April 16, 2014

An Opportunity for OpenCdA Readers to Ask Questions

Filed under: Probable Cause — Bill @ 2:23 pm

DBSIEarlier today OpenCdA had a new registrant with the username “mkjcrich”.  Shortly thereafter, “mkjcrich” attached this comment to our post titled DBSI Update (Subtitle:  Manipulating Audits):

I was foreperson on this jury and after being discharged found this website. The webhost has done an amazing job offering information and insight into the case. It was a very complex case and the jury took its time dealing with each defendant on each issue. Judge Winmill informed us about Agent Morse’s suicide/death yesterday after we were released. Some of the jurors knew but most did not and a few took the information very hard. If there are any questions that I have the answers to….feel free to ask.

Comment by mkjcrich — April 16, 2014 @ 12:51 pm”

First to “mkjcrich”:  Thank you for your jury service. I hope that it was a satisfying and rewarding experience for you and your fellow jurors.  Thank you also for your nice compliment.

I think as a starter, it would be informative to OpenCdA readers to hear your overall comments and impressions about your jury service in a very serious and complex federal criminal trial.   How would you characterize your overall experience with the federal criminal justice system?  What expectations did you have going into the trial as far as your service was concerned?  How would you characterize the overall performance of your fellow jurors?  If since your release from jury duty you have read or heard news reports of the trial, how would you compare the accuracy and completeness of the news reporting with what you observed as a sitting juror?  Given that this appeared to us to be a complex financial crimes case, how would you characterize the ability of the government to present the admitted evidence in a logical, understandable fashion?  Overall, what most surprised you, what most pleased you, and what most disappointed you about your service as foreperson in a federal criminal jury trial?

Additionally, if as it appeared to us DBSI’s principals started up intending to operate lawfully as a legitimate business but devolved into criminal conduct, what lessons can communities and individuals learn from the admitted evidence to help us identify and avoid becoming victims of companies like DBSI?

Boss Hog to the Pen …

Filed under: Probable Cause — Tags: — Bill @ 10:59 am

rizzoAccording to Angela Spaccia, Robert Rizzo’s cohort in the Bell corruption scandal, Rizzo had a saying:

“Pigs get Fat … Hogs get slaughtered!!! So long as we’re not Hogs … all is well!!”

Today, California Superior Court Judge Kathleen Kennedy told Hog Rizzo that all was not well.  She sentenced him to serve 12 years in state prison for his part in the Bell corruption scandal.  He will be allowed to serve the state’s sentence concurrently with his 33-month federal sentence on tax-related charges.

The details of today’s sentencing are in LA Times reporter Jeff Gottlieb’s online story headlined Rizzo gets 12 years in prison, marking end to scandal that rocked Bell.

While Rizzo’s sentencing on federal and state charges and Angela Spaccia’s sentencing on state charges do appear to end the state action, there remains the possibility of federal charges against Angela Spaccia.  As OpenCdA has noted in several earlier posts, Angela (Sheffield) Spaccia served as Kootenai County, Idaho’s Finance Director prior to going to Bell.

April 15, 2014

Just Down the Street…

Filed under: Probable Cause — Tags: , — Bill @ 12:19 pm

CudahyJust down the street (that would be Atlantic Avenue) from scandal-ridden Bell, California, is the city of Cudahy (pronounced “cudda’-hee” or “cudda’-hay”).  In fact Bell is Cudahy’s next-door neighbor to the north.  It appears that Cudahy and Bell share more than just a border.

In an online story dated April 15, 2014, and headlined State accuses small city Cudahy of large spending irregularities,  Los Angeles Times reporters Jeff Gottlieb and Stevel Marble reveal that California State Controller John Chiang today released the state’s City of Cudahy – Review Report – Administrative and Internal Accounting Controls for the period July 1, 2010, through June 30, 2012.  (Note:  Times reporter Gottlieb updated this story and added details in a later one headlined Audit faults Cudahy as government in chaos.)

The essence of the state’s Review Report can be summed up in the first sentence of the Conclusions section:  “We found the City of Cudahy’s administrative and internal accounting control deficiencies to be serious and pervasive.  As a result, the potential for fraud, waste, and abuse is very high.” (more…)

DBSI Update: Guilty!

Filed under: Probable Cause — Bill @ 6:41 am


In its story headlined Jury:  DBSI officials guilty, but not of all charges, the Idaho Statesman is reporting that DBSI President Douglas Swenson was convicted by a federal district court jury of 78 counts of various frauds.

DBSI attorney Mark Ellison and two corporate officers were convicted on 44 counts of securities frauds.

This is a preliminary story; the Idaho Statesman will have more complete coverage in its Tuesday newspaper and online.

OpenCdA has several earlier posts derived from the Idaho Statesman’s reporting and other sources.

And still nothing timely from The Spokesman-Review or the Coeur d’Alene Press.

ADDENDUM on 04-15-2014 at 6:41 AM:  The hyperlink in the first sentence of this post was carried forward to the Idaho Statesman’s article on April 15, 2014.  Today’s Statesman story, headlined UPDATE:  DBSI official convicted of fraud,  provides additional details.  Of particular interest was this from today’s story:

Before its 2008 bankruptcy, DBSI managed 280 shopping centers, office buildings and other commercial buildings in Idaho and 33 other states. The holdings were worth $2.7 billion; many of them were owned by groups of investors to whom DBSI sold fractional shares.

With DBSI’s extensive involvement in 34 states including Idaho and with holdings worth about $2.7 billion, OpenCdA still wonders why this story received pathetically little coverage from Idaho’s other newspapers including the Hagadone News Network and The Spokesman-Review.

Read more here:

April 14, 2014

Kevin Siers, Charlotte Observer, Awarded Pulitzer Prize

Filed under: Probable Cause — Bill @ 3:44 pm

Kevin copy[

The 2014 Pulitzer Prize winners were announced today, and Kevin Siers of the Charlotte Observer won for his editorial cartooning.

Here is a link to Siers’ winning portfolio submitted for consideration.

April 11, 2014

Memorable Comments From the Judge and the Con Artist

Filed under: Probable Cause — Tags: — Bill @ 8:12 am


Yesterday’s OpenCdA post titled Prison for Former Kootenai County Finance Director linked to the preliminary story from the LA Times reporting that former Kootenai County finance director Angela (Sheffield) Spaccia had been sentenced to 11 years, 8 months in California state prison for her role in the Bell, California, corruption scandal.

Today’s Los Angeles Times story headlined Former Bell second-in-command gets 11 years in prison for corruption elaborates on yesterday’s story.  In today’s story there are some telling comments from both Spaccia (Sheffield) and Los Angeles County Superior Court Judge Kathleen Kennedy.  Some of Spaccia (Sheffield)’s comments have been reported before by the Times, but of course Judge Kennedy could not comment until after the trial was over and the sentence had been imposed.

OpenCdA hopes readers will read today’s LA Times article and pay close attention to the comments from both Judge Kathleen Kennedy and the convicted con artist, Angela (Sheffield) Spaccia.  They reveal the mindset of not only the con artist Spaccia and her fellow con artist City Administrator Robert Rizzo, but also the Judge’s now much clearer understanding of the complicity of Bell’s then-mayor and all but one member of Bell’s city council.

Midway through today’s article, Times reporters

We can’t help but wonder if Spaccia (Sheffield)  at that moment might have  been wishing  she had stayed in Coeur d’Alene and Kootenai County, Idaho. (more…)

April 10, 2014

Prison for Former Kootenai County Finance Director

Filed under: Probable Cause — Tags: — Bill @ 12:07 pm

SpacciaBookingPhotoFormer Kootenai County, Idaho, Finance Director Angela (Sheffield) Spaccia was sentenced today to 11 years, 8 months in prison according to the Los Angeles Times.

Spaccia, known as Angela Sheffield when she was Kootenai County’s Finance Director, was convicted on a variety of charges relating to public corruption in the Bell, California, corruption scandal.

Spaccia’s conviction was on state charges in Los Angeles County Superior Court.  Her conviction and sentencing does not preclude additional federal charges being brought against her.

Spaccia’s boss, former Bell administrator Robert Rizzo, is scheduled to be sentenced later this month.

Bell’s former mayor and five city council members have agreed to plead guilty to various charges involving misappropriation of public funds.   Each of them could receive up to four years in prison.

Coeur d’Alene Inches Closer to Selecting New Police Chief

Filed under: Probable Cause — Bill @ 8:22 am

CDAPDLOGO-2Have you seen the five-page vacancy announcement and solicitation inviting applications for Coeur d’Alene’s Chief of Police position?  If not, here’s a link to it.

Job vacancy announcements describe position information including the title, salary, duties, qualification requirements, closing date, and application procedures.  With that in mind, examine closely the City’s police chief vacancy announcement, and pay particular attention to the sections that describe the qualification requirements.  “Requirements” are just that — requirements.  In some cases, the requirements are imposed by state law.

Failing to include all qualification requirements in the vacancy announcement is unacceptable.  That amounts to withholding essential information from prospective applicants, and that reflects badly on the City administration. (more…)

April 9, 2014

The Cost of Deception

Filed under: Probable Cause — Bill @ 8:21 am

DBSIClosing arguments in the Idaho-based DBSI federal criminal trial will conclude today.  Federal district court Judge B. Lynn Winmill will provide instructions to the jury, and the jury should get the case for deliberation.

This morning’s Idaho Statesman article by John Sowell is headlined DBSI defense:  Can FBI agent be trusted? should be neither a surprise nor a shock to Statesman readers and those who have been following the DBSI trial stories in the Statesman.  In today’s story, Sowell reports that DBSI defendant Mark Ellison’s attorney Jeffrey Robinson said, “[FBI] Agent Morse was the face of this investigation.   Agent Morse was willing to look Judge Winmill in the eye and lie about her testimony.”  When a witness can be shown to have given sworn testimony that is inconsistent with or refuted by physical evidence or her previous sworn testimony, opposing counsel is usually permitted to challenge or impeach the witness’s credibility.

If FBI SA Rebekah Morse had been able to return to the witness stand, it is almost certain that Mr. Robinson would have been allowed to question her about the truthfulness of her statement to the Court that she had not sent text messages from the witness stand on her cellular telephone.  SA Morse was unable to be impeached in person because, according to the Ada County Coroner, she took her own life before she could be recalled.  Thereafter, “Chief District Judge B. Lynn Winmill informed the jury on Friday that Morse had not answered truthfully when she denied texting, but jurors have not been told about her death.”

Clearly and properly, Attorney Robinson hoped to persuade the trial jury that if FBI SA Rebekah Morse was willing to deceive the Court on a comparatively unrelated matter (her personal text messages with her husband), she might have been willing to lie to the Court on material matters relating to the allegations against the DBSI principals.   It is also appropriate that the Court has not told jurors about the coroner’s determination that SA Morse died by a self-inflicted gunshot wound before she could be recalled to the witness stand.

Until after the jury returns its verdict and has been discharged (and maybe not even then), it won’t be known what effect SA Morse’s deception, acknowledged and discussed in Court by Judge Winmill, may have had on the verdict.   Regardless of any influence SA Morse’s deception may have on the jury and on the outcome of the DBSI criminal trial, it has already irreversibly affected the lives of many people close to her.  Ultimately, her unnecessary and arguably irrelevant deception has already come at a very high cost.

ADDENDUM on 04-09-2014 at 3:30 PM:  On 04-08-2014 Judge Winmill filed another Memorandum Decision and Order.  This most recent one provides the Judge’s curative instruction to the jury in addressing the on-stand texting of FBI SA Morse.  It also explains how Judge Winmill considered the desires of both the government and the defendants in arriving at his curative instruction.

April 2, 2014

Doing It the Right Way

Filed under: Probable Cause — Bill @ 3:48 pm

StevenDMatheson copyIn our post on October 18, 2013, titled Steve Widmyer: Not Suitable for Mayor we were justifiably critical of Coeur d’Alene Mayor Steve Widmyer for authorizing print and online campaign literature which misrepresented that in 2013 he was  a CPA, a certified public accountant.  His license had, in fact, lapsed in 1995.  The Idaho State Board of Accountancy and Idaho statutes forbid such misrepresentation of the license.

So it is understandable that when the Coeur d’Alene Press ran a story about Kootenai County Treasurer candidate Steven D. Matheson on March 20, 2014, and the Press story included the statement, “He is also a certified public accountant,” we wondered if we had another poseur.

We don’t.

Mr. Matheson’s business website clearly and accurately stated then and now that he is an inactive CPA.  And just as important, Mr. Matheson’s campaign website states “CPA (inactive, WA).”

In our view, there is nothing wrong with a formerly licensed CPA using that information in business and campaign literature as long as the presentation conforms to the requirements in The Idaho Accountancy Act (Idaho Code Title 54, Chapter 2), specifically in I.C. 54.220.  The law does not forbid an inactive or lapsed CPA from using words that tend to indicate he was a CPA; it forbids him from using words that tend to indicate he is a licensed CPA.  Words such as “inactive” or “lapsed” clearly indicate former rather than currently valid licensure.

We’re pleased that Mr. Matheson did it the right way.

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