The arrest in Placentia of the city’s finance manager Michael Nguyen has come as a major shock to city leadership and its citizens.
Nguyen was viewed as a rising star within the city government, having served as a senior accountant for two years before being promoted to finance manager. According to the Los Angeles Times, a 2014 city newsletter named him Employee of the Quarter, declaring that “Mike’s efforts and continued contributions have made him a tremendous asset to this agency.”
But two weeks ago, Nguyen was arrested and charged with 17 counts of misappropriation of public funds. Nguyen apparently embezzled $4.3 million from Placentia’s finances. He is accused of making 17 wire transfers from Placentia accounts to his own and other accounts, and could face up to 29 years in prison for his crimes. Nguyen has chosen to be represented by a public defender.
What Nguyen did with the funds is currently unclear, but his parents reportedly had financial difficulties. While the city has recovered $1.5 million, officials stated that talking about where the remaining $2.8 million is would negatively impact efforts to recover it.
Nguyen’s actions have shaken up a city which has already been struggling with financial problems for years. Placentia was projecting a $6.1 million deficit for the year before Nguyen’s actions were discovered. In 2000, Placentia launched an initiative called OnTrac which was supposed to reduce traffic and cut down on train noises. Cars had increased with the easy availability of financing in Southern California, particularly car title loans. But after spending $54 million, the city only built a single railroad crossing. Placentia was also hurt by the 2008 recession, which lowered tax revenues.
This scandal has provoked an uproar amongst Placentia’s residents, many who came to City Hall to voice their complaints. Former Placentia mayor Greg Sowards demanded the resignation of city manager Damien Arrula, stating “Let’s get somebody in here that knows what he’s doing.”
While none of the city council leadership has resigned, Placentia’s chief financial officer, Linda Magnuson, announced her resignation on Wednesday. While authorities stressed that they had no reason to believe Magnuson played any role in Nguyen’s crimes, she was Nguyen’s superior.