Information

Unger embezzlement case to go to trial

By: Bryan Grossman, Tri-Lakes Tribune/The Gleneagle-Black Forest Tribune

09/27/2005

Several residents within the Forest View Acres Water District filed into the Division 4 courtroom in Colorado Springs Sept. 22 expecting to bring the Patricia Unger case to an end.

The criminal case against Unger - based on accusations that she embezzled perhaps as much as $625,000 over 10 years from the special district while managing its funds - was set to end with a plea by Unger, coinciding with agreements reached during two sessions of mediations.

When she approached the stand, however, her attorney Timothy Bussey informed Judge David Shakes that his client wished to take the case to trial.

Despite the mediation agreement becoming void due to the request for a hearing, the suppression order placed on the parties involved may remain intact, according to Robin Cafasso with the economic crimes division of the district attorney's office. Specific details of the meetings can't be released until the gag order is lifted.

The case will now go to a preliminary hearing on Oct. 13 where it will be decided whether there is probable cause to take the case to trial.

Detective Rick Frady and FVAWD Secretary Barbara Reed-Polatty have been subpoenaed to testify for the prosecution.

"There will be witnesses to take the stand at the preliminary hearing," Cafasso said. "Usually the lead detective on the case will testify. You don't need every witness that will testify at trial to take the stand. You only need enough to prove probable cause. Ninety-nine-point-nine percent of the time, these go to trial."

Cafasso said she expects, if the case goes to trial, it will be within several months of the preliminary hearing.

During mediation, a quasi-contract was signed by the parties involved and their representation outlining the agreement between them. According to Cafasso, that contract is not binding at any time.

"Basically, it doesn't mean anything," Cafasso said. "Whatever the agreement was, it can be changed, even up until the point of sentencing, a judge can look at it and say, 'No, I don't like what I see,' and change (the circumstances of the agreement)."

Unger is being charged with a class III felony, the penalty for which ranges anywhere from four-12 years of incarceration without consideration of aggravated or mitigating circumstances. Special circumstances can cut the sentence to as little as two years and extend sentencing to as many as 24 years in jail.

"Felony III charges for this sort of thing begins at $15,000 (stolen)," Cafasso said. "Unfortunately, there is not greater charge for higher sums of money taken. You could, then, take $16,000 or $16 million and you would be charged with a class III felony."

Cafasso explained, though, that millions taken would probably fall within the realm of aggravated circumstances and net a harsher sentence.

During mediations, both the criminal case and the civil case against Unger were discussed.

Dennis Unger, the husband of the accused, was also named as a defendant in the civil case.

Forest View Acres resident Micheale Duncan said she was extremely disappointed the case did not come to a close last Thursday.

"Unfortunately, I expected the exact outcome of this mediation attempt even though I truly hoped to be wrong," Duncan said. "It's a monumental setback to our district and to the current board members who desperately hoped to retrieve some of the stolen funds for badly needed operating capital."

Representation for the Ungers could not be reached for comment prior to press time.

In other business:

The district hired Special District Management Services, Inc. of Littleton on Sept. 14 to take over management responsibilities.

Reed-Polatty said the district is currently transitioning those responsibilities.

©Colorado Community Newspapers 2005

Unger rejects mediation agreement

Our Community News, October 1, 2005

By Fred Malmstrom

In an unexpected development at the Colorado Springs District Court House, District Attorney Robyn Cafasso announced that defendant Patricia Unger refused her previously mediated plea agreement to charges of embezzlement of funds from the Forest View Acres Water District. Unger’s attorney Timothy Bussey cited his client had "questions about dispensation of funds."

Judge David L. Shakes declared the criminal and civil mediation effort at an end and set Unger’s preliminary hearing to answer to criminal felony charges for 9 a.m. on Friday, October 14. That hearing was subsequently rescheduled to October 13, 10 a.m.

Under the mediation agreement, Unger’s civil charges would have been combined with her criminal case.

Unger now faces the possibility of 4 to 10 years’ imprisonment plus full restitution of funds. Embezzlement of such a large amount of money—in this case, allegedly at least $315,000—is considered a major Class 3 felony.

Although Unger’s husband, Dennis, has not been charged with criminal activity, her present withdrawal from the mediation agreement will have no effect on the pending civil suit filed against both of them.

If Unger’s criminal case goes to trial, it will not be expected to take place until early next year.

Forest View Acres Water District, September 11 and September 14: District hires manager and fills board vacancy

By John Heiser

At a special meeting, Sept. 11, the Forest View Acres Water District (FVAWD) board of directors, consisting of John Anderson, Brian Cross, and Barbara Reed-Polatty, voted to hire Special District Management Services, Inc. (SDMS) of Lakewood, CO to provide district management.

At the special meeting Sept. 14, the board voted to appoint Eckehart Zimmermann to fill the vacancy created by the Aug. 1 resignation of Tom Guenther, former president of the district. About 15 district residents attended the Sept. 14 meeting.

The board vacancy created by the Aug. 24 resignation of Kevin Lonergan, former vice president of the district, remains to be filled by appointment. The board urged interested district residents to submit a letter of interest by Oct. 1.

Deborah McCoy, President of SDMS, served as facilitator at the Sept. 14 board meeting. She said SDMS manager Kammy Tinney, who was unable to attend the meeting, would be the manager for the district. McCoy urged residents who have operational or management questions or comments to contact SDMS at (800) 741-3254.

Background

The late Hugh Nevins established the FVAWD in 1957 to provide water to 27 homes. Currently, FVAWD provides water service to 280 residences in the Red Rocks Ranch, Clovenhoof, Villas, Sundance Estates, and Shiloh Pines neighborhoods in unincorporated El Paso County. A five-member board of directors governs the FVAWD. The district has a contract water operations manager, Dan LaFontaine, who is responsible for maintaining the equipment and infrastructure and for managing all aspects of water delivery.

In February, a warrant was issued for the arrest of former contract office manager Patricia Unger on charges of embezzling more than $212,000 in district funds. That amount was subsequently increased to $315,000. Unger surrendered to authorities Feb. 16 and was released on bail awaiting a preliminary hearing, which was initially scheduled for April 18 and then postponed to May 19. The May 19 hearing was continued to allow time for mediation and completion of the audit by Sheri Betzer, a forensic auditor, hired by the district’s attorneys. Mediation sessions were held July 8 and August 19. At a court appearance Sept. 22, Unger rejected the negotiated mediation agreement. Unger’s preliminary hearing on the criminal charges is now scheduled for Oct. 13, 10 a.m., Division 4 at the El Paso County Courthouse.

The district has filed a civil suit against Unger and her husband Dennis to recover the missing funds and associated costs. The rejected mediation agreement was intended to address the civil and criminal aspects of the case.

Election of officers

The board unanimously elected the following officers: Reed-Polatty, President; Cross, Treasurer; Tinney, Secretary; Anderson, Assistant Secretary.

Zimmermann appointed to fill vacancy

Reed-Polatty reported that letters of interest were received from Zimmermann and Ketch Nowacki. Each of the candidates described their background and answered questions. After an executive session called to discuss personnel issues, the board unanimously voted to appoint Zimmermann.

McCoy noted that Cross and Zimmermann must run for election in May 2006. The terms of Reed-Polatty and Anderson expire in May 2008.

Operations manager report

Some highlights of LaFontaine’s report:

LaFontaine reported that on Aug. 31 a coupling on one of the fiberglass filter pressure vessels split and blew apart. He said, "Some parts were embedded in the ceiling." The resulting leak damaged the Variable Frequency Drive (VFD) that controls the well pump. He said the VFD must be replaced at a cost of $3,000 to $5,000.

Billing report

Some highlights of Cross’s billing report for August:

Financial report

Cross’s financial report showed an operating account balance of $29,006, a debt service account balance of $5,003, and a contingency account balance of $1,501.

Invoices paid

The board unanimously approved checks totaling $28,789 for a variety of bills including $12,254 as a transfer to the debt service account, $4,316 for LaFontaine’s services, $3,272 for electricity, $2,560 for part-time contract bookkeeper Anne Bevis’s services, $2,500 to Henkle Drilling leaving an outstanding balance due them of $14,053, $1,500 to forensic auditor Betzer leaving an outstanding balance due her of $6,491, and $1,000 to law firm Petrock & Fendel leaving an outstanding balance due them of $41,522.

Schmidt inclusion

Inclusion of Schmidt’s 40-acre parcel was deferred.

Public comments

District resident and former board member Jeff Dull questioned the legality of using debt service funds to pay bills. McCoy said, "I would say no," but added that she would check the bond documents.

Genelle Deavenport asked about the status of the $45,000 loan obtained in 2004 and whether that should have been submitted to district voters for approval. McCoy said she would research the matter.

Meeting day, time, and location set

The board unanimously approved a change so the regular monthly meeting will be held on the first Wednesday of each month at 5:30 p.m. at Grace Best Elementary School.

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The next regular board meeting will be held Oct. 5 at Grace Best Elementary School, 66 Jefferson St. in Monument. Those wishing to attend are encouraged to check the date, time, and location by calling the district at 488-2110.

Special district names new president, board rebuilds

By: Nicole Osborn, Tri-Lakes Tribune

10/11/2005

Barbara Reed-Polatty co-conducted her first Forest View Acres Water District board meeting as president of the board on Oct. 5.

It was the first board meeting of the water district since the hiring of Special District Management Services, Inc. The Lakewood company brought to the meeting three SDMS personnel including president Deborah D. McCoy, who assisted Reed-Polatty.

McCoy, along with District Manager Kammy K. Tinney and C.P.A. and Finance Manager Susan Clyne, are working pro bono, for the time being, to help the water district get back to where it was before the allegations that Patricia Unger embezzled as much as $625,000 from the district.

Unger acted as an independently contracted employee of the district for more than a decade.

McCoy said her company would work for free for approximately six months, adding that SDMS has already spent $6,000-$7,000 or more assisting the water district.

"To have a district in trouble is bad for all of us," McCoy said.

Tinney took over as the water district's secretary. Title 32 of the Colorado Revised Status states that this position may be filled by someone from outside the district. The same title states, as long as the board has a president, it does not need a vice president, said Reed-Polatty.

"We have things that are severely broken within the district," she said. Reed-Polatty added that electing a vice president is not a priority for the board right now.

The board did appoint Ketch Nowacki to fill the vacancy created by former vice president Kevin Lonergan. Lonergan resigned from his post in August of this year.

"I just want to make sure the district gets on track with finances and operations," Nowacki said. His background is in finances.

At the Oct. 5 meeting, McCoy recommended that Paul C. Rufien, PC take over the water district's civil case against Unger, July 2006. The board accepted Rufien as their attorney.

"That's what I do," Rufien said, "I represent districts." He has been representing districts exclusively since he began practicing law 15 years ago.

Rufien is also working pro bono. He said he would be getting paid $225 per hour plus travel expenses one way (he works out of the Denver Tech Center) if he were billing the district.

"If there's ever a time when we're (the district is) really healthy, he will get paid," McCoy said.

SDMS is also looking for an engineer to work with the water district.

"We understand (the residents) need to know what's going on," McCoy said. She told residents, from this point on, financial records will all be "put on the table."
Water district financial statements for 2005 up to September were handed out and discussed at the meeting.

McCoy also addressed citizens' concerns regarding indebtedness and decisions that were made in executive sessions of the board, such as a decision to restrict public comment to five minutes and the September appointment of new board member Eckehart Zimmermann.

"(Board members) ran the water district like a club and not a public business," said former treasurer Jeff Dull.

Dull added he is optimistic that the management company will help the board. At the meeting, McCoy announced Clyne will handle water billing, create financial statements and revenue and expense reports.

SDMS will also create a 2004 actual financial report, an estimated 2005 budget and the 2006 budget, all to be discussed at the next meeting, Nov. 2. This will enable the district to see where they are going, McCoy said.

"The past is slowly getting behind us and the future is in front of us," Nowacki said.

Forest View Acres Water District is a special district that provides water to the unincorporated Forest View Acres housing development, located on the west side of Highway 105 south of Palmer Lake and north of Monument.

Red Rocks Ranch, Clovenhoof Villas, Sundance Estates and Shiloh Pines are all within the district.

The district services approximately 280 homes.

The FVAWD board is made up of six people including Tinney from SDMS.

©Colorado Community Newspapers 2005