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SALT LAKE CITY — A lawsuit filed by the Utah Communications Authority claims one of its recently fired employees has admitted to stealing about $1 million from the company through the fraudulent use of an agency credit card over the course of more than 10 years.
The West Valley City-based organization, which is responsible for running the state's public safety radio infrastructure, announced Friday that one of its employees has been fired for fraud.
The agency also said its executive director, identified in legal documents as Steven Proctor, has resigned in the fallout from the employee's alleged fraud.
Patricia Nelson, a 17-year employee, was sued by the Utah Communications Authority for $800,000 on March 4 for her alleged fraud, court records show. Nelson, a longtime administrative assistant who had worked for Proctor for the past 25 years, was the person responsible for ensuring all employees' expenditures on company credit cards were legitimate, according to the lawsuit.
No criminal charges have filed against Nelson, who was fired around Feb. 22. Salt Lake County District Attorney Sim Gill said his office learned of the allegations about two to three weeks ago. The district attorney's office is now looking into the claims made against Nelson, Gill said.
West Valley police spokeswoman Roxeanne Vainuku said in a short statement that the department is investigating the case but declined to comment further "due to the active nature of the investigation." Vainuku didn't say when West Valley police were first made aware of the case or how long investigators have been looking into it.
Jason Boren, an attorney from the Salt Lake City-based law firm Ballard Spahr who was hired to perform a private investigation into Nelson, said his legal team has been coordinating with police during the investigation.
"I can’t say anything about Sim Gill. I don’t know when he learned of it, but I can tell you West Valley (police have) been in communication with us … all along," Boren said.
Court documents submitted as part of the lawsuit allege Nelson defrauded the company beginning around 2005, which differs from the Utah Communications Authority's statement Friday that it began as early as 2009.
In all, the lawsuit alleges about $1 million in unauthorized charges were put on up to five of the agency's credit cards.
Nelson's daughter, Crystal Evans, is also named in the lawsuit for allegedly participating in the fraud. The complaint against Evans and Nelson alleges they conspired together to "(manufacture) fraudulent supporting invoices/statements to support the altered credit card statements" by "omitting unauthorized personal charges, changing vendor names, changing dollar amounts of charges, and adding nonexistent charges."
The lawsuit claims the unauthorized charges include a Bahamas vacation costing more than $6,000, as well as purchases from Nordstrom, Michael, an ivivva clothing store at Fashion Place Mall, Toys "R" Us, PetSmart, ULTA Beauty and Alterra Pest Control.
According to additional court filings in the lawsuit, Nelson and Evans both agreed to and signed a declaration in support of judgement by confession — documents that the Utah Communications Authority said Friday are "statements of admission."
Nelson's declaration, signed April 4, states she initially claimed her son-in-law had stolen her company credit card after first being confronted about the alleged fraudulent charges. She later said she had wired some money to her daughter through PayPal and accidentally did so using a company card, the document claims.
The complaint against Nelson says another employee noticed unauthorized charges in an agency credit card statement on Jan. 7. That employee was handed the credit card statement after someone else noticed it sitting on a printer tray, according to court documents.
Nelson was placed on administrative leave on Jan. 11, the Utah Communications Authority said in the lawsuit.
In all, Nelson and Evans allegedly admitted in their signed declarations to defrauding the company out of $1 million in fraudulent credit charges and $578,000 in interest on those charges, and they conceded that $750,000 in punitive damages "is appropriate." In all, the total liability allegedly admitted to by the women is more than $2.3 million.
Boren said his legal team is suing for less than the $1 million they believe Nelson stole from the company because "the additional amount to reach the million dollars is for any charges that we were unable to (document)."
The Utah Communications Authority describes itself as an independent organization that "manages the radio and microwave infrastructure of all state-owned resources." Because of its role in servicing state-owned infastructure, the organization's purchases are not subject to sales tax, meaning Nelson also avoided paying taxes on any of her alleged fraudulent purchases, the lawsuit claims.
Boren said a civil lawsuit was filed before criminal charges so assets would have to be frozen to prevent any concealing or selling off of allegedly ill-gained wealth in advance of the criminal case.
