The employees' supervisor reported directly to the district attorney — for much of the time to former DA Jim Fox and, since January 2011, to Steve Wagstaffe, the current DA.
The employees — Mandy Natchi Yagi, 54, of San Mateo, and Peter Wong, 43, of Daly City — worked in the Public Administrator division, part of the Coroner's Office in 1993 when it was taken over by the DA's office, Mr. Wagstaffe said.
The employees were responsible for overseeing the estates they are alleged to have stolen from. Public administrators administer estates of county residents who die without a will or an appropriate person willing and able to act as the estate administrator.
Both resigned their jobs in late 2011. Mr. Wong had been with the county since 2008, and Ms. Yagi since 2000, Mr. Wasgstaffe said.
Mr. Fox took the initiative to shift responsibility for the Public Administrator division from the DA to the public health department in mid-2010; Mr. Wagstaffe completed the transfer in July 2011. The change was meant to "consolidate the public administrator's office with the public guardian's office for efficiency purposes," Mr. Wagstaffe said.
The arrests stemmed from a county investigation that began after the public health department took over.
After questioning, Ms. Yagi and Mr. Wong left their jobs "with very little notice," Mr. Wong in mid-November 2011 and Ms. Yagi in early December 2011, said health department spokesperson Robyn Thaw.
"It was after they left and other staff began handling some of the public administrator estates that we discovered further problems and referred the matter to the Sheriff's Office in December 2011," Ms. Thaw added.
The county contacted the California attorney general's office, which referred the case to the U.S. Attorney's Office in San Francisco. The arrests were made by the FBI and federal prosecutors are prosecuting because "the alleged misdeeds occurred while the program was under the supervision of the District Attorney and therefore, they had a conflict in investigating their own employees," Ms. Thaw said.
A federal grand jury on June 22 indicted Ms. Yagi and Mr. Wong on charges of conspiracy to commit theft from a federally funded program and theft concerning a federally funded program, according to federal prosecutors.
Both defendants are out of custody on $100,000 bail.
Ms. Yagi and Mr. Wong had access to decedents' cash, stock certificates, bank accounts and valuable items such as jewelry, according to the federal prosecutors' statement.
During the county's investigation "... We discovered a box of items from many different estates in a place that only Wong and Yagi had access to. That they had items from many different estates in a box that was not under lock-and-key with the public administrator," Ms. Thaw said.
The department will be contacting heirs and beneficiaries to the estates, Ms. Thaw said, but would not speculate how many cases were mishandled nor on how long it might take to resolve the cases and what the monetary losses might be.
If convicted, the defendants could face maximum prison sentences of five years on the conspiracy charge and 10 years on the theft charge, prosecutors said.