn chairs. All three are underwater on their homes.


Read more: http://www.ctpost.com/news/article/In-Stockton-Calif-slow-fall-off-financial-cliff-3396501.php#ixzz1p68OkECr