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Home My WebLink About16 - Orange County Real Estate Fraud Prosecution Trust Fund Award�EWPORr CITY OF NEWPORT BEACH �goaH'P City Council Staff Report Agenda Item No. 16 September 11, 2012 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Police Department Jay R. Johnson, Chief of Police 949 - 644 -3701, JJohnson @nbpd.org PREPARED BY: Dale Johnson, Captain 949 - 644- 3750,DJohnson @nbpd.org APPROVED: A TITLE: Orange County Real Estate Fraud Prosecution Trust Fund Award ABSTRACT: The Police Department seeks acceptance of a $25,000 award granted from the Orange County District Attorney's Office for the investigation of real estate fraud crimes. RECOMMENDATIONS: 1. Authorize the City Council to accept a $25,000 award granted to the Police Department by the Orange County Real Estate Fraud Prosecution Trust Fund per Council Policies F -3 and F -25. Therefore, to comply with Council Policy F -3, City Council must formally accept the award of $25,000 and create a new appropriation to expend the money. 2. Approve a Budget Amendment increasing revenue appropriations by $25,000 in 1820 -489E. 3. Per the award letter, carryover unspent funds for Fiscal Year 2011 -2012. FUNDING AVAILABILITY: The Budget Amendment records and appropriates $25,000 in additional revenue from the Orange County District Attorney's Office. The revenue will be posted to the 1820- 489E account in the Police Department. The Police Department's FY 2012 -13 budget already includes expenditure funding for the investigators who will be assigned to perform the grant - related activities. According to Orange County Assistant District Attorney Elizabeth Henderson (fund administrator), the funds awarded by the Orange County Real Estate Fraud Prosecution Trust Fund for FY 12/13 are now available. Orange County Real Estate Fraud Prosecution Trust Fund Award September 11, 2012 Page 2 DISCUSSION: Background: In April 2012, the Orange County District Attorney's Office disseminated information to all Orange County law enforcement agencies indicating they would be accepting applications to receive funding from the Orange County Real Estate Fraud Prosecution Trust Fund. Law enforcement agencies applying were directed to respond in writing to a series of questions related to real estate fraud investigations conducted by the applying agencies. Once received, the applications would be reviewed by the Orange County District Attorney's Office to determine eligibility based on Government Code Section 27388, which sets certain minimum criteria for law enforcement agencies to apply for and receive funding for investigation of real estate fraud involving recorded documents. On May 18, 2012, the Police Department submitted a letter of application to the Orange County District Attorney's Office requesting consideration to receive funding. The letter of application indicated that the Police Department has an Economic Crimes Section consisting of two investigators within the Detective Division that is dedicated to investigating various economic crimes, ranging from identity theft, credit card fraud, embezzlement, forgery, as well as real estate fraud. A copy of the application letter is attached to this report. In a letter from the Orange County District Attorney's Office dated June 25, 2012, the Police Department was notified that we had been awarded $25,000 from the Orange County Real Estate Fraud Prosecution Trust Fund. The letter indicates that the funding is to be used to partially fund the salary and benefits of an investigator for real estate fraud cases in our jurisdiction. Per the instructions outlined in the award letter, a response has been sent to the Orange County District Attorney's Office indicating our desire to receive these funds, pending City Council approval. A copy of the award letter is attached to this report. The responsibility of providing the required end of the fiscal year reporting back to the District Attorney's Office will be the responsibility of the Grant Administrator, Captain Dale Johnson. The end of year report will include a detailed list of all investigations conducted related to real estate fraud, the hours involved in each investigation, and the salary and benefit costs for the investigator(s) who conducted the investigations. This Staff Report requests approval by City Council to accept these funds pursuant to Council Policies F -3 and F -25. Last year, the Police Department received $75,000 from this Trust Fund for FY 11/12 and the City Council approved the acceptance of those funds. Orange County Real Estate Fraud Prosecution Trust Fund Award September 11, 2012 Page 3 ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Submitted by a R. fohnson Chief of Police Attachments: Application Letter to Orange County District Attorney's Office Orange County District Attorney's Office Letter of Award of Funding Budget Amendment Newport Beach Police Department Jay R. Johnson CAiefofPolice 870 Santa Barbara Drive -P.O. Box 7000 Newport Beach. CA 92658 -7000 May 16, 2012 Ms. Elizabeth Henderson, Assistant District Attorney Orange County District Attorney's Office Major /Insurance Fraud Unit 401 Civic Center Drive West Santa Ana, CA 92701 Dear Ms. Henderson: The Newport Beach Police Department (NBPD) once again requests funding consideration from the Real Estate Fraud Trust Fund, Currently, NBPD has an Economic Crimes Unit within the Detective Division that is dedicated to investigating various economic crimes, ranging from identity theft, credit card fraud, embezzlement, forgery, as well as real estate fraud. The Unit once consisted of four, full -time detectives. Currently, the Unit is operating with only two, full -time detectives to work the variety of crimes investigated, including real estate fraud. The City of Newport Beach is a financial hub of Orange County, is home to myriad firms associated with the real estate industry, and also has high value real estate. As a result, Newport Beach is often targeted by criminals committing crimes associated with real estate fraud. While the NBPD has a long history of investigating and seeking prosecution in real estate fraud cases, the Department's ability to effectively investigate real estate fraud has been affected by the reduction of the Economic Crimes Unit. This request for grant funds would fund a full -time detective position to handle cases specifically related to real estate fraud. Per Government Code 27388 and following your eligibility guidelines, please review the below information and application for consideration of eligibility and funding. Eligibility The Newport Beach Police Department does not have a unit devoted exclusively to investigating real estate fraud; however, we have regularly investigated and actively prosecuted cases of suspected real estate fraud in the past. The Economic Crimes Unit of the Detective Division, as mentioned above, has been responsible for investigating these crimes. The Department assigns one of the two detectives within the Economic Crimes Unit to investigate these crimes, based on current caseloads. Office or the Cbief (949) 6443701 - Support Services (949) 644 -3654 - Patrol- Traffic (949) 644 -3742 -Detectives (949) 644 -3790 Ms. Henderson May 5, 2011 Page 2 During the past three years, Detectives Bob Waft assigned to investigate crimes involving real es assignments were as follows; Bob Watts, Augus Steve Rasmussen, September 1, 2006 — Fe Detectives Kyle Cammack, February 15, 2010 — Fitzgerald, May 1, 2010 — present, are assigned to Required Statistical Information See Attachment A. Proposed Use of Funds s and Steve Rasmussen were tate fraud. The times of their t 1, 2006 — May 1, 2010; and bruary 15, 2010. Currently, present; and Detective Garrett investigate these crimes. Budget Detail for Personnel (one, full -time detective): Sala /Benefits $168,162.84 Equipment/Supplies 0 Training Expenses $800.00 Training Travel Expenses $1,200.00 Total Budget Estimate $170,162.84 Prior Use of Funds The NBPD received $75,000 from the Real Estate Fraud Trust Fund in FY 11/12. Those funds were used to offset the salary and benefits of Detectives Cammack and Fitzgerald during their assignment in the Economic Crimes Unit. From July 1, 2011, to date, NBPD personnel have spent 209.5 hours investigating crimes related to real estate fraud. Based on an average hourly rate of $75 (salary and benefits) for an NBPD investigator, to date we have expended approximately $15,712.50 of the $75,000 awarded. We will continue to track our real estate fraud investigations and report our final statistics to the Orange County District Attorney's office at the conclusion of the current grant period (June 30, 2012). See Attachment B. If you have any questions regarding this application, please contact Captain Dale Johnson at (949) 644 -3750, or Lieutenant Dennis Birch at (949) 644 -3778. Thank you for your consideration. Sincerely, y R. J nson CHIEF OF POLICE Attachments NBPD -- ATTACHMENT CASES SUBMITTED TO OCDA SINCE 0710112011 NBPD DR # OCOA CASE # SUSPECT NAME CRIME NBPD INVESTIGATOR DDA # OF VICT VICTIM LOSS STATUS OF CASE IF CONVICTED, LIST: CHARGE 8 SENTENCE 11-5121 Unknown Duncan 470 PC Fitzgerald Kralick 1 $200 00 ten8al DA Reject 5 11-6078 wamw=wtda warzrzd*wa 487 PC Cammack 2 $33,000.00 Filed 112 11-892 Canter Dobis 534 PC Fitzgerald Patko 1 $588,405 DA Reject 24 118121 Duncan 1/23/1967 470 PC Fitzgerald 1 $200,00(potential) Submitted 24 11892 I Dobis 11 111959 1 487 PC 1 Fitzgerald Patko 1 1 1 $586405 Submitted I 44.5 CASES INVESTIGATED BY NBPD SINCE 07/01/2011 NBPD DR # SUSP NAME SUSP DOB CRIME NBPD INVESTIGATOR DDA # OF VICT VICTIM LOSS STATUS OF CASE PERSONNELHOURS SPENT ON INVESTIGATION 11 -5273 Unknown 470 PC Fragerald 1 $16,600 (potential) Unfounded 5 11 -6078 wamw=wtda 10/5/1980 487 PC Cammack 2 $33.000 Filed 112 11 -3226 Canter 10/20/1978 487 PC Cammack 3 $27.0130 ongoing 24 118121 Duncan 1/23/1967 470 PC Fitzgerald 1 $200,00(potential) Submitted 24 11892 I Dobis 11 111959 1 487 PC 1 Fitzgerald Patko 1 1 1 $586405 Submitted I 44.5 DATE PREPARED: 06/12/10 TONY RACKAUCKAS ORANGE COUNTY DISTRICT ATTORNEY ORANGE COUNTY DISTRICT ATTORNEY'S OFFICE 401 CIVIC CENTER DRIVE WEST • SANTA ANA, CA 92701 (714) 834 -3636 June 25, 2012 JAY R. JOHNSON, Chief Newport Beach Police Department 870 Santa Barbara Drive Newport Beach CA 92658 -7000 Dear Chief Johnson: On behalf of the Orange County Real Estate Fraud Trust Committee created to administer the funds in the Real Estate Fraud Trust pursuant to Government Code 27388, we are pleased to award funding to the Newport Beach Police Department in the amount of $25,000.00 plus the carryover of the unspent funds for fiscal year 2011 -2012. This committee supports your continued investigation of real estate fraud crimes. The funding is to be used to partially fund the salary and benefits of an investigator for real estate fraud cases in your jurisdiction. Under the terms of Government Code 27388(d), law enforcement agencies who receive funding under the statute are required on a yearly basis to submit a detailed spending accounting of the funds received and to provide statistics on the number of investigations and arrests that resulted from the use of the funds. The Trust Fund Committee and the Orange County District Attorney's Office Real Estate Fraud Unit continue to look forward to working together with your department to investigate and prosecute real estate fraud crimes. To accept funding for this program, please submit a letter from your city council, mayor or city manager agreeing to use the program funding for the purpose above. Sincerely, / on ac-kauckas Orange County District Attorney TR/EHMb cc: Tom Daly, OC Clerk Recorder Asst. CEO Rob Richardson CEIVED JUL 12 2012 City of Newport Beach NO. BA- 13BA -008 BUDGET AMENDMENT 2012 -13 EFFECT ON BUDGETARY FUND BALANCE: Increase Revenue Estimates Increase Expenditure Appropriations AND Transfer Budget Appropriations SOURCE: from existing budget appropriations X from additional estimated revenues from unappropriated fund balance EXPLANATION: AMOUNT: $25,000.00 �X Increase in Budgetary Fund Balance Decrease in Budgetary Fund Balance No effect on Budgetary Fund Balance This budget amendment is requested to provide for the following: To increase revenue estimates in the Police Department Support Services division to accept award granted from the Orange County District Attorney's Office for the investigation of real estate fraud crimes. The Police Department's FY 13 budget already includes expenditure funding for the investigators who will be assigned to perform the grant - related activities. ACCOUNTING ENTRY: BUDGETARY FUND BALANCE Amount Fund Account Description Debit Credit 010 3605 General Fund - Fund Balance $25,000.00 REVENUE ESTIMATES (3601) Fund /Division Account Description 1820 489E PD Support Services - OC Real Estate Fraud Trus' $25,000.00 EXPENDITURE APPROPRIATIONS (3603) Description " Automatic System Entry. Signed: FmAre6al Approval: Fin nce�Dire�cto� Date Signed:1� w�i y 4�5 tZ Adminisfra' e Approval: City Manager Date Signed: City Council Approval: City Clerk Date