|
Getting your Trinity Audio player ready...
|
Tim Hanretty, the former superintendent of the Portola Valley School District now serving a two-year prison term for embezzlement from that district and other financial crimes, must pay the Woodside Elementary School District about $2.67 million in restitution, a judge has ruled.
Judge Mark Forcum issued his ruling on Sept. 10 during a restitution hearing in San Mateo County Superior Court. Mr. Hanretty last year pleaded guilty to filing fraudulent papers to take out a loan of $2.6 million for construction work on the Woodside School campus, although the school board had authorized a loan of only $632,000.
Mr. Hanretty had already been ordered to reimburse the Portola Valley School District for the nearly $101,000 he embezzled from it when he served as superintendent from 2010 to early 2012, plus associated costs of investigating the theft for a total of nearly $182,000. So far, he has repaid almost $121,000, according to Karen Lucian, the district’s administrative coordinator.
But Mr. Hanretty’s crimes involving the Woodside district weren’t so cut and dried.
He had served as financial officer for that district before becoming superintendent in Portola Valley, and oversaw the financing of construction projects. After the district launched an investigation in late 2011 into the unexpectedly high debt it was carrying, Mr. Hanretty was charged with three felony counts that included misappropriation of public funds.
The investigation determined that the additional funds obtained by the unauthorized loan were spent on other school projects.
He was later arrested and charged with additional crimes, including embezzlement related to his work in Portola Valley schools. After fighting the charges, he ultimately pleaded guilty to fraud, embezzlement and related charges.
Although he agreed to pay restitution to the Portola Valley district, he and his attorney, Michael Markowitz, argued that the Woodside district had benefited from all the loan proceeds, and fought the district’s attempt for restitution based on an unauthorized debt that it was saddled with. The district sought about $3.63 million in restitution.
According to District Attorney Steve Wagstaffe’s report on the ruling, the court calculated the restitution total on the following: $1.968 million, which is the difference in principal on the actual loan amount and the amount that was authorized; $856,553, which accounts for the difference in the interest rate on a loan for the authorized $632,000 and a loan for $2.6 million, after the school district’s attorney “renegotiated the interest to reduce it by $700,000”; $76,220 in attorney fees; and $35,788 in forensic audit fees.
That total – nearly $2.937 million — was reduced to reflect the $20,000 Mr. Hanretty has already paid toward restitution and the $250,000 from insurance payments.
Mr. Markowitz, Mr. Hanretty’s attorney, could not be reached for this story to comment as to whether he will appeal the ruling.
why are none of the other district officials who were there at the time being investigated? Do you really think he could have done this all alone? Were others covering this up? Or just too stupid to know what he was doing? So many questions…
Stupid? No. Not paying attention or applying appropriate financial controls, yes. Hanretty could not have done what he did without inadequate supervision and financial controls. That does not rise to the level of malfeasance on the part of the board. Misfeasance, yes, but that doesn’t rise to the level of criminal behavior.
Hanretty testified that his actions were known and approved by his supervisor in Woodside who unfortunately died a few years back.. Not sure how you prove or disprove this
Trish, do you have a reference that Hanretty implicated anybody other than himself?
I have not heard that nor does it seem very likely to me to be the case based on the albeit limited information that I know of the case. I do know that what Tim Hanretty did was pretty sophisticated and it involved altering the board notarized loan document to increase the loan amount and duration but did not so substantially change the loan payment amount. Covering his tracks required essentially maintaining a double book accounting scheme to be able to present one set of information to the board and another to the auditors.
Routine audits did not uncover the discrepancy and it only came to light because of the WES board diligently following through with the school’s new financial officer to completely understand the school’s level of indebtedness.
not Trish – I understood the former boss is now in Los Gatos…not dead.
WES neighbor – I don’t have any reference or info on him implicating anyone else…I was questioning how this could occur given the oversight of a boss and a board. As the case unfolded, I was surprised how long he was able to keep it under wraps. Shouldn’t the Superintendent be signing these documents too? The process that had only one signature required, no matter who it was, seems flawed at best.
@Trish – Sorry, my inquiry about a reference was directed to “not Trish”
(that “not” was “not” helpful ;-))
Fwiw, Dan Vinson was the WES Superintendent through construction completion of the new classroom and office space on campus which opened January 2008.
Dr. Vinson retired in June 2008 citing some health concerns. He passed away October 2009. The Superintendent that followed Dr Vinson was recruited away by Los Gatos last year. The current superintendent has had uniformly glowing feedback from everything I’ve heard.
As I understand it, the notarized loan document carried multiple signatures including the Superintendent, School Board President, and possibly Mr Hanretty’s as Financial Officer. But the modifications by Mr. Hanretty occurred after the signatures were affixed (but prior to submission) which turned a $.6M loan into a $2.6M loan.
As I understand it from friends in Saratoga, Los Gatos would gladly give Abbati back if you want her.
Did Woodside pay 2.6 million for improvements they underestimated by almost 80 percent or;
did the district make an extra two million dollars worth of improvements to a single school without anyone noticing?
If the school received an extra two million in unanticipated improvements, how could that be overlooked?
As I understand it (and my understanding is very much second hand), Mr Hanretty misrepresented his success with bringing the construction project in at close to budget. Owing to a significant number of late change orders, he presented the facts as though he was operating 5% over budget when he was actually 20% over budget.
The improvement list was as anticipated by the board, but the budget for the work did not jive with reality. I am unclear exactly how and why this came to be though it should probably be noted that a forensic audit was ultimately undertaken and the construction contractor was not in any way implicated in the scheme.
Please help me to understand if Hanretty benefitted from the 2.6 million or was it the school district that now has capital improvements reflecting that amount. If that is the case non withstanding the rightousness of the fraud conviction, he shouldn’t have to pay the 2.6 million for what is a benefit to the district. So, what was the disposition of the loan amount?
All the numbers are in the original article:
“According to District Attorney Steve Wagstaffe’s report on the ruling, the court calculated the restitution total on the following: $1.968 million, which is the difference in principal on the actual loan amount and the amount that was authorized; $856,553, which accounts for the difference in the interest rate on a loan for the authorized $632,000 and a loan for $2.6 million, after the school district’s attorney “renegotiated the interest to reduce it by $700,000″; $76,220 in attorney fees; and $35,788 in forensic audit fees.”
Hanretty pled guilty and must now pay the restitution.
As I understand it, Tim Hanretty falsified the loan documents after they original amount had already been signed off. This came to light when the Board found that Woodside was suddenly running quite a debt, after the project had been successfully finished, and they couldn’t figure out where it had come from.
How they managed to overlook the fact that a gorgeous remodel had been done on only $900,000 +/-, I have no idea.
Tim did steal AT LEAST $120,000 from the PV School District—-all of us who live here and have done any sort of home remodel realize that it had to have been at least 1/3 more than that, in order to have done what he did to his house (as well as sport a new car, etc).
The most recent article quotes him as saying that he stole from the PV District because he was “bitter and angry that The Board didn’t take better care of him.” That is narcissism and entitlement at its best–defending stealing from children in order to finance your own lifestyle betterment.
I feel terribly sorry for his partner, who is a very nice man, and who deserves better.
> How they managed to overlook the fact that a gorgeous remodel had been done on only $900,000 +/-, I have no idea.
The entirety of the project was budgeted to cost $13.3M. The board was presented with a $.6M overage for which the loan was approved, but the project turns out to ostensibly have been $2.6M over budget.
As I understand it, the discovery came to light in late 2011 when the board asked the district’s new financial officer to review the state of the district indebtedness and a board member inquired about the unexpected amount presented.
I have reviewed the district’s 2008 audit report, which is the first audit which would have shown the November 2007 loan, and the amount is clearly documented as $2.6M towards a $15.492M modernization project on page 38. Oopsy.
Sorry, page 37 for those that care about this kind of stuff.