In April, Crowley Lake resident Debra Ray was arrested on suspicion of embezzling around $29,000 from the Crowley Lake Mutual Water Company.
On Wednesday, July 3, the Mono County Superior Court held a preliminary hearing for Debra Ray, who was the subject of what a Mono County District Attorney press release described as a “lengthy investigation” prior to her April 19 arrest. At her arraignment on April 22, Ray pled “not guilty” to 22 counts of theft of public monies from the Crowley Lake Mutual Water Company.
According to the D.A. press release, members of the Water Company Board reported a suspected embezzlement of public funds by Ray in late 2011. Ray had served as a Water Company Board member from approximately 1998 to the middle of 2011; she served for several years as Treasurer before she took over as both Treasurer and President from 2010-2011. She was voted off the Board later in 2011.
From about 2008-2011, according to Mono County District Attorney Tim Kendall, Ray drafted checks payable to herself and her husband, Ron Raczkowski, for work not performed, as well as reimbursements for expenses that the Water Company had already paid.
At Wednesday’s hearing, the prosecution led by Daniel Lengeman noted that Ray was allotted $500 per month while serving on the Board to cover home office expenses, including office supplies and utilities. Lengeman argued that many of the checks written by Ray from 2008-2011 exceeded that $500 allotment, and that in addition, three payments of $5,000 for construction purportedly performed by Ray’s husband “we believe are not backed up by any work done.”
Witness Steven H. Brackett, who served on the Water Company Board from 2006-2011, explained that Board members are not able to receive compensation for hours, but are eligible for reimbursement for out-of-pocket expenses. The $500 per month allotted to Ray was agreed upon through a 2009 resolution, Brackett said. He testified to the questionable nature of Ray’s contested checks, most of which were written during the construction of a new water well and tank. Ron Raczkowski’s construction company assisted with that project.
Ray wrote the checks to cover her $500 allotment, as well as for her husband’s work on the project, herself. Each check required two signatures, Brackett’s and Ray’s. This was per the Board’s decision, rather than any bank requirements. Because Brackett was living in L.A. at the time, he regularly signed blank checks to Ray in order to avoid the lengthy process of signing and mailing each check back and forth. Ray would then report the date of each amount and the expenditure at Board meetings. Many checks were never specifically reviewed, Brackett said. Moreover, he stated, “Rarely did I sit down and scrutinize the check account ledger sheets.”
However, in 2011, “I became concerned about the amount of money that Ms. Ray was receiving, contacted the CPA, and he gave me an electronic version of the check ledger,” Brackett said. “I sat down with that and determined that more money was being paid to her than the 2009 resolution [stipulated].”
Brackett confronted Ray about the discrepancy. “I called it an overpayment, and gave Debra Ray the option of taking no money but continuing to work, so that the books would line up,” he said. Ray declined, Brackett said, because she felt she was entitled to more money for the time she had spent working for the Water Company. “At one point, Debra said she felt she deserved $2,500 a month,” Brackett testified.
The check amounts discussed at the hearing range from about $100 to $5,000. Most of those checks, said Brackett, he had never seen before. Several were not co-signed by Brackett at all.
Brackett also noted that any addition to Ray’s $500 monthly allotment, such as a $100/month stipend Ray proposed she should receive, would have been too much for the cash-strapped Water Company, whose members already pay $174/month for water, Brackett said. “We had probably the highest water rates, and still do, of anybody in the area,” he said.
The preliminary hearing continued through Wednesday afternoon, and may even go into Friday.