On July 24th, 2013

Three Arrested In State Contract Fraud Scheme

ASA-DOJWhen  the California Department of Justice (DOJ) received an anonymous tip about a possible scheme to rip-off the state, special agents in the Bureau of Investigation went to work uncovering the scam and the scammers.  On July 23, After a year-long investigation, special agents arrested Stephanie Clark, 42, of Fair Oaks, Danny Gray Compson, 62, of Yuba City and Mike Mathison, 50 of San Pedro.

The three are accused of committing fraud against the State of California by taking bribes, misappropriating taxpayer money and forging documents.  Agents served six search warrants on Monday and Tuesday (July 22 & 23) including some at state office buildings.    

The complaint alleges that Michael Mathison, owner of Veteran Toners Services, supplied inflated quotes to the Department of Fish and Wildlife and the California Department of Transportation (CalTrans) for office supplies. Mathison then produced counterfeit quotes from non-existent competitors with even higher prices. As a result, Veteran Toners Services was awarded the office supplies business at the original inflated price and two department employees – in return for giving Veteran’s the contract – received kickbacks in the form of money orders, gift cards and vacations. 

“These workers conspired to defraud taxpayers for personal gain,” said Attorney General Harris. “We take government fraud very seriously. I thank our state partners for working closely with Department of Justice agents on this case.”

Clark, who works for the California Department of Fish and Wildlife, allegedly took more than 50 bribes for a total of $23,800 over the course of five years.   Agents discovered more than 50 postal money orders deposited to Clark’s bank account. The agents also uncovered more than 200 separate purchase orders for office supplies and a sampling of 13 of those showed approximately $50,000 in over-charges.

Compson, who works for the California Department of Transportation, also accepted bribes from Mathison. The complaint alleges he submitted invoices worth as much as $5,000 a week to be paid, but he never received the product.

"At a time when hard-working and honest state workers have endured years of hardship in reduced paychecks, it's shameful that two would scam the system for their own personal benefit," said Alan Barcelona, president of the California Statewide Law Enforcement Association (CSLEA).  CSLEA represents DOJ special agents along with nearly 7,000 other law enforcement, public safety and consumer protection professionals who work for the State of California.  

The investigation into this contract fraud case is ongoing.

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