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PCSD Money Laundering: Who else is involved?

Posted at 8:22 PM, Jul 20, 2017
and last updated 2017-07-21 13:42:09-04

The money laundering saga surrounding the Pima County Sheriff's Department has taken another turn. The Arizona Attorney General's Office is now investigating the misuse of RICO funds in the department.

This comes several months after former chief deputy Chris Radtke faced several felony charges that were knocked down to three misdemeanors.

Radtke walked away with no prison time and his pension in tact -- an outcome that outraged many in the sheriff's department and the community.

Sheriff Mark Napier made the request for an outside probe -- just days after we exposed details in the case.

KGUIN9 pushed through denials for the documents through Freedom of Information requests and after several months received the records -- the same documents that were used in the FBI investigation.

Two weeks ago, we exposed extravagant annual awards ceremonies had been paid for with RICO funds and the two former sheriffs Clarence Dupnik and Chris Nanos played a part because they requested the RICO funds that were put in an illegal account -- totaling three quarters of a million dollars.

Whistleblowers say the records show a flagrant disregard for the law by those who uphold the law.

The requests for RICO funds came in a few forms. From a formal request for a $500 Chalkboard to not-so-formal email demand "Give me $300 from then Captain Chris Radtke.

Those specific requests in part led to Radtke's federal indictment on charges of misusing RICO money -- hundreds of thousands of dollars put in a disguised Sheriff's Auxiliary Volunteers account -- to avoid the same scrutiny had it appeared on the department's General Fund ledger.

One of the first whistleblowers, Sgt. Kevin Kubitskey, who is on the union board, says those requests are just the tip of the iceberg. Ratdke admitted in court the money laundering scheme had gone on for nearly 2 decades.

Investigative reporter Valerie Cavazos asked Kubitskey, “Do you know whether there are people inside the dept. who knew exactly what was going on and did not report it?” Kubitskey replied, “Yes. The board is aware of several who were deeply involved that did not report it.”

Sgt. Kubitskey couldn't name names, the plea deal didn't require Radtke to give up any names, but the U.S Special Attorney prosecuting the case confirmed “multiple officers, including those in higher leadership positions, were involved, but there wasn't enough evidence against them.”

So who was involved?

A 2013 Sheriff's Department memo written by Financial Administrator Ron Jee after an internal review reveals "sheriff's command staff has oversight and authority to expend the funds resources."

A 2013 organizational chart that year shows all the names and positions of the "command staff" -- 39 Lieutenants, Captains and Chiefs. The documents reveal 15 people who requested funds and 7 people who approved the requests. Each year as the command staff changed,

Let's take a look at one of Radtke's 3 misdemeanor counts of theft. Remember that "Give me 300 dollars" demand. Radtke had asked for the money in advance for a "recognition" lunch at a restaurant with "18 guests". Records reveal he later returned $50.

We found at least 150 similar requests by about three dozen deputies and staff -- with most of the RICO funds for those requests -- flowing through two subaccounts -- Food and Refreshment Fund and Petty Cash -- totaling at least $10,000 over several years.

Documents show the sheriff's command staff approved food and beverages for staff promotions, retirement, employee of the quarter ceremonies, special recognitions -- 

And Day Away's -- like this one for the Patrol Division in 2015 at a cost of $450. “There was always training going on at these functions.  The purpose of the Day Aways were to address training that you normally would not get,” said Kubitskey.

But the Day Aways didn't always involve training that helps the deputies fight crime.

We discovered Day Aways for Annual Memorial and Special Awards Ceremonies that cost nearly $1500 for food.

Staff also requested money for lunches during meetings the sheriff hosted. For example, in 2011, Clarence Dupnik's executive coordinator formally requested $250 in advance for a Border Sheriff's luncheon. Records show dozens of similar requests from staff dating back to 2010.

In that 2013 memo, Ron Jee warned former Sheriff Dupnik, Chief Brad Gagnepain, and Captain Karl Woolridge that "federal guidelines for food and beverages were fairly restrictive" in regards to RICO funds "and to consider limiting petty cash expenditures to training events and field operations."

Cavazos: So why not have that come out of the general funds? If RICO laws deemed that permissible -- why have all that come out of the SAV funds?
Kubitsky: That's a good question.

We looked up the federal RICO rule for food and beverage purchases -- it never mentions training.

In fact, the rule stipulates -- only "meals during local operations" are allowed. Despite the warning from Ron Jee -- records from 2014 to 2016 show command staff continued to allow food purchases for those non-training ceremonies and luncheons.

Radtke asked for "$80 in advance for a Sheriff lunch" in 2014 catered by a company owned by Radtke's niece. His niece also catered a VIP Day at a cost of about $432.

And the Day Aways for the annual Awards Banquets stayed on schedule in 2014 and 15 -- totaling about $2800 -- approved by Lieutenents Jim Berry and Nicole Feldt.

One of the first whistleblowers, Sgt. Kevin Kubitskey, says he and the union board are bewildered the money laundering scheme could be hidden in plain sight for so long.

“There were a lot of people who knew it was going on. Whether the intent was there are not, there is a duty to be cognizant of what you're doing, especially in a law enforcement agency where you swear to uphold the law. You have an obligation to stand up and say something,” said Kubitskey.

We searched for specific requests for RICO or SAV funds and found 16 from 2014 to 2016 alone.

Including one from Sgt. Amy Trueblood for a Juneteeth event in 2014 after former sheriff Chris Nanos approved $2500.

The Sgt. asks "Regarding the RICO funds, Do I get to spend that moola on give-aways for the event?"
Captain Karl Wooridge responds -- yes.

Jee gave Woolridge and former chief of staff Brad Gagnepain another warning -- he recommended that they "eliminate giving advances to personnel and only issue reimbursements."

And this is why -- "loans" -- "advance payment for expenditures" -- are not allowed, according to RICO rules.

But the "advances" continued for 3 more years. We found 36 requests and approvals  in 2015 alone -- totaling $3800.

Though Captain Harold Janes helped Jee in the review of the RICO expenditures, Janes continued to request and approve advances – such as a $500 request for Dupnik's retirement event -- in 2015.

Based on the documents alone -- it's still unclear exactly how many in the command staff knew they were misusing RICO funds.

I reached out to the three people who handled the record keeping for the RICO funds -- former lieutenants Nicole Fedlt, Lisa Sacco and Jim Berry -- who no longer work for the sheriff's department.

Feldt said she had nothing to say to us and that she told the FBI all she knew. We did not get a response from Sacco.

But Berry did respond. He told me that he had no idea he was part of a money laundering scheme. He assumed higher command had been following RICO quidelines. He moved to a different position before that 2013 memo.

We asked Sheriff Mark Napier if I could interview current employees -- Karl Woolridge and Harold Janes -- but he declined my request.

Top commander Brad Gagnepain killed himself before the FBI investigation wrapped up.

Both former sheriff's Chris Nanos and Clarence Dupnik have publicly stated they didn't know about the money laundering scheme.

Data journalist: James Parisi