Audit of misused sheriff's fund indicated no problems

A 2013 audit of a Sheriff’s Department special fund determined the money was being spent properly, but a federal investigation later revealed that funds had been illegally taken from the account by employees for nearly two decades.

On Feb. 10, the Pima County Sheriff’s Department’s former second-in-command, Christopher Radtke, pleaded guilty to three counts of misdemeanor theft of government property, in connection with the removal of funds from the Sheriff’s Auxiliary Volunteers of Pima County account, which was meant to be used for crime fighting or prevention purposes.

Sheriff’s Auxiliary Volunteers support residents of unincorporated Pima County by performing “numerous functions vital to the overall mission of the Sheriff’s Department,” according to funding requests submitted to the Pima County Attorney’s Office.

Radtke was initially charged with eight felonies in connection with an FBI investigation into the department’s use of federal funds seized under the Racketeering Influenced and Corrupt Organizations Act, otherwise known as RICO. The investigation revealed Radtke and others illegally took roughly $500,000 from the account between 2011 and 2016, although no one else has faced charges.

In Radtke’s statement to the court, he said the Sheriff’s Department staff had been circumventing the restrictions for use of RICO funds for 18 years. Employees collaborated to make it appear as if the department was donating money to the SAV fund, when in fact they were being used by the Sheriff’s Department, according to the U.S. Attorney’s Office.

Radtke is scheduled for sentencing in federal court Friday, May 5.

The financial activity covered under the audit and in the FBI investigation took place under former sheriffs Clarence Dupnik, who held office from 1987 to 2015, and Chris Nanos, who was interim sheriff from 2015 to 2016.

“This misconduct occurred before I took office and we’re very diligent in following the rules,” said Sheriff Mark Napier. “I welcome the fact that Pima County Attorney Barbara LaWall has updated the processes around RICO expenditures to ensure the strictest accountability.”

In response to Radtke’s claims, the Star made a public-records request for all deposits into and expenditures made from the auxiliary volunteers fund during the 18 years he specified. A department representative said because the fund was a nonprofit organization, the department didn’t have access to those records.

The Star submitted a second records request for documents related to RICO funds provided from the Sheriff’s Department into the auxiliary fund, and received the 2013 audit in response, which includes an overview of expenditures from Jan. 1, 2011 through Sept. 30, 2013.

The audit also included a memo from the department’s financial administrator, Ron Jee, saying the staff managing the SAV’s special funds were “conscientious and attentive.”

The special funds reviewed under the audit include building maintenance, community services, special awards, regional memorial and juvenile services. The SAVs also have a general operations fund that is commingled with the special funds in the same checking and savings account, the memo said.

The purpose of the audit was “to review and analyze” the expenditures of the fund “for reasonableness, accuracy and propriety,” Jee wrote in the memo.

“Sheriff’s command staff has oversight and authority to expend the funds’ resources,” the memo said.

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From Jan. 1, 2010, through Sept. 12, 2013, the department spent $230,000 from the SAV account, the majority of which was spent from the special awards fund, which is used for the Sheriff’s Department’s annual award ceremony and recognition events.

The audit concluded that overall, the expenses incurred were legitimate and in line with the guidelines for how to spend the money.

“Since RICO revenue was the primary source of funding, the department must continue to be diligent and evaluate whether its use is consistent with applicable guidelines and policies,” Jee wrote.

The audit detailed 24 significant expenses from the SAV account for the time period, but all transactions weren’t available because of the auxiliary volunteers nonprofit status.

In 2007, the Sheriffs Auxiliary Volunteers of Tucson registered as a nonprofit, more than 20 years after the corporation was formed, according to GuideStar, an information service specializing in reporting on nonprofits.

A search of the corporation’s 990 forms from 2008 to 2015, which provide financial information about nonprofit organizations’ revenue and total expenses, showed the SAV fund as ending the year with a negative balance four of those eight years. The deficit amounts ranged for $4,000 to $16,000, according to the documents.

In order to use RICO funds, the Sheriff’s Department has to request the money from the Pima County Attorney’s Office, specifying which area of the department the money will be used.

From June 2011 to July 2013, the Pima County Attorney’s Office approved a total of $304,500 in transfers to the Sheriff’s Department meant to be deposited into the SAV account.

The Sheriff’s Department requested $177,200 in RICO money from the Pima County Attorney’s Office for use by the SAV account in 2015.

The document shows that in 2015, $75,024 from the SAV account was spent on crime prevention activities — $100,000 less than the amount of RICO money transferred into the fund, which is only supposed to be used for crime prevention.

Even with the unused amount from the year before, in January 2016, the Sheriff’s Department transferred another $42,200 of RICO money into the volunteers fund. It’s unclear how much of that money was spent on crime fighting, as 2016 tax returns haven’t yet been made public.

The FBI investigation into the Sheriff Department’s use of federal funding started in response to a 2015 article by the Star about Radtke’s niece operating cafes at headquarters and the jail, rent-free and without a contract.

A records request revealed that more than $30,000 was spent on equipment and renovations for the two spaces. Department officials initially said they used RICO funds for those expenses, but later said they were paid for out of the general fund.

Radtke’s indictment includes several items that were purchased for the cafe, including a $2,000 custom-designed menu board.