Insurers on the hook for $5 million in public embezzlement case

The insurer for the city of Pasadena has paid the maximum amount of money under the policy after the alleged embezzlement of public funds by a former city employee

Insurance News

By Lyle Adriano

A claim involving the alleged embezzlement of public funds by a former public servant was settled, allowing the city of Pasadena to claim $5 million from its insurance carrier.

The former city employee, along with two other alleged conspirators, was charged in a criminal case in 2014.

“We are pleased that our insurance carrier has paid the maximum amount on the claim, but in no way does this minimize the importance of our internal efforts to strengthen our financial administration and internal controls,” said City Manager Michael J. Beck in a statement released Jan. 19.

Officials said that the payment represents the maximum amount of money that can be paid in relation to the claim filed by the city.

Last June, the city filed a lawsuit against former employee of 12 years Danny Wooten, as well as his wife and his two other purported accomplices, after a 2014 audit revealed that the municipality had been embezzled by more than $6 million over a decade, from 2004 to 2014.

Wooten, 52, was previously the management analyst for the city’s Public Works Department. Using about 296 forged invoices to the city, Wooten allegedly misappropriated city money and directed a portion of the funds to Tyrone Collins (56) of Collins Electric and temporary city employee Melody Jenkins (47). The two were also charged alongside Wooten.

Alongside funneling the money to his accomplices, Wooten is suspected of setting up bank accounts in his name and directing some of the money to two religious organizations that he has connections with.

“The city will continue to pursue legal means necessary to obtain a full recovery of the monies stolen,” remarked City Attorney/City Prosecutor Michele Beal Bagneris.

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